Indian MSMEs on the cloud crossroads

If the COVID-19 pandemic taught us anything about business resilience, it is that flexibility and adaptability are key to survival. For Medium, Small, and Micro Enterprises that don’t typically have the kind of infrastructures or financial backing to absorb the impact of volatility caused by the pandemic or political tensions, their ability to adapt prevents their extinction. 

Shouldering one third of the GDP, MSMEs are the core of India’s economy. Any adversity the sector experiences will impact their contribution, making it more crucial than ever for enterprises in this sector to have the flexibility to scale up and prove a match for global competition from other emerging economies like China. 

How exactly do MSMEs remain flexible and adapt? The answer lies in Digital Transformation. An India MSME Forum survey of over 1.29 lakh MSME respondents found that a staggering 70% of MSMEs cited lack of knowledge and guidance in using such tools, high cost of investing in these technologies, and lack of skilled talent to manage them among the key hurdles towards adoption of technologies like cloud computing. 

Why Cloud?

A decade back, AI and ML were not popular buzzwords and IoT was still in its infancy. Cloud was just an environmental factor responsible for thunder and rain. Today, organisations across sectors are using powerful algorithms that run on AI, in their day-to-day operations, getting better at forecasting and planning for efficient use of resources. 

Cloud Computing is particularly driving growth and resilience for enterprises through enabling collaboration irrespective of geographic constraints. Microsoft’s Azure, and Amazon’s AWS have emerged as the leaders in Cloud Computing technologies that benefit businesses by cutting down the capex of building a physical IT infrastructure while helping businesses expand their footprint to newer regions.

Driving Profitability

It is true that Cloud makes enterprises adapt more easily to changes demanded by the pandemic such as remote working, sharing critical resources digitally, and scaling operations up or down as required. It’s not surprising that enterprises with purely on-premises infrastructure struggled to meet such requirements. 

As more businesses race to shift to the cloud, the change also creates a shortage of professionals skilled to meet the new requirements. And this is where the organisations that have invested in skill development for their people in these areas then would reap the benefits of these technologies. 

The same holds true for emerging trends in tech and other skills that hold value for the future. Investing in training employees is one way to future-proof the organisation’s interests.  

The Learning Curve

In a global business context, enterprises are moving to a multi-cloud environment to ensure that business continuity does not suffer. Indian MSMEs that are still wondering whether to move to the cloud are already behind 90% of their global competitors. 

Organizations that see cloud migration as an opportunity for growth and invest in it rather than treating it as an expense, are more likely to see their investments offset by the long-term benefits and growth that their enterprise can experience. 

For businesses concerned about the investment required for the switch from legacy systems to cloud, it is simply a question of choice. Holding on to existing systems may help them save on the cost of upgrading in the short term, but as digital modes of working become the norm, they might find themselves edged out by competition with faster reflexes and higher adaptability.

Skills for the Win

As the gap widens between the need for digital transformation in MSMEs and the number of skilled professionals who can drive it successfully, there is one clear path to ensure balance. That is upskilling. 

Holistic growth and development can occur as individuals and organizations address the scope for skills training and make it a part of the business strategy to ensure that time and resources are allocated for individuals and teams who will drive the digital transformation for the enterprise. 

The emergence of the EdTech sector can be leveraged by such MSMEs to implement training and upskilling of teams in leveraging the power of cloud computing to ensure that business risk is minimised, business agility is improved, and business interests are future-proofed with sustainable growth plans. 

The Road Ahead

The saying that the road to doom is paved with good intentions holds true for Indian MSMEs. Whether they go down this road or manage to avoid it will depend on how willing they are to infuse the business with current technologies, which in turn will also enable them to attract and retain top talent that ultimately will enable sustainable growth. 

Investing in Digital Transformation, leveraging the power of technologies such as Cloud Computing and dedicating resources to upskill teams in implementing such digital ecosystems for their enterprise is the way ahead for the Indian MSME sector to go beyond survival towards beginning to thrive.

The article has been written by Subramanyam Reddy, Founder and CEO, KnowledgeHut