India is currently home to more than 6.3 crore Micro, Small and Medium Enterprises (MSMEs), generating employment for more than 11 crore people and contributing approximately 30% to the country’s GDP. So, it is no surprise that the MSME sector is often described as the backbone of the Indian economy.
However, like the rest of the world, the COVID-19 pandemic has had an adverse impact on every business. But, upon close observation, it can be found that the effect has been more severe among MSMEs as compared to large enterprises. This is mainly due to their small scale of operations, which makes them vulnerable, but it also could be an advantage as it allows them to be flexible and open to change and transformation.
As businesses embark on the path to recovery, we must understand the challenges faced by MSMEs. We also need to look at the role of technology in helping them navigate the emerging business landscape. More specifically, SAP Business One, which is being widely embraced as a leading solution for MSMEs.
New business landscape, new challenges
The evolution and democratisation of technology in the last decade have brought about significant business landscape changes. While we were already on the fast track to the Digital Age, the pandemic accelerated the pace and accentuated the nature of change. As a result, MSMEs find themselves in a new business landscape with contemporary business challenges.
- Contracted access to capital and finance: Long payment cycles and a dip in revenues have weakened organisations’ financial health. However, despite a challenging economic climate, MSMEs need to infuse capital as they look to restart and rebuild.
- Unpredictable disruptions in the supply chain: A significant fallout of COVID-19 has been the physical disruption in the supply chain, which has necessitated alternative vendors. At the same time, uncertain uptake has made it difficult for businesses to manage inventory and maintain delivery schedules.
- Fluid consumer behaviour and demands: The change in business cycles and economic conditions has made consumer behaviour and demand quite fluid. This, combined with the changing buyer behaviour and the emergence of e-commerce, both in the consumer and the B2B segments, has made it challenging for businesses to gauge end-user expectations, which impact the overall business operation.
Benefits of deploying SAP Business One
SAP Business One is a single-window ERP solution designed for MSMEs and integrates an array of functions needed to run a business. This includes accounting and financial reporting, procurement, inventory management, and sales and customer relationship management. Besides automating numerous processes, SAP Business One offers rich analytical capabilities that leverage available data to gain insights into the business.
- Improve financial reporting and cash flow: Streamlining the finance processes allows companies to understand their financial posture better. Automation of accounting and banking processes have a direct impact on receivables and cash flow. Other improvements include better budgeting, monitoring and asset tracking as well as regulatory and taxation-related reporting.
- Strengthen procurement and supply chain: Integration of the procurement function and supply chain enables better inventory planning and is crucial for smooth operational continuity. Additionally, end-to-end digitisation of processes – from vendor identification and requisition to receipts, stock keeping and payments management – can transform the function and make it more resilient.
- Deliver superior customer experience: Unified control over and visibility of the complete customer lifecycle is key to delivering a superior customer experience. It allows businesses to understand customer needs better and track the entire process, from pre-sales and marketing to support and CRM.
- Agile decision-making with data and analytics: One of the biggest benefits of SAP Business One is its ability to tap organisation-wide data to derive business intelligence. With automated and customisable reports and real-time visibility, leaders, as well as managers, can conduct granular analyses and take timely, data-driven decisions.
India’s MSME sector is emblematic of the country’s culture of entrepreneurship and the spirit of a new Digital India. Considering the recent trends, the MSME sector is expected to play a major role in the country’s economy. As the world enters a digital future, SAP Business One enables MSMEs to take a massive leap in their journey and tap new opportunities.