A recent survey by Zoho Corporation reveals that micro, small, and medium enterprises (MSMEs) in India are significantly increasing their IT and cloud investments to tackle digital challenges. The survey, titled “State of Digital and Customer Operations in Indian MSMEs,” collected responses from 5,149 MSMEs across the country between April and June 2024. It aimed to gauge the level of digital adoption, usage trends, and the hurdles these businesses face in their digital transformation journey.
Key Findings
Increased IT and Cloud Investments
The survey indicates that 81% of MSMEs plan to increase their cloud spending in 2025. Among the 98% of MSMEs planning their IT budgets, 77% have allocated up to 50% for cloud solutions, while 23% have allocated more than 50%. This highlights the growing importance of cloud adoption for operational efficiency and competitiveness.
Digital Adoption Challenges
MSMEs face several challenges in their digital adoption journey, including high software costs, budgetary constraints, a lack of tech skills, and integration hassles. Despite these challenges, the key technology areas for businesses this year are Customer Relationship Management (CRM), financial services, and business intelligence.
CRM Solutions
CRM solutions are crucial for MSMEs, with 87% of respondents either having used or currently using a CRM solution. Among these, 97% reported improvements in their customer operations. Additionally, 90% of MSMEs not currently using a CRM solution plan to adopt one by 2026. The survey found that CRM solutions help save time, increase revenue, and improve decision-making capabilities.
Growth Optimism and Concerns
Despite economic uncertainties, 73% of MSMEs are optimistic about their growth in the next six months. However, they are concerned about economic uncertainty (54%), inflation (44%), and a shortage of skilled labor (33%).
Importance of MSMEs for National Growth
Sridhar Vembu, founder and CEO of Zoho Corporation, emphasized the vital role of MSMEs in the nation’s growth. He noted that many MSMEs remain underserved in terms of affordable digital solutions, and there is a need for feature-rich and accessible products to support their digital transformation.
The survey underscores the increasing focus of MSMEs on digital transformation and cloud adoption to enhance their operational efficiency and competitiveness. Addressing the digital adoption challenges and providing affordable, feature-rich solutions will be crucial for supporting the growth and success of MSMEs in India.
