Technology for MSMEs: Accounting for 70 per cent of all employment, 99 per cent of companies, and nearly 50 per cent of global GDP, MSMEs are a key economic artery for almost every nation on the planet. However, the small size and limited resources of most MSMEs have traditionally made it difficult for them to access enterprise technology and implement digital transformation at scale. In fact, less than 20 per cent of MSME digital transformation initiatives are successful. But all that is quickly changing.
In the past, digital transformation for MSMEs has largely been viewed as a customer acquisition tool that helped them scale faster and access new markets. But now the rapid acceleration towards digital during the pandemic has helped even the smallest retailers transform their businesses. They can access analytics dashboards for critical insights into customer behaviour, inventory management, supply chain metrics, and more, via new offerings in AI and predictive algorithms by digital service aggregators. The real-time insights they offer have allowed MSMEs to deliver increased personalization and tailor their portfolios to the needs of the quickly evolving consumer.
Lest they be left out, IT vendors are also showing renewed interest in the MSME market, launching low-cost service and product tiers tailored to the needs of emerging businesses. But I believe that the mass-market adoption of SaaS services will be the tipping point.
Pay-as-you-go is the game-changer
Having cut its teeth on enterprise customers over the last two decades, the SaaS model is now being rapidly rolled out and optimized for MSMEs. Shared environments and API-based microservices architecture have reduced the overall IT spend, and MSMEs now have on-demand access to business software without the expensive licensing costs. Launching a new customer acquisition channel, integrating a digital payment gateway, implementing a fraud detection system, or adopting a CRM has become a matter of a few clicks and a relatively minimal monthly investment.