Journal of Community Engagement in Health https://jceh.
ISSN: 2620-3758 .
2620-3766 .
https://doi.
org/10.
30994/jceh.
Vol.
9 No.
1 March.
Page 1-10 Assistance in Digital-Based Health Economic Management to Improve Cost Efficiency of Herbal MSMEs in Kediri City Titin Susanti1*.
Syahril Wahyu Ramadhan2 Digital Business Study Program.
STRADA Indonesia University.
Indonesia *Corresponding author: titin@strada.
ABSTRACT
Herbal MSMEs play a vital role in supporting the public health economy, but they still face challenges in managing their businesses, particularly in financial recording and operational cost efficiency, due to low digital literacy in optimally utilizing technology.
This community service activity focuses on digital-based health economic management mentoring, aimed at improving skills in digitalized financial recording.
Mentoring was conducted on three MSMEs in Kediri City out of fifteen that have been operating for the past five years.
The pretest-posttest method, comparing the percentage values before and after mentoring through questionnaires, interviews, and observations, concluded that there was an increase in digital financial literacy, business cost control, and data-based economic decision-making.
This mentoring has an impact on increasing the operational cost efficiency of herbal MSMEs without compromising product quality and is an effective strategy in strengthening the independence and sustainability of herbal MSMEs.
Keywords : Cost Efficiency.
Community Service.
Digitalization Health Economy.
Herbal MSMEs Received Revised Accepted : February 05, 2026 : March 18, 2026 : March 31, 2026 This is an open-access article distributed under the terms of the Creative Commons AttributionShareAlike 4.
0 International License INTRODUCTION Micro.
Small, and Medium Enterprises (MSME.
play a strategic role in supporting the national economy and improving public welfare.
In this study.
MSMEs are defined as productive businesses owned by individuals or business entities, classified based on assets and annual turnover.
This variable is measured using indicators such as business scale, assets, turnover, number of employees, and length of operation.
MSMEs are highly influential and even the backbone of the Indonesian economy, from creating jobs to contributing to exports.
Despite obstacles such as limited access to financing, digitalization, regulations, and product innovation, the government is working to implement financing programs such as the People's Business Credit (KUR), business incubation, encouraging the use of digital technology, and providing business mentoring (Iwan Ardiansyah et al.
, 2.
MSMEs are one of the most important pillars of the Indonesian economy.
Data from the Directorate General of Treasury (DJP.
of the Ministry of Finance shows that the number of MSMEs currently reaches 64.
Journal of Community Engagement in Health https://jceh.
ISSN: 2620-3758 .
2620-3766 .
https://doi.
org/10.
30994/jceh.
Vol.
9 No.
1 March.
Page 1-10 million, contributing 61.
07% of GDP, or IDR 8,573.
89 trillion.
MSMEs' contribution to the Indonesian economy includes absorbing approximately 117 million workers, or 97% of the total workforce, and accumulating up to 60.
4% of total investment .
ata from the first semester of 2.
Various studies have shown that one of the main problems facing MSMEs in Indonesia is a weak business economic management system, the digital economy era has brought about a fundamental transformation for MSMEs to create a complex but potential business ecosystem (Hulu, 2.
(Lisa, 2.
revealed that most MSMEs still maintain simple, unstructured financial records, and tend to mix them with personal finances.
This condition makes it difficult for business owners to identify production costs, calculate profits accurately, and make datadriven economic decisions.
Consequently, business cost efficiency is low and has the potential to hinder MSMEs sustainability.
This problem is particularly complex for MSMEs operating in the health sector, including herbal MSMEs that produce various herbal products based on medicinal plants and natural ingredients for health, due to the unique characteristics of this sector related to health products, raw material safety, and the sustainability of production Increasing public awareness of a healthy lifestyle makes herbal products a significant market potential.
According to the (WHO, 2.
, inefficient health economic management can increase production costs and reduce the competitiveness of communitybased health products.
Efficient financial management is a vital aspect in supporting operational sustainability.
One approach that can support this effort is the implementation of an accurate and structured cost classification system (Dewi et al.
, 2.
Standard cost calculations play a very important role in controlling production activities, so that companies can plan and make production costs more efficient so that the resulting profits can be maximized (Magfirah B & Fitri, 2.
Herbal MSMEs that lack a sound cost control system tend to experience waste in raw materials, distribution, and packaging.
