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The need for digitalization in SME sector is now becoming more necessary. This is because of the fact that most of the businesses today rely on the computer systems for smooth functioning. Computers have become the tool for smooth communication, transactions and data storage. With a high rate of data storage per CPU second, computers are fast becoming a must-have for every business.

But with the onslaught of technology in every sphere of life, there has been an equal rise in the demand for more digitalized versions of existing systems. In the case of SME sectors like marketing and advertising, the need for digitalization is now common. Sales, after all, form the bulk of activities for most of these enterprises. The biggest benefit of using the internet in these sectors is that there is greater scope for automation. And with automation, there is greater scope for reducing cost. This is the reason why the number of companies involved in selling and buying of goods has increased over the years.

So, what does this mean for the SME sector? It means that many SME-owned businesses are now looking forward to embrace the digitalization in the various sectors. This is because it is evident from the ongoing boom in e-commerce. The penetration of the internet into different parts of the Indian economy has been vastly increasing and as a result the number of businesses involved in these businesses have also seen a sharp increase.

The digitalization in SME sector gives SME-owned businesses greater options to expand their market share. There are more opportunities for them because of the increasing number of net-based businesses taking part in the Indian market. This sector can also be referred to as the third sector due to the fact that it is not directly related to the ‘real' sector. In fact, it is only the latest addition to the traditional and the mainstream business sectors. It is therefore not surprising that there is a growing demand for this in SME-owned businesses.

However, there is also a downside to this digitalization in the SME sector. This is because many of the new entrants to the Indian market are not aware of the different opportunities that the SME sector can provide. Hence, they often fail to apply the right strategies and make mistakes in selecting the right vendors or in developing the right products. The result is that these small enterprises usually fail to tap the maximum potential that the industry has to offer.

On the other hand, the disadvantages of the SME sector do not appear overnight. Instead, they accumulate over time. For instance, the disadvantages can appear in the form of deceleration of growth rates. Apart from this, there can also be an outright decline in the sales of certain segments of the industry. But, this is also accompanied by an overall rise in the overall popularity of the internet.

Digitalization in SME-owned businesses will therefore continue to occur as long as there is a market for online marketing and sales. Given the rapid rate at which this trend is developing, it is expected that this trend will continue for the foreseeable future. Given the current state of the economy, a slowdown will not come as a big surprise. As such, the focus of attention in the SME sector should therefore shift from what it will mean for the industry overall – creating more jobs and boosting the economy – to focusing on how it will impact the individual enterprise. This is because more of the small enterprises are finding their way into the online market.

The SME-own business sector will also continue to undergo restructuring because of these shifting dynamics. This is because there are better opportunities in other areas of the economy. Hence, entrepreneurs will continue to look for opportunities outside the traditional IT-BPO sector. These changes are however, bound to slow down, but not completely come to an end.

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