Copilot Initiatives: Solution Or Distraction For India's SME Woes?

As India's small and medium-sized enterprises (SMEs) continue to grapple with the challenges of accessing credit, managing cash flows, and navigating the complexities of the digital economy, a new solution has emerged on the horizon: the Copilot initiative. But will this innovative platform be a game-changer for the country's SME sector, or will it add to the noise of well-intentioned but ultimately ineffective solutions?

Recently, Embee Software, a Microsoft partner in India started “Copilot SME”, an initiative designed to democratize access to Microsoft’s AI technology for businesses of all sizes across the nation. This campaign aims to revolutionize business operations by integrating Microsoft 365 Copilot into diverse industry functions.

The company said that the initiative will feature workshops in major cities to provide hands-on experiences, highlighting how Microsoft’s AI can enhance operations in areas such as human resources, marketing, finance, sales, and development.

“Integration is a key focus area for Embee, especially for SMEs that may have diverse IT infrastructures and varying digital maturity. Embee works closely with each client to conduct a thorough assessment of their existing systems, identifying compatibility challenges early on. We provide tailored integration pathways, ensuring that Microsoft 365 Copilot’s AI capabilities blend smoothly into both cloud-based and hybrid setups, minimizing disruptions,” said Bipul Kumar Patra, Head of Technology and Business Strategy, Embee Software.

Another Copilot Initiative
Shiprocket, an Indian ecommerce enablement platform, has introduced Shiprocket Copilot—an AI-powered assistant designed to transform 1 lakh plus sellers' management and expansion of their ecommerce businesses. The company stated that it handles a wide range of critical tasks, from processing orders and checking COD billing to assisting with queries on international shipping or Whatsapp suite, offering solutions that are precise to the queries and suggesting ways to incorporate those into sellers' business.

"We built Shiprocket Copilot to be as intuitive and accessible as possible, with MSMEs’ varying technical skills in mind. Our goal was to make Copilot as easy to use as an online search, a familiar experience for many of India’s small businesses. We’ve enabled Copilot to understand and respond in multiple languages, so users across regions can engage comfortably. To ensure smooth onboarding, we provide guided tours, step-by-step tutorials, and a library of common questions right on the homepage, so users can get started quickly and confidently,” said Praful Poddar, Chief Product Officer, Shiprocket.

According to a recent study by Meta, 94 per cent of MSMEs acknowledge AI's potential to drive significant business growth, with 91 per cent emphasising the need for accessible and affordable AI technologies. Experts noted that the integration of AI tools is essential for businesses in India. With the ability to streamline processes, improve decision-making, and increase efficiency, AI helps organisations adapt to rapid changes and meet evolving customer demands. As businesses move towards digital transformation, leveraging AI technology becomes a key factor in driving growth and maintaining a competitive edge.

PayNearby's report titled the 'MSME Digital Index 2024 stated that about 36 per cent of MSME owners and 18 per cent struggle with the high costs of technology implementation. The report highlighted that over 65 per cent of these businesses now incorporate digital tools into their daily operations. 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.

Data Security And Safety
For Indian small businesses, delayed payments and debt are not the only issues, the country’s micro, small and medium enterprises (MSME) and startups are fighting another epidemic of ransomware attacks. In the face of increasing digital attacks, no business is too small to be targeted by cybercriminals.

A 2022 study by the cybersecurity company, NordLocker revealed that India is among the top countries hit by ransomware attacks with more than half targeted at the nation’s small businesses. Notably, the report stated that MSMEs with an employee base of 500 are at the highest risk, consisting of about 54 per cent of total attacks from January 2020 to July 2022.

Shiprocket’s Poddar added, "We thoughtfully engineered Shiprocket Copilot with MSMEs’ data security and privacy as core principles. Copilot operates strictly on-demand, so it only connects to data when users actively request information, ensuring that sensitive data isn’t continuously accessible. By using a secure, private network for all data requests, Copilot does not store or process data itself. This setup allows us to keep our AI functionality separate from actual business data, preventing leaks and maintaining user privacy, while still delivering a powerful, intelligent experience for MSMEs.”

Notably, Akamai Technologies, a cloud company in a report has stated that the use of zero-day and one-day vulnerabilities has led to a 204 per cent increase in total ransomware victims between Q1FY2022 and Q1FY2023 in Asia-Pacific and Japan (APJ).

The report also found that ransomware groups increasingly target the exfiltration of files and the unauthorised extraction or transfer of sensitive information, which has become the primary source of extortion. This new tactic indicates file backup solutions are no longer a sufficient strategy to protect against ransomware.

“Security and compliance are paramount, especially with the stringent requirements of the Indian Personal Data Protection Bill. Embee leverages Microsoft’s inbuilt security framework, which provides features like data encryption, multi-factor authentication, and detailed access controls within Microsoft 365. Additionally, we work with our clients to customize Copilot settings to meet specific industry regulations, ensuring that all data processed by AI tools remains fully compliant with Indian regulations,” added Embee Software’s Patra.

The copilot initiatives have the potential to be a game-changer for India's SME sector, addressing long-standing challenges such as access to credit, managing cash flows, and navigating the complexities of the digital economy. However, as with any new technology, data security and safety concerns must be addressed. As the Indian government continues to promote digital adoption among SMEs, these concerns must be mitigated, and platforms like Copilot are designed with security and compliance in mind.