The study is grounded in a nationwide survey encompassing over 600 Small and Medium Enterprises (SMEs) across 14 cities, complemented by focused group discussions. It sheds light on the evolving landscape of digital transformation and sustainability practices within these SMEs, pinpointing the challenges they face and, crucially, offering specific recommendations to surmount them.

Digitalisation has become a pivotal force in India, with SMEs progressively embracing technologies like e-commerce platforms, digital marketing, cloud computing, and automation tools. The survey underscores this trend, revealing that 60% of enterprises utilise digital tools in human resources, 51% in sales and marketing, and 48% in finance functions. Notably, accounting software such as Tally, Vyapar, Busy, and business applications like ERP and CRM are widely adopted. Moreover, 37% of enterprises have embraced cloud-based business applications like IaaS, PaaS, and SaaS, indicating a significant shift toward cloud technology.

The integration of digital technologies has yielded substantial benefits, including enhanced productivity and reduced operational costs. Around 35% of respondents reported a reduction in annual operational costs by 11-20% due to digitalisation, while 30% experienced reductions exceeding 20%. E-commerce platforms have played a pivotal role, enabling SMEs to expand their customer base significantly. 71% of participating enterprises had their own online sales channels, with 24% generating more than half of their sales online.

However, challenges persist, especially in terms of onboarding on e-commerce platforms. Approximately 40% of respondents cited a lack of skilled resources and technological expertise as barriers. Although government initiatives like the "Digital MSME" scheme exist, there's a need to enhance awareness about these programs among SMEs.

Additionally, the study advocates leveraging Digital Public Infrastructure (DPI) such as the GeM portal for public procurement and the TReDS platform for receivables financing. While awareness about these platforms exists, efforts are needed to enhance adoption through workshops and awareness campaigns. Policy suggestions include automatic publishing of GST-registered MSMEs? invoices on TReDS and reduced charges on GeM, among others.

Furthermore, sustainability practices are gaining momentum among SMEs, with 72% of respondents expressing awareness of Environmental, Social, and Governance (ESG) practices. However, challenges like time constraints and limited funding hinder widespread adoption. The study suggests investing in sustainability training, defining clear goals, and fostering collaborations to overcome these obstacles.

In summary, the study underscores the dual importance of digitalisation and sustainability practices for SMEs in India. While there is progress, concerted efforts in awareness, education, and policy enhancements are essential to maximise the benefits of these transformative initiatives.

Source: ANI