In the fast-moving digitalisation era of today, digital literacy is increasingly critical for entrepreneurs as they continue to experience a business landscape that favours large corporates, often leaving small businesses at a significant disadvantage. Micro, small, and medium enterprises (MSMEs) play a vital role in the global manufacturing economy, contributing to the job market and yielding substantial revenues. Yet, they generally experience lower operating profits than larger corporations and typically have less than a five-year shelf-life.
The relentless closure of these businesses results from the numerous challenges MSMEs must face, including a large productivity gap, a significant lack of financing and most critically, a lack of digital literacy, resulting in suboptimal workflows and inefficient operational process designs. Additionally, the digital divide between businesses is widening. According to a recent Gartner survey, 85 per cent of leaders predict a surge in businesses requiring workforce skills development in the next 3 years to address any knowledge gaps, specifically in AI and emerging digital trends.
According to a Mastercard report, three quarters of small and medium businesses integrate digital tools into their daily operations but having a smooth digital experience remains a challenge. The same study also uncovered that a quarter of these business owners are overwhelmed by the daily management of roughly six different platforms, exhausting not only their time and energy but money.
The state of play of micro, small and medium businesses’ level of digital literacy
Despite their best efforts, like corporates, MSMEs find it incredibly difficult to choose the right modern solutions to boost their business and productivity. New Adobe research asked over 1000 small businesses across the U.S., UK, Australia, India, and Japan about “The Future of Digital Work,” discovering that these businesses are lagging significantly in digital proficiency and most need to address their tech adoption urgently.
Although 85 per cent of MSMEs recognise that technology is vital in today’s modern landscape, over half say that they are not fully digital, with many still relying on paper-based practices. Respondents indicate that these poor technology practices have led to a loss of two and four hours a day in productivity. This is not only incredibly costly but makes it even harder for enterprises to keep their doors open when the operational aspects of the business are floundering.
In order to survive to the five-year mark and beyond, MSMEs must swiftly prioritise improving their digital literacy and focusing on their operational excellence through continuous improvements and innovative solutions.
Digital literacy explained, and its key challenges faced by MSMEs
Forbes defines digital literacy as “the understanding and proper utilisation of digital technology” and maintains that it’s no longer a nice to have but a critical business imperative. Yet, it has evolved drastically, shifting from business owners and employees needing to know how to work a word processor, to utilising advanced workflows that include artificial intelligence (AI) and cloud computing.
Business owners are tasked with evaluating new innovative tools, which is challenging even for large corporates, leading to an elevated digital responsibility. According to a McKinsey and Co. Global Digital Lead Rodney Zemmel, “Every business leader needs to be a technology leader.” This is especially true for MSMEs, who have small teams and require agility, swift technology adoption and the ability to pivot to meet the requirements of the demanding era we live in.
MSME business leaders must face mounting challenges ranging from financial instability, high material costs, supply chain disruptions, workforce shortages and skill gaps but technological adaption continues to be the most vital, risking business viability.
The good news – research has shown that business owners who prioritise digital literacy can radically and positively impact digital business transformation. According to the research paper, Digital literacy and business transformation: social-cognitive learning perspectives in small business enterprises: “Digital literacy is the first step for micro, small and medium enterprises to advance growth via innovation and eco efficiency.”
The top three core areas that determine digital success
Digital literacy may be a modern MSME imperative, but changes are afoot in the business landscape driven by AI, innovation, modern demands and business requirements. This has led business owners to rethink their business goals, technology, and long-term growth strategy.
To ensure business longevity, savvy business owners must prioritise their technological adaptation and digital transformation while also continuously driving these three core areas:
1 – PRODUCTIVITY: boosting productivity through smart digital tools
MSMEs must have a strong understanding and embrace digital tools to close productivity gaps, resulting in optimised operational approaches and enhanced workforce technology synergy.
2 – DIGITALISATION: driving transformation with digitalisation
Digital transformation acts as an oxygen mask struggling businesses need, empowering them to work smarter through cutting-edge technology and guarantees a future-proof organisation.
3 – GROWTH: unlocking sustainable growth with innovation
Owners must assess their business foundation and use growth levers, such as innovation, to ensure they activate sustainable growth, which will empower them to scale further.
Bridging the gap: practical solutions for MSMEs
In order to address these challenges head-on, INCIT has designed the revolutionary Operations Excellence Readiness Index (OPERI), consisting of an “all rounded” self-assessment that MSMEs can leverage to increase productivity, fast-track digitalisation, and accelerate growth.
OPERI provides three essential features to help recognise improvement areas: a guided self-assessment, a star emblem system for benchmarking against industry peers, and detailed reporting with in-depth analysis to spotlight areas needing attention. Through an OPERI-guided self-assessment, manufacturing MSME owners will gain instant insights and actionable feedback to drive business growth.
Now, micro, small and medium manufacturers can quickly transform their organisation from the ground up to champion operational excellence and bridge the productivity gap while supporting key business objectives like adopting of strategic innovation, strengthening competitive positioning, and driving measurable growth.
The future of digital for micro, small and medium enterprises
It takes herculean effort for MSMEs to stay afloat during this tumultuous time, with challenges closing in from all sides, including geopolitical shifts, scarce financial support, etc. But digital literacy, when prioritised and ultimately achieved, can help business owners navigate these challenges in stride, allowing them to focus on what matters, ensuring their business is successful and fostering happy employees, leading to improved productivity and expanded growth.
How can OPERI help? OPERI supports MSME owners in ensuring they have a strong business foundation by promoting continuous digital literacy and leading to a clear path to successful digitalisation. With OPERI, MSME owners are equipped to overcome the prevalent digital challenges of today to unlock sustainable, long-term success. Join us to get on track toward digital excellence. If you’re ready to unlock your business’s full potential today, contact us.