On the other hand, the development of digital technology provides significant opportunities for MSMEs to improve the efficiency and quality of business management.
Implementation of digital marketing can be a main pillar in developing business strategies in the era of digital transformation (Reggina Wike Anjani.
Digitizing financial management through simple recording applications and information systems has been shown to increase transparency, data accuracy, and speed of decision-making.
However, various studies also confirm that the adoption of digital technology by MSMEs still faces obstacles, particularly low digital literacy and a lack of ongoing mentoring.
The digitalization of MSMEs is an important foundation in driving social integration, increasing productivity, and sustainable economic change (Hidayat et al.
, 2.
The ability of MSMEs to manage their finances significantly impacts their business success.
Fund management is a major challenge faced by small and medium-sized enterprises (SME.
One issue often overlooked by MSMEs is financial management.
Financial management can be achieved through financial management, an orderly and systematic process for creating financial information used in decision-making (Onggo & Naufal, 2.
MSME owners believe that managing transaction data manually is not an obstacle, but the obstacle in managing transactions using a manual recording system is that it takes longer during the input process (Ningrum et al.
, 2.
, this means that MSMEs must improve good financial recording so that business financial management is more effective and efficient by utilizing increasingly developing technology.
(Ratnaningtyas.
Bilqis.
, & Swantari, 2.
MSMEs that rely on manual recording systems and have not separated business finances from household finances, making it difficult to determine cost efficiency and business profits Furthermore, digital technology has not yet been utilized in business management.
Journal of Community Engagement in Health https://jceh.
ISSN: 2620-3758 .
2620-3766 .
https://doi.
org/10.
30994/jceh.
Vol.
9 No.
1 March.
Page 1-10 This has resulted in high operational costs and low business efficiency, despite the significant market potential for herbal products in Kediri City.
Several community service studies emphasize that participatory mentoring based on the partners' real needs is an effective approach to encouraging behavioral change and capacity building in MSMEs (Hasan et al.
Mentoring focuses not only on knowledge transfer but also on direct assistance in technology implementation and ongoing evaluation of results.
Digital transformation is crucial for health MSMEs to improve business efficiency and sustainability.
A digital-based health economic approach enables MSMEs to systematically manage costs and support data-driven decision-making (Karim, 2.
Herbal and herbal medicine MSMEs (MSME.
are a traditional health sector that plays a strategic role in maintaining public health and supporting the local economy.
In Kediri City, herbal and herbal medicine MSMEs are developing as micro and small-scale businesses that provide a livelihood for the community.
Herbal products remain in demand because they are based on natural ingredients, are easily accessible, and contain local wisdom.
Based on initial observations and discussions with MSMEs, most partners still face challenges in understanding the concept of health economic management, particularly regarding production cost management, occupational health costs, and financial record keeping.
Based on these issues, community service activities are needed that focus on digitalbased health economic management assistance for herbal MSMEs in Kediri City.
An effective method of mentoring MSMEs is through the provision of materials and a simple digital bookkeeping application model.
Through this mentoring activity, it is hoped that MSMEs can improve their daily financial record-keeping skills to support the sustainability and development of their businesses, thereby increasing operational cost efficiency and achieving optimal profits.
METHOD
Approach and Activity Design This community service activity is a community engagement program based on participatory mentoring.
This approach positions MSMEs as active participants in every stage of the activity, from problem identification to evaluation of mentoring results.
This model was chosen because it is considered effective in encouraging behavioral change and sustainable capacity building among MSMEs (Sodiah et al.
, 2.
, where MSMEs play an active role in every stage of the activity.
Mentoring is not only in the form of training but also direct assistance in business management practices.
The design of the community service activity refers to a problem-solving model tailored to the real needs of herbal MSME partners, particularly in aspects of health economic management and the use of digital technology.
Location and Target of Activity The community service activity was carried out in Kediri City, primarily targeting herbal micro, small, and medium enterprises (MSME.
that produce and market natural-based Based on Decree Number 050/340/419.
106/2021, official data obtained from the Kediri City Cooperatives.
Micro Enterprises, and Manpower Office lists fifteen herbal medicine businesses in Kediri City that were established within the last five years.
This community service activity provided mentoring to three MSMEs operating in Kediri City, considering they had been operating for a considerable period of time and demonstrated stable growth in the Kediri City area.
The extension assistance instruments used are training modules, digital cost recording forms, and evaluation questionnaires.
