Digitization, in its purest technical definition, is the process of converting information into a digital format that is readable by computers. This format consists of numbers that are zeroes and ones. Digitalization is the use of digital technologies to convert information into a digital format. But when put to application in the real world, Digitization has the power to propel mankind to a realm that no one could have imagined a century earlier.

These technologies are remarkable and are converging together to transform the way businesses are conducted: clever software, novel materials, better robots with IoT, new processes (notably 3Dprinting), data analytics, and a whole range of intelligent web-based services courtesy AI and machine learning.  The factory of the past was based on creating identical products. But now is the age of extensive customization which is what factories of the future would focus upon. For this to happen, our businesses would need to undergo a digital transformation.


Why does digital transformation need to be acted upon now?

This can be answered when SMEs look within themselves as to what essentially their business needs to achieve? This could chiefly be — ways to deliver value to customers, creating a competitive field for their products, generating revenue to sustain and expand their business, and data security.

Now does digitalization help them achieve this? It does.

How? Let’s see.

Digital technologies are enabling radically new ways to deliver value to customers.

The digital penetration in our country has increased a lot due to the Government of India initiatives like Digital India and Skill India and the JAM trinity. We have a digital population of over 480 million, out of which 390 million access the internet via their mobile phones. So by creating mobile apps and websites, one can provide better, quicker, and value-driven services to their customers.

For example, India has more than 200 e-pharmacies with more on the way, most popular among them being 1mg, Medline, Netmeds, Pharmeasy, and Myra. Not only this, few SMEs in the textile industry like Anouk and Gerua sold their products on established e-commerce websites and developed a loyal customer base. Later, they started their own websites as well.

Digital technologies help to reach a bigger market 

By achieving a transformation of the domain in their businesses, digital technology has altered competitive landscapes. The starting of which in India was done by Flipkart where they overhauled the retail market. They developed a strong digital infrastructure and started a website wherefrom the most basic household goods to the newest gadgets can all be accessed in one place. It was essentially having a virtual stroll down Walmart.

Many SMEs in India followed the same model. Not only this, they took it a step ahead and ventured into the food hospitality sector where apps like Zomato and Swiggy scored big. Real Estate got itself Manufacturing companies like Patanjali and SMEs like Tijori Ayurvedic Skincare have their own websites to sell their goods. 

Embracing digital technologies greatly generates revenue

They save costs and time. Documents are stored in digital format and stored in the cloud, optimizing expenses. There is less office space required, stationery costs are reduced. Printing, sorting, filing requires tons of billable working hours and enhances the cost of the product. This can be minimized through digital technology.

One also gets enhanced performance and productivity. All critical data is now available in real-time on a mobile device, where the company and its employees can access it any time from virtually everywhere. This information could be anything ranging from comprehensive financial information on stock quotes, market data, communication with customers in an efficient way, and up to field workers able to communicate all the changes right away.

Security of company data

There are countless vulnerability issues when working with physical documents. Sophisticated modern security restrictions to protect data really work well throughout all the industries globally.


The advantages that digitalization brings with it are humungous to say the least. 

They help transcend geographical boundaries

Earlier a store opened in a place catered to the needs of that locality. Multiple stores required huge manpower. But today it is not so. Now products get a global reach, they can be accessed and processed anywhere irrespective of location. The offerings are extended to any Internet user, no matter the region of the country. Having access to warehouses at places and people to manage them can transform businesses. For example, Vinod Cookware was initially confined to areas in Mumbai and Palghar where their factory is situated. Their presence in stores was strong but after listing themselves on e-commerce sites, their revenue has multiplied manifold. A very good example of this can also be Bangalore-based hyperlocal delivery platform Dunzo which is helping neighborhood stores and kiranas in going digital by providing them with a platform for E-commerce logistics by offering online delivery support, live tracking, and API integration.

Value addition for our customers

Apps by small businesses can be highly customized. Customers get filters that help them lead to their desired products with just a few clicks. There is a presence of reviews and rating system which helps other customers in their future purchases. For example, which started as a place to buy personalized travel accessories has its own fan base now all over the nation. This process has made manufacturers get direct, true, and invaluable feedback which aids them in their progress. Unlike in the analog world, now the entire feedback mechanism has been condensed to a few minutes process which is cost-effective. It also gives a better customer service experience and forges better relationships.

Another way to deliver value is by giving the consumers products that are customized to their whims. This level of personalization in a traditional factory set-up is not possible. However the advanced engineering technique of 3D – printing can today help create prototypes, get them approved, and then create the same product via 3D – printing.

