SMALL BUSINESS AND TECHNOLOGY: CAN THE TWAIN EVER MEET?
Small businesses (MSMEs in India) are supposed to be the growth engines of the Indian economy, but repeated assaults by Covid-19 are bringing most of them down to their knees. Apart from dwindling finances and mounting debts, one of the critical issues they have been grappling with is their inability to adapt to the new behavior protocols imposed by the pandemic.
Small businesses (MSMEs in India) are supposed to be the growth engines of the Indian economy, but repeated assaults by Covid-19 are bringing most of them down to their knees. Apart from dwindling finances and mounting debts, one of the critical issues they have been grappling with is their inability to adapt to the new behavior protocols imposed by the pandemic. In such a scenario, digitization sounds like the obvious and imminent savior, a decision that most MSMEs have debated, discussed and delayed.
This dire need facilitated a significant shift in the approach to tech implementation. According to a CRISIL survey, “About 29% of the MSMEs surveyed relied on digital sales channels such as online aggregators/market places, social media, and mobile marketing before the pandemic struck. However, that number has shot up to 53% among small enterprises and 47% among micro-enterprises as of November 2020.”
As cited in a study from Zinnov, “From an estimated $30 billion in 2019, the market size rising from digital technology adoption among MSMEs will grow at around 25% CAGR to around $85 billion in 2024.”
Another survey conducted by the India SME forum, which interviewed 129,537 MSMEs, states that only 34% of Indian MSMEs adopt digital means to interact with employees, customers and suppliers. In terms of full adoption, the figure dropped drastically to only 7%.
What are we missing here?
Technology influences everything we do; we all know what a life-changing experience it can be! So what makes businesses shy away from it then? Conversations I had with several Indian entrepreneurs shed light on some barriers to technology adoption.
1. Not Enough Knowledge To Make Confident Decisions
Most businesses lack a tech-qualified resource on their payrolls. Therefore, the first challenge becomes identifying the right person to manage tech and identifying the right partners. Who best qualifies — someone with a macro or a micro perspective on technology? Someone adept at the strategy or with a killer execution focus? Then comes the challenge of identifying the right implementation partners, which is an essential issue because:
• Tech Solutions Come Loaded With Disclaimers: If you think the world of finance is befuddling, welcome to the world of technology. There are multiple options for everything and multiple disclaimers for every one of them.
• Everything Is Coded In Tech Speak: The tech world ails from the “know-it-all ‘boys club'” syndrome; everyone in tech believes everybody knows tech, leaving the entrepreneur running to Google to decode the jargon. Words like big data and big query, for example, are bandied around without clear explanations on what the business needs and why.
2. Transitioning From Offline To Online
Shifting the focus from everyday business to migrate it online is both challenging and time-consuming. So how do you ready the organization and its people and consumers (especially in categories where the service is predominantly offline)? Several entrepreneurs from the creative skills space I spoke with faced this challenge. For instance, music classes are traditionally best-delivered face-to-face; getting both teachers and students ready to adopt online technology was difficult within the short time frame. So how does an organization build a tech-friendly system that serves both — the service provider (teacher) and the receiver (student)?
3. When Time And Money Are Scarce
Unlike large businesses, MSMEs do not have the deep pockets needed to make quick decisions and fail fast (so says the famous “unicorn” dictum). In addition, most MSMEs are typically owner-dependent, making allocating time to drive technology while also focusing on business a big challenge.
4. Inability To Evaluate The Effectiveness Of Solutions Recommended
There is no step-by-step guide or source which can help handhold MSMEs through their tech implementation journey. The fledgling entrepreneur’s journey is fraught with decisions that may need to be revisited continuously, tech expenses that cannot be reversed, solutions that are not optimal to the business’s growth plans and other challenges.
5. Digital Marketing And Measurement
Every entrepreneur is aware of the power of digital marketing as a means to grow their businesses. However, most digital marketing agencies are still testing the waters, making learning the game expensive for MSMEs.
The reality is that every MSME knows that they need tech to enable growth, and yet, seemingly, the enabler is their most significant barrier. So the question then is: Can we simplify tech implementation the way Amazon has simplified shopping?
Here are a few suggestions for tech enablers that may help bridge the gap.
• Identify the key areas that will simplify MSMEs’ lives, from something as simple as taking the business online with a website to integrating e-commerce solutions, payment gateways, digital marketing and more.
• Partner with MSMEs to overcome their challenge of building a UI/UX, help them adopt the entire user journey and migrate it from offline to online.
• Create a step-by-step guide for MSMEs to simplify tech adoption and design the basis and need for existing capabilities. Is the MSME a beginner with tech, or is it in an advanced space of knowledge?
Can tech as an industry develop measurement metrics that rank companies on their ability to help MSMEs scale?
While I have taken an India lens on the topic, I am quite certain that this is an issue with small businesses everywhere — affordable and appropriate tech with skills to match is hard to find.
The need of the hour is for tech companies to act as enablers for MSMEs by removing hurdles in implementing technological tools and increasing awareness of the benefits of using these tools while ensuring last-mile support for the end-user. Tech should really be as basic as setting up your new Android or iPhone — simple and intuitive.
Disclaimer – This article was 1st published on Forbes.com