The global spend for digital technologies is slated to touch $6 trillion by 2024 as per an IDC report. In India, several large businesses have been investing in digital technologies and have started realising the benefits of digital transformation as evidenced in banking, insurance, manufacturing and retail sectors. The ongoing digital led successes of these businesses from customer facing or operations domains are leading them to undertake digital transformation initiatives in other facets of business too. Yet, we have a significant distance to cover in the global digital competitiveness, with India being placed 48th among 63 nations.
One of the key stakeholders who would contribute to digital competitiveness – the MSMEs— have been slow to adopt digital technologies. For India’s aspiration to become a $5 trillion economy, MSMEs will have a significant role to play and adoption of digital technologies would be the corner stone for this roadmap. It is also true that the risks involved with digital initiatives are also high with 60-80% of them failing to deliver on the expectations of digital transformation. Not only is the risk appetite low with the MSMEs, they also need help with risk analysis and minimise the potential failures even though their investments would be much smaller. Therefore, in order to make the MSME sector vibrant we need a multi pronged approach for digital transformation.
Due to digitalisation, the requirements of large businesses from their vendors and distributors would be changing dramatically and in order for them to continue to remain their business partners, it is important to train and mentor them for the transformation journey, extending their own digital knowhow and experiences. We need to launch a national movement similar to the quality movement of the ’90s when large companies started adopting ISO 9000 practices to be able to do business with European companies and in turn set expectations from their vendors to enhance their quality standards. In order to build momentum for this drive, industry associations like CII came forward with an effective assessment programme to help ready the organisations for quality certification.
The innovation ecosystem and the Centres of Excellence set up by the STPIs is a noteworthy initiative to support the digital enterprise creation in the country. In addition to the focus on incubation of startups under these COEs, efforts should also be specifically directed towards strengthening the MSMEs in their core domain areas or assist them in. There is also a requirement to create a special fund to help the MSMEs with attractive credit terms for their digital initiatives for acquiring the new knowhow to succeed in the digital era. The recently launched Centre for Digital Transformation and the DXL initiative by CII aimed at assessment of businesses and the business units for their digital maturity is an excellent step in this direction. This assessment coupled with the creation of the ecosystem to support the MSMEs for training, coaching, consulting, implementation and case study pointers to build confidence, minimise the risks and take advantage of industry best practices would be a welcome initiative to reinvent productivity or create new revenue opportunities. In order to remain globally competitive, digital is no longer a question of ‘if’, it has to be ‘how soon and what areas to transform’.
The writer is chairperson, Global Talent Track, a corporate training solutions company