Digitalization helps increase sales:

Before digitalization came in, door to door sales was conducted, apart from contracting vendors and opening stores. This whole exercise was extremely labor-intensive. Now, Marketing Automation Tools (MAT) are a boon in this regard. When a company uses this, they not only sell their products because of the website, they are able to capture customer behavior and monetize its courtesy MAT to increase their sales.

It eases marketing

Marketing was done with fliers and on newspapers and TV. This presented a lack of certainty. A prospective customer may or may not see the flier. They may or may not read the newspaper on the particular day(s) you advertise or watch TV. But now, if one is able to accurately guess the digital footprint of their target audience, then marketing becomes so much easier. Placing advertisements using Pay Per Click, Google Ads, Google My Business help enhance the visibility of one’s product.

The single and biggest ‘blind spot’ in marketing prior to digital transformation was the lack of high quality data for marketing experts to make decisions. Once a poster for a restaurant or subway station was created, or a commercial for television was produced, there was no accurate way to engage the effectiveness of that marketing content. How many people saw that subway poster? How many people watched the commercial on television? what age group is liking the product or service most, let alone went out and bought the product strictly because of it? Thus Analytics was a game changer for marketing and digital transformation continues to emphasize just how useful it is going to be in all future marketing efforts. 

It helps in the creation of a Brand

It’s not possible to regularly interact and give personalized offerings and incentives to all the customers when one is not a part of the digital world. Gyan Dairy was able to achieve that by introducing their app. They offered incentives and cashback to their customers and have placed an effective communication system with them. This is very helpful in forging brand loyalty. Their goal was to challenge the supremacy of Amul in the dairy sector and it can be said that they have managed to give people an alternative to Amul today.  In the long run, they might even compete with Amul.

Social Engagement that involves information sharing

An average person spends 2.4 hours on social media. If a business has an active social media handle, they can not only increase their product visibility but also engage with consumers on a one-to-one level through podcasts, webinars, and social media posts. Thus digital transformation gives an opportunity to showcase their products and educate their customers at the same time. With so many advantages and opportunities in the offing, it’s important to capitalize on it. It’s imperative to do so quickly to create a niche for yourself in your chosen field.  It’s a race where you have to participate. The good thing is one doesn’t necessarily have to win it, participation is more than enough.

One could wax poetic about the wonders digitalization brings all the time. How it quickens processes, enhances connectivity, and access leading to building meaningful relationships is something which we have been hearing for a long time. One may ask if there’s any concrete proof of the same?

The proof is in numbers which have changed so dramatically. We are aware of how the titans in the business world today were once small businesses themselves. Companies like Amazon, Flipkart, Facebook, Netflix all acted by hitting the iron when it was hot, i.e. realizing the true potential of digitalization and acting on it. They spurred themselves and became unparalleled global leaders in their fields to the point of affecting even further digital penetration.

  • In 2007, 94% of the world’s information storage capacity was digital. This was a complete reversal from 1986 when 99.2% of all storage capacity was analog.
  • In 2008, more music was sold by iTunes than by Wal-Mart.
  • In 2010, the production of digital cameras peaked at just over 120 million as they are replaced by smartphones.
  • In 2011, sold more Kindle books than print books.
  • In December 2012,  annual e-commerce sales top $1 trillion worldwide for the first time.
  • In 2017, online advertising (203.59 UDS) surpassed TV advertising (184.46 USD) worldwide. It had already done so for newspaper advertising in 2012
  • Since 2008, there has been a decline of almost 86% courtesy of digital platforms like Netflix, HBO, Hotstar, and what not.
  • As of April 2020, the global digital population is 4.66 billion.

By going digital not only they have managed to alter the consumer consumption patterns but in doing so, have created entire business domains for themselves. This has created certain realities which can no longer be ignored. Therefore, to stay relevant, SMEs must move towards accepting digitalization.

Way Forward?

Technological change is nothing new—but this round of change is happening at a rate faster than ever before. Some executives cite this transformation as ‘disruptive technologies’; that risk is certainly real. But if one does not evolve with the world, they are likely to be left behind. While new technologies may threaten established businesses, they can also create unprecedented opportunities. 

Also, an increasing number of executives are more concerned with missing opportunities to grow, than being forced into oblivion. It is not digital disruption that is impelling companies to change, it is digital “FOMO” (Fear Of Missing Out). 

Being bombarded with such diverse options from all sides can be overwhelming. This is why the primary goal should be to enforce digital transformation with a clear cut vision. The strategy should lead to innovation. As long as business initiatives are aligned with business objectives, companies will achieve success.


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