EY - Digitalization: the next big thing for India’s SMEs

Digitalization: the next “big thing” for India’s SMEs

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Our recent analysis reveals that Small and Medium Enterprises (SMEs) are expected to play a leading role in adoption of Social, Mobile, Analytics, and Cloud (SMAC) in India.

India’s SME sector has been one of the primary drivers of its economy. The sector’s contribution to the country’s GDP is expected to increase to 22% in 2020 from 17% in 2011. Small & Medium Enterprises (SMEs) account for 45% of India’s total manufacturing output and employ around 40% of its workforce.

Causes for low adoption in the past:

  • Lack of understanding of business benefits technology can deliver across end-to-end value chains
  • Lack of guidance on the inherent abilities of technologies and how these can be integrated and institutionalized in their businesses
  • Resistance to incurring upfront investment-related costs to implement technology
  • Lack of skilled manpower to manage technology setups
According to NASSCOM, the estimated market growth driven by SMAC is expected to be 30% (US$1 trillion) by 2020.

Key drivers escalating adoption today:

In India, the impetus for adopting SMAC has been facilitated by the following factors:

  • The exponential growth in adoption of smart devices to enable easy access to 3G or 4G networks
  • The increased popularity of social media
  • Rapidly increasing volumes of data being captured by businesses across customer touch-points
  • Advancement made in analytic tools and technology that is helping to bring analytics closer to business users and not limit it to statisticians and PhD-holders
  • Cloud enabling businesses to deploy mobility and analytic solutions in a cost-effective manner and reducing time-to-market

Digital transformation: how SMEs can leverage this wave of technology?

SMEs will thrive if key enablers powered by SMAC technologies are created in integrated ecosystems to support their following needs:

  • Accessibility of expert knowledge and best practices
  • Financial independence and risk mitigation
  • Targeted marketing reach and sales
  • Operational excellence across locations
  • Efficient provisioning of services
  • Real time insights and decision-making

SMAC technologies: the new wave of growth

SMAC technologies are advanced, affordable and pervasive. They are now available to businesses of all sizes. This is opening up an opportunity for SMEs to level the playing field and compete with larger players. The need of the hour is for SMEs to take the lead in adopting SMAC and make it an integral part of their business strategies. Those that are successful in understanding the power of SMAC and harnessing it across their businesses will lead this new wave of growth.