60% of MSMEs Target Digital Transformation by 2025, Reveals Vi Business Study By Chetan - 09 July 2024

Digital Transformation

Nearly 60% of India’s Micro, Small, and Medium Enterprises (MSMEs) aim to digitise their operations by 2025, as revealed by a Vi Business study titled “ReadyforNext MSME Growth Insights Study Vol 2.0, 2024.” This move is important for the sector, as it contributes about 30% to India’s GDP. Additionally, this figure is targeted to increase to 35-40% by 2027.

According to the study, the IT-ITES, financial services, and transportation sectors are leading in digital maturity, followed by retail and construction, which are also advancing in their digital transformation efforts. By 2025, approximately 43% of MSMEs are planning to boost their digitalisation budgets, especially those with lower Digital Maturity Index (DMI) scores.

The study denotes higher success rates when senior leadership, or CEOs, take the lead. MSMEs are adopting technologies like cloud computing, IoT, and advanced workspace tools, at a higher rate despite challenges due to knowledge gaps and financial constraints. 40% of MSMEs in IT-ITES, retail, and construction, have implemented IoT solutions.

A shift towards digitalisation of the workforce was prioritised by MSMEs during the pandemic, and in 2024, the focus has shifted towards digital customer engagement and security. Digital transformation is positively correlated with turnover, with medium to large firms showing higher digital maturity compared to micro and small firms.

Also read: Rx Digital Transformation: The prescription for the Pharmaceutical & Healthcare Industry

The study also highlights a growing need for data security, with 43% of MSMEs currently using device security technologies. Smaller MSMEs with turnovers below ₹10 crore prefer public cloud solutions, while larger ones within the ₹10 – 100 crore range opt for private cloud solutions.

Government initiatives like Make in India, Aatmanirbhar Bharat, Udyam Portal, and Udyami Mitra are also playing a role in improving MSME productivity and competitiveness. Vi Business surveyed 160,000 MSMEs across 16 sectors for the study, providing insights into their digital maturity and strategies for leveraging technology.

The study categorised MSMEs according to digital customer engagement, workspaces, and business processes, offering tailored digital maturity scores and product recommendations.

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