Adapting to change: Strategies for SMEs/ MSMEs in the era of Disruption


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Jun 13, 2023


This is a Guest Blog by Mr.Krunal Shah, Co-founder & Strategic Consultant, The Proxperts

In the rapidly evolving world of business, where technology has become an integral part of our lives, small and medium enterprises (SMEs) and micro, small, and medium enterprises (MSMEs) face unique challenges in adapting to the disruptive changes brought about by digital transformation. While large formal businesses have embraced technology, the vast universe of informal businesses, primarily MSMEs, have struggled to keep up. However, there are strategies that SMEs/MSMEs can employ to navigate this era of disruption and thrive in the changing landscape.

Adapting to change: Strategies for SMEs/ MSMEs in the era of Disruption

India’s MSME sector is the second largest after China, with over 64 million businesses contributing significantly to the nation’s socio economic growth. Despite numerous challenges related to policy and regulatory frameworks, such as complicated taxation, licensing procedures, high compliance costs, and inadequate infrastructure in Tier 2 and 3 cities and rural areas, MSMEs in India have the potential to flourish further. The increasing affordability of smartphones, low internet tariffs, growing use of digital media, and rising awareness of online platforms have spurred the future growth of MSMEs in India. Additionally, government policies like GSTN, e-way bills, MSME Udyog Aadhar, and NPCI have played a vital role in democratizing business opportunities and making it easier for MSMEs to embrace digital technology. 

The business landscape is constantly evolving, with new technologies and market dynamics driving change at an unprecedented pace. For small and medium enterprises (SMEs) and micro, small, and medium enterprises (MSMEs), the challenges brought about by disruption can be particularly daunting. However, by embracing change and implementing effective strategies, SMEs/MSMEs can not only survive but also thrive in this era of disruption.

1. Modernizing Hiring Practices

Traditionally, SMEs/MSMEs relied heavily on hiring from their immediate networks, such as friends and relatives. However, in today’s competitive environment, a more systematic approach to hiring has emerged. Psychometric tests and various tools have been introduced to assess candidates’ skills, capabilities, and cultural fit. By adopting these practices, SMEs/MSMEs can ensure they hire the right talent for their organizations, leading to improved performance and productivity.

2. Streamlining Performance Management

In the past, increments and performance evaluations were often subjective and prone to bias. However, the implementation of performance management systems (PMS) has revolutionized this process. PMS provides a structured and transparent approach to evaluating employee performance, linking it to specific goals and objectives. This system ensures fairness and consistency in determining increments and rewards, fostering a more motivated and engaged workforce.

3. Leveraging Process Automation

SMEs/MSMEs have traditionally been heavily reliant on manual processes, leading to inefficiencies and increased dependency on individuals. However, the adoption of automation technologies such as 5S, Customer Relationship Management (CRM), and Enterprise Resource Planning (ERP) systems has significantly reduced this dependency. CRM systems enable businesses to effectively manage customer interactions, track sales, and streamline marketing efforts. ERP systems integrate various functions like finance, human resources, and inventory management, leading to improved efficiency and productivity. By embracing these technologies, SMEs/MSMEs can enhance their operations, minimize errors, and gain a competitive edge.

Understanding CRM and ERP Systems:

Customer Relationship Management (CRM) is a software system that helps businesses manage their interactions and relationships with customers. It enables organizations to track customer information, manage sales pipelines, and provide personalized experiences. CRM systems enhance customer satisfaction, improve retention rates, and support targeted marketing campaigns.

Enterprise Resource Planning (ERP) is a comprehensive software solution that integrates various business functions into a single system. It allows SMEs/MSMEs to manage processes like finance, accounting, inventory, human resources, and production. By centralizing data and automating workflows, ERP systems enable efficient resource allocation, streamlined operations, and enhanced decision-making.

To sum it up 

The era of disruption presents both challenges and opportunities for SMEs/MSMEs. By adapting to change and embracing strategies that foster efficiency, transparency, and productivity, these businesses can not only survive but also thrive in this dynamic environment. Modernizing hiring practices, implementing structured performance management systems, and leveraging automation technologies like CRM and ERP systems are key steps toward building resilience and achieving sustainable growth. Embracing change and staying ahead of the curve will empower SMEs/MSMEs to navigate disruption successfully and emerge as industry leaders.


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