This document discusses how digitalization and emerging technologies can help small and medium enterprises (SMEs) increase revenues, access wider customer bases, and achieve operational efficiencies. It provides examples of how technologies like data analytics, cloud computing, and e-commerce have allowed SMEs to grow. A case study from Denmark is presented on a company called Techno-Matic that developed an Internet of Things platform for its hydraulic products in order to remain competitive in the future. The key lessons highlighted are taking a gradual, step-by-step approach to technological changes and seeking outside expertise to help break out of existing mindsets.

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The Next Wave of SMEs Breathe Digitalization
Digitally empowered SMEs are able to increase revenue, lower
risks, decrease cost and diversify consumer segments over a
short period of time as compared to offline businesses.
Technological solutions such as Data Analytics, cloud-based
platforms and ERP systems will shape a company’s strategy and
growth enabling it to extract more insightful information for
informed decision making.
Today, let us see the impact of Digitalization in the SME
ecosystem.
 Increase in revenues
Upgrading digital technology and having an online presence can
provide significant opportunities for SMEs to grow and increase
their top line. Engagement through a company website or shifting

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to an e-commerce platform can increase sales by allowing SMEs
to access new customers in local and overseas markets. It also
allows flexibilities of time, geographical location and delivery to
conduct business. A study by Snapdeal titled “Impact of e-
commerce on SMEs in India”, states that an enterprise can
potentially improve its revenues by about 51%, thus, today, the
growth of SMEs is driven by eCommerce. The study also states
that 46% of the SMEs have witnessed a significant growth by
adopting an online sales channel. Diversified customers also help
divide business risk across different locations.
 Accessibility to wider customer base
Increased digital engagements allow SMEs to explore new
markets, enabling them to compete with the bigger giants in the
industry. E-commerce has provided cost-effective solutions for
the companies in large cities and rural areas alike to connect and
trade with customers around the world. SMEs can often lack the
skills to enter international markets due to limited knowledge,
language barriers, and unfamiliarity with cultural differences and
narrow business outlook.
E-commerce platforms outspread geographical boundaries,
engage in improving customer experience and provide support for
better supply chain solutions.
 Operational efficiencies
Access to e-commerce platforms allow SMEs to decrease overall
expenditure by optimizing operational and marketing costs like
call centers, trade shows, and individual product advertising. The
study by Snapdeal found that SMEs can optimize marketing
spend by 60% to 80% of the total cost. IT-driven smart

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manufacturing tools/ techniques such as Digital Integrated
Production Planning, Shop Floor Control, Supply Chain Solutions,
Cloud-based ERP could make SMEs more competitive in the
current environment.
Main causes for low adoption in the past:
 Lack of understanding of business benefits technology can
deliver across end-to-end value chains
 Lack of guidance on the inherent abilities of technologies
and how these can be integrated and institutionalized in
their businesses
 Resistance to incurring upfront investment-related costs to
implement technology
 Lack of skilled manpower to manage technology setups
According to NASSCOM, the estimated market growth driven by
SMAC is expected to be 30% (US$1 trillion) by 2020.

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Key drivers escalating adoption today:
In India, the impetus for adopting Social, Mobile, Analytics, and
Cloud (SMAC) has been facilitated by the following factors:
 The exponential growth in adoption of smart devices to
enable easy access to 3G or 4G networks
 The increased popularity of social media
 Rapidly increasing volumes of data being captured by
businesses across customer touch-points
 Advancement made in analytic tools and technology that
is helping to bring analytics closer to business users
 Cloud enabling businesses to deploy mobility and analytic
solutions in a cost-effective manner and reducing time-to-
market
Digital transformation: how SMEs can leverage this wave
of technology?
SMEs will thrive if key enablers powered by SMAC technologies
are created in integrated ecosystems to support their following
needs:
 Accessibility of expert knowledge and best practices
 Financial independence and risk mitigation
 Targeted marketing reach and sales
 Operational excellence across locations
 Efficient provisioning of services
 Real time insights and decision-making

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We bring you a Case Study straight from Denmark
highlighting the importance of Digitalization
Company Name: Techno-Matic
Country: Denmark
 Preparing for the Internet of Things
Techno-Matic is a Danish company with 20 employees offering
Hydraulic solutions for Danish and international customers. The
management of Techno-Matic felt a pressing need for a change in
its technological capability to be able to develop future products.
The products needed to be ready for meeting customers need
related to the Internet of Things (IoT), and Big Data.
Management therefore approached Aalborg University for
expertise and advice.
For a long time Techno-Matic had a competitive advantage due to
its strong capabilities in hydraulic. They can be used on many

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sources including for example trucks, large vehicles in the forest
industry or in agriculture. To secure its future long-term
competitiveness, Techno-Matic decided to move its offerings and
products into the IoT space. Using its network and existing
contacts to Aalborg University, Techno-Matic came in touch with
the MatchMaker at Institute for Computer Science.
 Nature of the intervention: Brand new platform for
IoT
Through several meetings with the matchmaker, Techno-Matic
defined a new value proposition for its future business that would
be based on IoT. This led to the upgrading of the company’s
products with a new platform of software and hardware. Further,
the company needed to equip the products with a digital
communication platform and to develop the company staff’s
digital qualifications. This would ensure that Techno-Matic was
able to deal with Big Data analysis. This led to a dialogue on the
way forward involving both the R&D group as well as the
management of the board. Techno-Matic has now developed a
prototype of the communication module which is tested with
customers.
 Outcome: A new mindset
The main intervention from the matchmaker was to develop the
Company’s Products and Services with embedded systems for IoT
and Big Data.
 Lesson learnt: Small step method
A main learning is that the technological change can be
accomplished with the small steps method even though the task
up front seems overwhelming. This applies both internally and in

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the involvement of customers, who also has a learning curve
ahead of them when it comes to IoT. Another important learning
is to deliberately seek for outside input to help you to break out
of your present mindset and changes in your technological path.
SMEs in India need to inculcate a scientific focus and an approach
that benefits both the company and the client.
(References: Mazar, digitalsme.eu)