Academic: Digitalisation of Business Management a Primary Need for MSMEs
The Head of Accounting Research and Development at the Faculty of Economics and Business (FEB) of Universitas Gadjah Mada (UGM), Haryono, stated that the digitalisation of business management has become a primary need for micro, small, and medium enterprises (MSMEs) amidst the rapid development of digital technology.
“Changes in consumer behaviour and increasingly tight business competition demand that MSMEs immediately adapt to technology if they want to survive and grow,” Haryono said in Yogyakarta on Wednesday.
He explained that the contribution of MSMEs to Indonesia’s Gross Domestic Product (GDP) has been around 60 percent in recent years, but this large contribution has not been matched by sound business governance.
Therefore, Haryono encouraged MSMEs to understand three terms that are often confused in everyday conversation: digitisation, digitalisation, and digital transformation.
“Digitisation is the simplest step, merely converting something physical into a digital form, such as turning a paper document into a PDF file,” he said.
Meanwhile, digitalisation involves using digital technology and data to create or improve business processes, for example through cloud computing and smarter supply chains. Digital transformation, on the other hand, touches on changes in activities, processes, and entire business models by utilising technologies like data analytics and artificial intelligence to boost efficiency and open new business opportunities.
According to him, the drivers for MSMEs to go digital include shifts in consumer behaviour, intense business competition, the need for operational efficiency, and opportunities for market expansion.
“The benefits are diverse, ranging from wider market access, reduced promotional costs, job creation, to greater export and import opportunities,” he noted.
To help overcome challenges such as a lack of digital literacy, high initial costs, and limited technological infrastructure, UGM’s Centre for Information Systems Studies has developed a web-based application called the Sidek-ERP Debit Credit System.
“This application assists with integrated business planning, simplifies financial data analysis, minimises the risk of recording errors, facilitates bookkeeping, and helps in preparing financial reports easily, quickly, and reliably,” Haryono concluded.