43% of MSMEs in India plan to increase overall digitalisation budget next year

On World MSME Day, Vi Business has published findings from its study on micro, small and medium enterprises, which shows that almost 60% of MSMEs plan to digitise their business processes by 2025. Additionally, the enterprise arm of Vodafone Idea Ltd. also launched an enhanced digital assessment tool for MSMEs in English and Hindi.

The study explores the digital maturity of MSMEs across 16 sectors, including IT and ITes, financial services, transportation, construction, retail, agriculture, media and entertainment, and manufacturing, and how they are leveraging digitisation and technology.

Key highlights of the MSME Growth Insights study include:

Digital Maturity: The top three sectors with most digital maturity are IT-ITES, fi­nancial services and transportation. Also, sectors like retail and construction are also making significant strides.

Budget Allocation: Around 43% of MSMEs plan to increase their overall digitalisation budget by 2025. Sectors with lower digital maturity index are particularly inclined to increase their investments.

Senior Leadership Driving Digitalisation: Involvement of senior leadership or CEOs results in more comprehensive digital transformation, with success rates of digitalisation higher when championed by them.

Technology Use: Despite challenges like knowledge gaps and financial constraints, MSMEs are using technologies like cloud computing, internet of things and advanced workspace tools to improve productivity, collaboration and market reach. The study showed that 40% of MSMEs from IT and ITeS, retail and construction have adopted IoT solutions in business.

Digitalisation Is Positively Correlated With Turnover: According to the study, digitalisation has a direct positive correlation with the turnover. Further, as the firm size increases, the variation in digital maturity level narrows, indicating that medium to large firms have embraced digitalisation and there is scattered digital adoption among micro and small firms.

Need For Data Security And Privacy Solutions: Around 43% of MSMEs are currently using device security technologies, data and device protection. Furthermore, MSMEs with turnover of less than Rs 10 crore are using public cloud while those in turnover bracket of Rs 10 to 100 crore use private cloud, indicating the need for greater data security and privacy with the increasing turnover of MSMEs.

Vi Business’ newly launched Digital Assessment Tool, an extension of its MSME programme, focuses on digital customer, digital workspace and digital business. Based on responses, the tool provides user-specific report stating the digital maturity scores of business, benchmarked against the industry with relevant digital product recommendations.

“At Vi Business, we recognise the crucial role that MSMEs play in India’s growth agenda and their significant contribution to the economy. Our extensive MSME study highlights the encouraging progress being made by small businesses in India as well as the challenges that remain in their digital transformation,” said Arvind Nevatia, chief enterprise business officer at Vodafone Idea. NDTV Profit