Priti Anthwal Marketing Specialist

January 03, 2023 TECHNOLOGY

Why is digitization essential for SMEs?

What are SMEs?

SMEs stands for all the Small and Medium Enterprises. Firms fall under SMEs category due to its nature of keeping revenue, assets, and employee to a limited constraints.

Every nation has created its own set of guidelines for classifying businesses globally. Despite terminology variations, all nations separate firms based on their size or organizational structure.

India is home to many small and medium-sized businesses in addition to large corporations like TCS, Mahindra, Infosys,Adani etc. However, SME's make up about one-third of India's GDP approx.

Now that you have understood, what SMEs are? So, Let`s quickly take you through the facts of Indian SME sector (Source

• India accounted for nearly 27 percent of India's GDP in financial year 2021.

• It is estimated that there are 633.9 lakhs MSMEs in India.

• The MSME sector is among the country's major exporters and accounted for 49.5% of India's total exports in FY 21.

• As per the data from the Udyam Portal of the Ministry of MSMEs, 93, 94,957 people were employed by MSMEs registered on the portal in FY 22.

Amazed by the facts right? Despite the important sector of our Indian economy, it is still lacking growth and is not up to the correct pace. Let`s dive in to see How digitization impacted India SMEs sector?

Digitalization is the transformation of a business model using digital technologies to increase revenue and value-added opportunities. It is the transition to an online economy. Small businesses are benefited by digitization in terms of lead generation, revenue generation, and brand recognition.

Reduced operational costs

Saving time and, more significantly, money is the goal of any business owner. Since manual tasks and procedures are carried out one at a time, they are inherently slower than automated activities and processes.

The best and most economical use of your core functions is made possible via digitization.

Better digital presence with low cost advertisement

A company's establishment is as challenging as marketing to its target audience. Even for a small campaign, it requires a significant financial expenditure.

Small businesses already operate on tight capital budgets, so none of them could afford that.

However, nowadays, micro businesses are using social media and their websites to promote their online presence.

Minimal work duplication

Automation greatly reduces the possibility of human error in operations. Humans are more likely to make mistakes than machines when performing jobs.

Machines can operate continuously around-the-clock and never get tired. So let's automate the jobs we don't want to complete and focus on the more difficult ones.

Quality and consistency

With the advent of digitization, you may begin designing higher-quality, more feature-rich products with little or no increase in manufacturing time and costs. You would be able to offer more value added service to your client that too in a consistent manner. For instance, sales automation software MiCLIENT

Easy Financial tracking

A physical book called "Book keeping," which accountants once used to keep track of their financial transactions, no longer exists. Businesses use internet tools like TallyErp, QuickBooks, and other financial software to keep their finance organized.


SME's has realized that digitization is the best way to keep up with the fast-paced business climate. Every company has an own path to digitalization. Because digitization is the future of Modern enterprises, it is never too late to start for companies that have not yet taken the initial step.