Journal of Community Engagement in Health https://jceh.
ISSN: 2620-3758 .
2620-3766 .
https://doi.
org/10.
30994/jceh.
Vol.
9 No.
1 March.
Page 1-10 Stages of Activity Implementation The implementation of this community service activity is carried out through several systematic stages as follows:
Identification and Analysis of Needs The initial phase involved field observations, interviews, and focus group discussions with herbal MSMEs.
These activities aimed to identify key issues related to health economic management, financial record keeping, and MSMEs digital readiness.
Interviews were conducted to gather information on financial recording patterns, daily transaction flows, and challenges faced in financial management.
Observations were conducted to understand business operational processes and current transaction recording This approach aligns with MSME mentoring methods, which emphasize the importance of understanding partners' initial conditions before designing solutions (Toding, 2.
Socialization and Education of Health Economic Management At this stage, the community service team provided material on the basic concepts of MSMEs health economics, the importance of operational cost efficiency, and the impact of financial management on the sustainability of MSMEs management businesses.
Financial Management Digitalization Training MSMEs are trained to use a simple and easy-to-use digital financial accounting The training covers recording income and expenses, grouping costs, and preparing simple financial reports.
The team also developed a business process flowchart that illustrates the operational flow, from order receipt through production to transaction The flowchart aims to help partners systematically understand the workflow and serve as a guideline for their business operations (Hadayanti, 2.
Implementation of digital-based accounting through Android-based applications helps in recording accounting transactions.
It requires accounting knowledge that is understood by MSMEs and in the function of digital use (Saleh & Jumarding, 2.
Assistance in Using the System Direct assistance in implementing digital recording, cost control, and financial report Practice-based training methods have proven effective in improving digitalbased financial recording skills for MSMEs (Yuanita et al.
, 2.
Evaluation and Reflection of Activity Results The method used in this community service activity is the pretest-posttest method.
This method is an evaluation approach that measures changes by comparing conditions before and after mentoring.
The data collection instruments used in this community service activity are questionnaires, interviews, and observations, which complement each other in collecting accurate and comprehensive data to evaluate the effectiveness of the MSME mentoring program.
Data obtained from the pretest and posttest are analyzed by comparing the percentage value before and after mentoring to identify any improvements or changes as a result of the MSME mentoring program.
The success of the evaluation and monitoring of this assistance is carried out by analyzing changes in operational cost efficiency, increasing the ability of MSME actors to use digital applications such as the results of community service analysis (Sopanah et al.
, 2.
which explains that there are changes in partners' understanding and ability to record transactions and utilize financial information for future business evaluations.
Journal of Community Engagement in Health https://jceh.
ISSN: 2620-3758 .
2620-3766 .
https://doi.
org/10.
30994/jceh.
Vol.
9 No.
1 March.
Page 1-10 Observation and Interview Training and Evaluation Assistance Literacy Socialization and Education Figure 1.
Flow of mentoring implementation RESULTS The digital-based health economic management mentoring program ran smoothly and received a positive response from herbal MSMEs.
Initially, most partners admitted they lacked a structured financial recording system and didn't understand the concept of cost efficiency.
After participating in a series of outreach and training sessions.
MSMEs began to demonstrate an increased understanding of the importance of systematic business economic management.
Intensive, gradual mentoring helped partners overcome technical difficulties in using digital The hands-on approach proved effective in boosting MSMEs' confidence in implementing digital systems in their daily business activities.
This condition is in line with findings (Romadani.
ZW.
Astuti.
SY.
Febrianti, 2.
stating that most MSMEs experience obstacles in financial management due to unsystematic recording, which has an impact on the low quality of the financial information produced.
The evaluation results showed a significant increase in the digital literacy of MSMEs.
Most partners were able to independently operate digital financial recording applications, input transaction data, and read simple financial reports.
This condition aligns with the findings of (Iwan Ardiansyah et al.
, 2.
, who stated that ongoing mentoring is a key factor in the successful adoption of digital technology in MSMEs.
One of the main outcomes of this community service activity was the increased operational cost efficiency of herbal MSMEs.
Initial identification results indicated that most MSMEs lacked a structured cost recording Costs for raw materials, production, and occupational health were not consistently After training and mentoring.
MSMEs demonstrated an increased understanding of the concepts of fixed costs and variable costs, as well as the importance of healthcare cost efficiency in supporting business productivity.
MSMEs began using an easily accessible digital cost-recording system.
