‘Shift towards SaaS has moved SMEs’ maturity needle to break status quo, experiment, and even risk failure’

Technology for MSMEs: SaaS enables small businesses to get immediate access to apps rather than investing large capital upfront in building sophisticated custom solutions or buying enterprise software licenses on a per-seat basis.

digital for msmes
The digital culture that SaaS brought about for SMEs built their capacity to accumulate data, manage it, innovate, and implement research-based digital solutions. (Image: pixabay)

By Sameer Jain  

Technology for MSMEs: The technology-spend gap between the Indian SMEs and the larger enterprises has been visible for long. SMEs have struggled to find their J-curve. And their ability to find the right tech solutions to automate their processes hinged on prioritizing the most expensive problem to solve at the expense of others.

Enter Cloud. Enter Covid.

Both cloud and Covid have changed the world forever. Both arrived independent of each other, but Covid accelerated the shift to cloud and ushered in a decade’s worth of digitalization in one fell swoop. However, digital transformation needs to go beyond the adoption of cloud-based applications. It has to be about analyzing and using relevant data to positively influence business operations and processes. it also must embrace tools that make SMEs more metric-driven and competitive. Most businesses do not always have the time or the advice needed to plan this transition well – to select the suitable digital systems, upgrade digital skills, develop the proper protection and security, and fully customize and understand the potential of these new tools. The digital transition for SMEs is, therefore, an ongoing process.  

This is where the mass availability of the business to business (B2B) software-as-a-service (SaaS) solutions made an empowering change for SMEs. As per a recent report from SaaSBOOMI, the Indian SaaS ecosystem may get to $1 trillion in value and close to half a million jobs by 2030. The ecosystem today has come of age with nearly a thousand funded start-ups and 10 unicorns. These companies are collectively generating $2-3 billion in annual revenues and creating a robust knowledge economy for enterprises to access the value potential of software as a service. 

SaaS enables small businesses to get immediate access to apps rather than investing large capital upfront in building sophisticated custom solutions or buying enterprise software licenses on a per-seat basis. SMEs can leverage the promising future enabled by SaaS to develop a wide range of solutions from building operational efficiencies to leveraging data-based insights and analytics to enhance customer engagement and success.  

This shift towards SaaS has moved the maturity needle of such SMEs to digitally savvy – especially in the way they operate & deliver value to their customers. The metamorphosis that SMEs experience because of a digital transformation goes beyond just digitizing existing processes –  it brings in a holistic cultural transition wherein the SMEs break the status quo, are pushed to experiment, and even risk failure.  

The tangential benefits of SaaS adoption include cost reduction, standardization, and automation in the business processes. Since SaaS services run on shared environments, infrastructural and software license costs are lower than traditional models. You could have a cloud call center for your business up and running without spending a fortune. Or you may get access to a software app that you would not be able to afford because of the high cost of its license or the resources required to build one.  

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Maintenance costs are optimized as well because the provider owns the environment, while the cost of maintaining it is split among the clients that use the solution. The service is subscription-based, translating into lower upfront costs. Besides the low initial costs, the faster deployment of installation, configuration and maintenance of the applications without any infrastructure or labor gives these SMEs an edge in a hugely competitive market.  

Another interesting point is that AI systems have become more democratized with SaaS. It has become easier for SMEs to experiment and implement AI solutions across the board with simplified developer platforms. This has been good, especially for gaining insight into consumer behaviors and experiences.  

The digital culture that SaaS brought about for SMEs built their capacity to accumulate data, manage it, innovate, and implement research-based digital solutions, giving them the leverage to move towards a more agile workflow. Connectivity tools enable members to have instant access to multiple platforms to perform their tasks. Remote working made it easier to use on-demand human talent, and the flexibility makes workspaces that much more efficient and smooth.  

The very nature of the SaaS ecosystem takes away the headache of updates from the businesses, which can then focus only on growth. Moreover, with SaaS’s subscription-based models, plans for expansion in both team networks and customer base are more effortless. In short, chances of scaling up get a push.  

SaaS solutions span multiple business verticals; examples – in HR (Zoho, Freshteams for Engagement/Applicant Tracking, Compensation, etc); in Sales & Marketing (Hubspot, Salesforce), for Project Management (Jira, Basecamp, Clickup, Asana), to name a few.

Undoubtedly, given the line of benefits it brings, SaaS has been the most innovative investment for all SMEs. It has helped them handle growth challenges within the limited resources, expand beyond their geographical spheres, opt for selective options that would support an agile workflow, increase their product base, and become globally competitive.  

SaaS brings an enormous value creation potential, with the present SaaS market being worth about $3 trillion and expected to grow to about $10 trillion by the end of the decade. Anybody who is in this space of SaaS systems stands to gain. India has more than 1,000-plus SaaS companies and a vast developer pool. We have an exceptional understanding of the enterprises’ processes, and our workflows are superior. These companies bring about $2.6 billion in revenue, expected to grow to about $50 billion to $70 billion by 2030. We are looking at the phenomenal growth in the next nine to 10 years. 

Sameer Jain is Council Chair, SME Council at NASSCOM and Founder & CEO, Net Solutions. Views expressed are the author’s own.

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