MSMEs need to reinvent themselves to tap new opportunities

The Covid-19 pandemic brought with it several challenges for MSMEs, including working capital blockages and supply-chain disruptions. MSMEs make a significant contribution to the Indian economy and drive employment in rural and urban areas; they employ approximately 110 million people and account for around 30 per cent of Gross Value Added and 49 per cent of the total exports in the country. The government has deployed several relief measures and still needs to do more. However, the prevailing micro and macroeconomic challenges also require MSMEs to be proactive rather than reactive and develop a robust strategy to reinvent themselves. This may entail embracing the innovative business and operating models, expanding the current customer base geographically and demographically, launching new products and services, and building strategic tie-ups with public and private sector players. An excellent example of this is the Karnataka-based fitness company, JJ (Jayanagar Jaguars). Initially, the company had limited focus despite having branches in 27 physical locations; the company also had no provision to facilitate remote training for their clients. Post-Covid, JJ plans to open another 23 units and has launched a ‘fit-from-home’ program for clients to train remotely. The company used social media, online introductory sessions, and contests across WhatsApp groups to engage with their clients delivering positive results in client satisfaction and company revenue.

Businesses can enhance engagement with stakeholders, supply chain management, marketing, employee development, product development and innovation by leveraging technology effectively. Digitization has already transformed the competitive landscape; the pandemic has further accelerated the digital transformation trend across industries and sectors. MSME operations are generally inefficient because of their reliance on legacy systems and manual processes. Integrating technological solutions across supply chain management, logistics, manufacturing, customer relationship management, and sales and marketing will help streamline workflows and drive business efficiency. Integrating with the digital economy can help MSMEs diversify their customer base by tapping into new markets and setting the stage for exponential growth. MSMEs can leverage digital marketing tools such as SEM (search engine marketing), SEO (search engine optimization), Google Analytics, pay-per-click, and content marketing to convert greater visibility into a larger pool of potential customers. Human resource management systems could help MSMEs streamline processes associated with staffing, recruiting, training, compensation, retention strategies, and performance appraisals. Similarly, customized accounting software packages could help MSMEs manage invoicing, payments and bookkeeping. It is essential to consider that most MSMEs lack substantial financial resources; therefore developing and deploying a digital transformation strategy may seem like a challenging endeavor, especially when it comes to establishing traditional IT infrastructure systems. Cloud computing solutions remove the need for prohibitive capital investment related to hardware and ongoing maintenance, and allow better scalability and data backup, ensuring operational resilience. 

The availability of low-cost data analytic tools, internet services, cloud technologies, and remote networking technologies means MSMEs can easily balance operational efficiency and investment in transformative technologies. Thus, by reinventing themselves, MSMEs ensure ease of doing business and business continuity for the foreseeable future.