This system helps MSMEs regularly monitor expenses and income.
The results of this activity are in accordance with the results of research (Matana et al.
, 2.
which conducted counseling on good business management, digital marketing skills training, and intensive mentoring can help MSMEs overcome the challenges they face, such as digital financial management.
Table 1.
Operational Cost Efficiency of Herbal MSMEs Before and After Mentoring Cost Components Before mentoring (Rp/mont.
After mentoring (Rp/mont.
Improvement
(%)
Herbal Raw Material Costs Production Cost Occupational Health Costs Marketing Costs Other Operating Expenses Total Operational Costs Journal of Community Engagement in Health https://jceh.
ISSN: 2620-3758 .
2620-3766 .
https://doi.
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30994/jceh.
Vol.
9 No.
1 March.
Page 1-10 Source: Data on Herbal MSMEs in Kediri City 2025 The mentoring results showed a 13.
6% reduction in total operational costs for herbal MSMEs after implementing digital-based health economic management.
The most significant cost efficiencies occurred in occupational health costs and other operational costs, which had not previously been managed in a structured manner.
These results are in line with (Rozi et al.
those explaining that mentoring activities have a positive impact in empowering MSME actors and can be a model for similar programs in the future.
Digitizing cost recording helped MSMEs identify inefficient spending and supported data-driven business decision-making, enabling real-time expenditure monitoring and identification of unproductive cost items.
addition to impacting the financial aspect, this mentoring activity also strengthened MSMEs' health economic management.
Businesses are beginning to understand the importance of allocating costs to maintain product quality, healthy production processes, and business This aligns with the concept of health economics, which emphasizes efficient resource use to generate optimal benefits (WHO, 2.
Table 2.
Improving the Understanding of Herbal MSME Actors Before and After Mentoring Aspects of Understanding Pre-Test
Results (%) Understanding the Concept of Health
Economics for MSMEs
2 Identify Fixed and Variable Costs 3 Occupational Health Cost
Management 4 Digital-Based Cost Recording 5 Data-Driven Decision Making Average Source: Data on Herbal MSMEs in Kediri City 2025
Post-Test
Results (%) Improvement
(%)
The results of the pre-test and post-test evaluations showed a significant increase in the understanding of health economic management among herbal MSMEs.
The highest increase was in the aspect of digital-based cost recording, at 45%, indicating that mentoring and direct practice in using digital systems were effective in increasing MSME capacity.
This increased understanding forms the basis for changing MSME behavior in managing costs more efficiently and sustainably.
The results of this community service activity indicate that digitalbased health economic management mentoring is a relevant and effective strategy for improving the performance of herbal MSMEs.
The participatory approach allows for deeper knowledge transfer and encourages behavioral changes among business actors.
DISCUSSION
This community service mentoring program is designed to empower herbal MSMEs by strengthening their digital-based health economic management capacity.
The participatory mentoring approach implemented aligns with previous community service findings, which emphasize that behavioral change in MSMEs is more effectively achieved through active involvement and hands-on practice than through one-way training.
In this context.
MSMEs are not only recipients of training materials and mentoring, but also key actors in the learning process and the application of digital technology.
This community service mentoring program serves not only as a means of knowledge transfer but also as a strategy for empowering herbal MSMEs in Kediri City.
The participatory approach implemented allows partners to be actively Journal of Community Engagement in Health https://jceh.
ISSN: 2620-3758 .
2620-3766 .
https://doi.
org/10.
30994/jceh.
Vol.
9 No.
1 March.
Page 1-10 involved in every stage of the activity, from problem identification to evaluation of mentoring This aligns with the principle of community service, which emphasizes sustainability and partner independence as the program's primary objectives.
Prior to the mentoring program, most herbal MSMEs maintained traditional business management practices, particularly in financial record-keeping and cost control.
This resulted in them lacking a clear understanding of their business cost structure and potential efficiency gains.
Through ongoing mentoring.
MSMEs began to understand the importance of health economic management as a crucial component of their business sustainability.
Digital-based mentoring encourages MSMEs to shift from manual record-keeping to a more structured digital financial recording system.
This transformation is not only technical but also reflects a shift in MSMEs' perspectives on professional business management.
Implementing a digital system allows MSMEs to monitor cash flow in real time, identify dominant cost items, and evaluate the effectiveness of business expenditures.
