SMEs – Their significant role in the Indian economy and the challenges they face.
Small and medium-sized enterprises (SMEs) on a global scale have become the backbone of struggling and developing economies. They are constantly looking for a solution to recession and unemployment. Governments widely encourage entrepreneurship to provide multiple benefits including job creation, increased productivity, increased industrial production and exports, entrepreneurship development, rural economy development, healthy competitiveness, the gradual eradication of poverty and achievement of various societal goals. One of the universal concerns is to facilitate the creation of such companies.
Despite playing a key role in Indian economic development, Indian SMEs have to deal with major challenges such as insufficient credit facilities, unavailability of suitable technology and qualified human resources. In doing so, they face both national and international competition in their respective industry or in the organizations associated with it.
India’s technology sector, including the major Indian corporation, as well as small and medium-sized organizations have helped businesses worldwide. An evaluating look at technology uptake by SMEs would show that the manufacturing and service sectors are comparatively slow in technology uptake. They still rely heavily on traditional non-technical systems for sales, marketing, and finance, as well as for maintaining customer interactions.
India’s ambitious growth goals and economic goals can be achieved by providing adequate support, training and support to SMEs. Technology adoption may be the single most important factor in this growth strategy.
Some of the main challenges faced by SMEs are discussed below:
Limited cash flow
The SME sector is mainly formulated by individuals bringing their own expertise and manpower with limited capital.
The workforce consists primarily of family and friends who also serve as general support and source of funds. Owners, financial institutions could only contribute limited shares. SME revenues and profit margins are under severe pressure. All of this continues to create extreme competition between them.
The Indian business landscape is changing rapidly. Not only for large companies, but also for medium-sized companies. One of the biggest drivers of this long-lasting and rapidly evolving change is technology and communications. When assessing technology adoption by SMEs in India, it is clearly inevitable that several obstacles stand in their way. The main barriers to technology adoption in SMEs are as follows
• Lack of awareness among beneficiaries
• Ignorance of technology
• Lack of proper guidance
• Lack of credible support from government institutions
• Very poor technology acceptance.
The technology is extremely important in all areas like selling an online marketplace, inventory management, post-sale support, financial reporting, etc.
SMEs somehow don’t pay the attention to technology adoption that it deserves. SMEs are not confident enough in the return on investment in technology and cost is the main obstacle.
Several rules and regulations are set by governments that run the business. Organizations usually change the way they operate when the government changes their policies. Government economic policies and market regulation affect corporate profitability. Federal, state and local regulations are to be drawn up by the owners. As technology changes rapidly, it is important for companies to innovate.
Technological challenges for SMEs can easily be handled by IT consultants. You advise and integrate new technologies, especially in the mobile sector, for app development and in cloud computing.
Dependence on physical IT resources
Enabling employees to work productively and ensuring the security of the IT network and data is a major challenge for SMEs. Systems should actively work to help employees work effectively. Cloud computing and IT managed services have helped businesses tremendously. Some organizations also outsource IT services.
Not keeping up with changing technology
Rapidly advancing technology requires these organizations to keep up with its pace. Purchasing the latest smartphones, tablets, routers, and other such consumer devices for an entire team can be expensive. It is very expensive to subscribe to software-as-a-service applications, which are very important for many functions such as accounting, customer relationship management, billing, etc. Due to budget constraints, SMEs cannot update technology frequently, so technology budgeting is one of the biggest technology challenges for SMEs.
Upgrading technology is very important as it helps businesses to be competitive and enables employees to work better and more efficiently. Setting an accurate annual budget is essential to keep technology current.
Unsuitable security systems
Power failure, server crash, accidental file deletion or such data disaster can destroy important data in the system. SMBs don’t have big budgets for data backup, storage and protection. You don’t have a backup and disaster recovery plan. The appropriate backup solution and disaster recovery steps can help to manage and overcome these events, thereby avoiding the associated costs. Various data solutions are available.
Unclear device policies
The security of information technology systems is one such task for which every employee is responsible. Policies should be implemented and clearly communicated to employees.
In order to make SMEs aware of all the resources available for technology adoption, it is important that the Indian Government, private sectors and training institutions and other stakeholders work together to develop an effective communication program for SMEs.
The government today is very concerned about the growth of SMEs like never before. SMEs are offered subsidies and other cost benefits. As awareness of these benefits increases, including reduced costs, our Indian economy will adopt more advanced technologies. These organizations must recognize that technology is not just an option, it is a necessity.