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How AI, Automation and Cloud Computing are Revolutionizing MSME Strategies The flexibility of cloud computing also means that MSMEs can punch above their weight, accessing the same tools that are available to larger enterprises without breaking the bank.

By Aditya Pran Mahanta

Opinions expressed by Entrepreneur contributors are their own.

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The world of Micro, Small and Medium Enterprises (MSMEs) is undergoing a seismic shift, thanks to innovations like artificial intelligence (AI), automation and cloud computing. These game-changing technologies are no longer reserved for tech giants or multinational corporations; MSMEs are adopting them with gusto and the results are impressive. Whether it's reducing operational inefficiencies, cutting costs or driving growth, these innovations are becoming the secret weapons in MSME arsenals. From supply chains to customer relations, AI is giving MSMEs an edge that was once only within the grasp of big businesses.

Saahil Goel, MD & CEO of Shiprocket, stated, "AI is transforming MSMEs across various sectors, from local artisans to online retailers, by streamlining operations, enhancing productivity and driving innovation. AI-powered solutions help automate routine tasks, freeing up teams to focus on strategic initiatives that fuel business growth, significantly cutting costs associated with manual processes. Operational efficiency is further enhanced as AI analyzes data to identify bottlenecks and inefficiencies." The numbers back this up. A McKinsey study revealed that early adopters of AI in supply chain management saw a 15 per cent reduction in logistics costs, a 35 per cent drop in inventory levels, and a 65 per cent increase in service levels.

Not only does AI crunch data at superhuman speed, but it also uncovers insights that MSME owners could easily miss. AI-powered solutions can analyze vast amounts of customer data, identifying bottlenecks, inefficiencies and even opportunities for new revenue streams.

Mukul Goyal, founder and director of Stratefix Consulting noted, "AI tools are becoming increasingly accessible to MSMEs, allowing them to analyze customer data and market trends effectively. It is estimated that 70 per cent of MSMEs will adopt AI solutions by 2025, enhancing their competitive edge. Automation tools are also transforming operational efficiency. By automating repetitive tasks such as inventory management or customer follow-ups, MSMEs can focus on strategic initiatives that drive growth."

Automation Making Work Seamless

Repetitive tasks are the bane of any business owner's existence, but automation is here to turn that grind into a thing of the past. From managing inventory to following up with customers, automation ensures that MSMEs can focus on growth strategies rather than mundane tasks.

Swati Bhargava, co-founder of CashKaro and EarnKaro, explained, "Automation enables small businesses to optimize operations, reduce costs and scale efficiently." By automating routine tasks like bookkeeping, inventory management, or even customer support, MSMEs can free up their team's time for more strategic initiatives.

Notably, the cost of automation has plummeted, making it accessible to even the smallest of businesses. Whether it's marketing automation, warehouse management or even social media posting, automation tools are now within the reach of MSMEs looking to do more with less.

Pushkar Mukewar, CEO and co-founder of Drip Capital, emphasizes how automation simplifies trade finance for small businesses. He said, "Cloud-based solutions give businesses the flexibility to scale and access tools that were once only available to larger enterprises. The most accessible tools today are accounting software, payment solutions and digital finance platforms that allow MSMEs to manage their finances seamlessly and tap into global trade opportunities."

Cloud computing allows businesses to store and access data on remote servers, offering flexibility, collaboration, and security—all without the need to manage a sprawling IT department. MSMEs can use cloud-based tools for everything from payroll and accounting to project management and customer relationship management (CRM).

Rajat Deshpande, CEO & co-founder of FinBox, explains how cloud computing and embedded finance are driving financial inclusion for MSMEs. "Embedded finance platforms like FinBox combine sophisticated tech infrastructure and know-how of distributing financial services at scale, with the capital from financial institutions to increase credit access for MSMEs, reshaping MSME strategies," he stated.

The flexibility of cloud computing also means that MSMEs can punch above their weight, accessing the same tools that are available to larger enterprises without breaking the bank. And it's not just about flexibility; it's about collaboration too. Remote teams can work seamlessly across time zones, sharing files and working on projects in real-time, thanks to cloud-based solutions. A Deloitte study highlights the benefits of cloud adoption, noting that 60 per cent of MSMEs that adopted cloud solutions reported increased productivity and cost savings.

From Digital Payment Solutions to AI Chatbots

AI, automation and cloud computing aren't the only tools transforming MSMEs. Digital payment solutions, e-commerce platforms, CRM tools, and AI-powered chatbots are just a few of the innovations that are changing the way MSMEs operate.

"Digital payment solutions, e-commerce platforms and CRM tools are now within reach of even the smallest enterprises. MSMEs can leverage cloud-based solutions for seamless operations, AI-powered analytics for data-driven decision-making and automation to streamline repetitive tasks," noted Swati. These tools are crucial for MSMEs looking to thrive in a digital-first economy, especially in sectors like e-commerce, where customers expect seamless transactions and speedy service.

AI chatbot bots don't just respond to customer inquiries, they can engage, recommend products and even upsell, all while learning from customer interactions. Mukul Goyal highlights how chatbots have become game-changers by stating, "AI-driven chatbots can improve customer service by providing instant support and personalized recommendations."

For MSMEs, adopting AI, automation and cloud computing isn't just an option—it's a necessity. Saahil Goel pointed out, "This democratization of technology empowers MSMEs to innovate and grow in a digital-first economy." Whether one is running a quaint craft shop in a small town or an up-and-coming e-commerce store, innovations like AI, automation and cloud computing are leveling the playing field.

Creative head with a passion for crafting engaging and compelling content. My segment, Business Dynamics, cover mid sized companies and dives into their business perspective.
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