In the context of health economics, better controlled cost management contributes to more effective and efficient resource use without compromising the quality of the herbal products produced.
The results of community service activities (Harto.
Rukmana.
Subekti.
Tahir.
Waty.
Situru.
, & Sepriano, 2.
indicate that digitalizing business management can improve MSME efficiency and accountability.
The implementation of a digital-based financial recording system is the main entry point for transforming the health economic management of herbal MSMEs.
Digital transformation enables businesses to consistently record transactions, categorize costs, and regularly monitor cash flow.
This reinforces the literature's view that the use of simple digital technologies by MSMEs can improve financial transparency and strengthen control over business costs, especially for small businesses that previously lacked formal management systems.
These changes are not only technical but also reflected in behavioral changes among MSMEs.
Improved digital literacy is evident in partners' ability to operate financial recording applications, read simple reports, and utilize this information to evaluate business performance.
Digitalization of financial records has also been shown to improve the efficiency and quality of financial information for MSMEs.
He explained that implementing digital financial records in MSMEs can accelerate data recapitulation, improve recording accuracy, and facilitate the storage of transaction archives (Saleh & Jumarding, 2.
, with good and legible financial bookkeeping, banks can assess future business prospects (Maryam, 2.
The tangible impact of these behavioral changes and increased digital literacy is reflected in the operational cost efficiency of herbal MSMEs.
A 13.
6% reduction in operational costs demonstrates that this mentoring program provides direct economic benefits to partners.
Cost efficiencies are primarily achieved through controlled raw material purchases, reduced unnecessary administrative costs, and improved distribution planning.
In the context of community service, this achievement serves as an important indicator that the program is not only educational but also has practical and measurable impacts.
CONCLUSION
Digital-based health economic management mentoring has improved the cost efficiency of herbal MSMEs in Kediri City.
This program supports business sustainability and enhances the competitiveness of traditional health-based MSMEs.
Community service activities, including digital-based health economic management mentoring for herbal MSMEs in Kediri City, have been well-implemented and have had a positive impact on partners.
The participatory and ongoing mentoring has improved the understanding and skills of MSMEs in Journal of Community Engagement in Health https://jceh.
ISSN: 2620-3758 .
2620-3766 .
https://doi.
org/10.
30994/jceh.
Vol.
9 No.
1 March.
Page 1-10 managing the economic aspects of their businesses in a more structured and efficient manner.
The results of the activity indicate that most herbal MSMEs experienced positive changes in their business management patterns.
MSMEs began to maintain a regular record of their finances, separate their personal and business finances, and utilize financial data as a basis for decision-making and policy-making.
This behavioural change is a key indicator of the success of the community service program, as it demonstrates MSMEs' increasing awareness of the importance of health economic management for business sustainability.
Digital-based mentoring has proven effective in helping partners control their business operational costs.
The cost efficiencies achieved after mentoring demonstrate that digitizing financial records can be a practical solution for herbal MSMEs to reduce waste and improve their economic performance.
This increased cost efficiency was achieved without compromising the quality of the herbal products, thus maintaining consumer trust and the health value of the products produced.
In addition to its economic impact, this community service activity also contributed to improving the digital literacy of herbal MSMEs.
Partners became more confident in using simple digital technologies to support their daily business This confidence is crucial as initial capital for MSMEs to adapt to technological developments and increasingly competitive market dynamics.
Overall, this community service activity demonstrates that digital-based health economic management mentoring is a relevant and applicable approach to supporting the capacity building of herbal MSMEs.
This program not only provides short-term benefits in the form of cost efficiency, but also builds the foundation for MSME independence and sustainability in the long term.
Based on the results of the implementation and achievements of this community service activity, for the implementation of digital-based health economic management to run consistently and sustainably, it is necessary to develop a simple and easyto-understand digital-based training module so that it can be integrated as an extension of the empowerment program to other MSME sectors that have health and food-based business characteristics, so that the benefits of mentoring can be felt by more MSME actors and become part of the strategy to strengthen herbal MSMEs in Kediri City.
Thus, this community service training activity is key to fostering awareness among MSMEs of the importance of financial reporting as a means of supporting financial management and accountability.
Furthermore, financial management serves as a means of providing information on how MSMEs perform their economic management to improve cost efficiency (Agus Tya Ningsih, 2.
Therefore, it is hoped that the results of this community service mentoring activity will benefit the general public of MSMEs in Kediri City.
REFERENCES