Operational efficiency overtakes expansion as top priority for 78% of Indian MSMEs: CMR

A recent study by CyberMedia Research reveals that nearly 80% of Indian micro, small, and medium enterprises (MSMEs) are now prioritizing operational efficiency over aggressive growth strategies. This trend emerges as these businesses grapple with rising costs, technological gaps, and an unpredictable market landscape. The survey indicates that 78% of MSMEs view operational efficiency as their primary business focus for the upcoming year, surpassing revenue growth at 71% and customer acquisition at 64%. This shift signals a notable change in the growth approach of smaller enterprises, with an increased emphasis on productivity, resource optimization, and resilience rather than solely pursuing expansion. "Operational efficiency has clearly become the dominant focus, reflecting a maturation in how businesses are seeking to grow," stated Prabhu Ram, Vice President of the Industry Research Group at CyberMedia Research. He noted that while revenue and customer acquisition remain important, many MSMEs are concentrating on long-term competitiveness and sustaining productivity amid uncertain conditions. Digital transformation and cost optimization are increasingly intertwined, with 58% of survey respondents highlighting digital initiatives as a key priority. Furthermore, 57% are focusing on optimizing costs, while 55% are exploring artificial intelligence as they prepare for the next stage of their digital journey. In addition, 52% of respondents are enhancing their cybersecurity measures, which demonstrates a balanced approach to technology adoption and operational risk management. However, the implementation of new technologies is not uniform across the sector. Many MSMEs face challenges such as budget limitations, a lack of skilled personnel, and uncertainty over the most suitable technology solutions. The study found that 26% of MSMEs pointed to insufficient internal digital expertise as a significant hurdle, while 20% struggled to identify appropriate technology solutions. Another 6% noted the absence of reliable advisory support. According to Sugandha Srivastava, Senior Analyst with the Industry Consulting Group at CyberMedia Research, these challenges underscore the importance of structured advisory support to help MSMEs transition from strategic planning to effective implementation. "The gaps in internal digital skills and the struggle to find the right technology highlight areas where guidance can add significant value," she concluded.