About 60% MSMEs Plan To Digitise Businesses By 2025: Study

Almost 60 per cent of MSMEs plan to digitise their business processes by 2025, a Vi Business study on mapping the digital maturity of MSMEs revealed. The ReadyForNext MSME Growth Insights Study Volume 2.0 by Vi Business covered 1.6 lakh respondents across 16 industries in India.

Vi Business also launched their digital assessment tool in English and Hindi as an extension of their dedicated MSME programme, #ReadyForNext which focused on three key pillars: digital customer, digital workspace, and digital business.

Among sectors like agriculture, media and entertainment, manufacturing, mining, professional services, education, tourism and hospitality, healthcare, and others, IT-ITES, financial services, and transportation emerged as the most digitally mature. Sectors like retail and construction have also made significant strides in how they are leveraging digitisation and technology.

With the fourth largest score, the construction sector saw its digital maturity increase from 57.8 to 61.4 between 2023 and 2024. A distinct increase in the focus on customer centricity, with digital customer scores going up from 52.3 to 60.9, was also observed.

According to the study, 43 per cent of MSMEs planned to increase their overall digitalisation budget by 2025, reflecting a growing commitment towards digital transformation. Moreover, success rates of digitalisation were higher when headed by senior leadership and CEOs.

Despite challenges like knowledge gaps and financial constraints, MSMEs increasingly used technologies like cloud computing, loT, and advanced workspace tools to boost productivity, collaboration, and market reach, with 40 per cent of MSMEs from IT & ITeS, retail, and construction adopting loT solutions in business.

In 2024, MSMEs focused on engaging with their customers digitally to meet evolving customer expectations. Further, the study showed that as firm size increased, variation in digital maturity level narrowed, indicating that medium to large firms have embraced digitalisation and that there is scattered digital adoption among micro and small firms.

43 per cent of MSMEs use device security technologies, data, and device protection. MSMEs with turnovers of less than Rs 10 crore were using the public cloud. In contrast, those with higher turnover used the private cloud, indicating the need for greater data security and privacy with the increased turnover of MSMEs.

Commenting on the study, Arvind Nevatia, Chief Enterprise Business Officer at Vodafone Idea, said, "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.”

Medium, small, and micro Enterprises (MSMEs) currently contribute 30 per cent to the country's GDP, and several studies suggest that their contribution may increase to 35 to 40 per cent by 2027. Adopting digital transformation will increase their growth potential.