If MSMEs combine business acumen with efficient technology, they can optimise the use of their time, money and resources, and ensure rapid growth
India is a country of small businesses. Almost every lane and bylane in our country boasts of at least one micro-enterprise. India’s MSMEs are present in every sector; some are custodians of traditional crafts like handloom textiles and others are manufacturers of cutting-edge machine components, which ensure that India’s large businesses in sectors like automobile and aerospace run smoothly.
They are responsible for 31 per cent of India’s GDP and employ about 120 million Indians. However, it is disheartening to see that India’s MSMEs are losing out, as most are yet to adopt technology and run their businesses in a meaningful manner. According to a survey, only 5-6 per cent of MSMEs have fully adopted technology to run their business. If MSMEs enable their business acumen with efficient technology, they can optimise the use of their time, money and resources, and ensure rapid growth.
Here are the top myths about technology among MSMEs:
Myth 1 — Only large companies need tech: Every company, however small, can benefit from technology. The size of the business, number of employees, type of product or service, product and service verticals, and other such parameters will dictate the extent of tech requirement.
For instance, a microenterprise might only need bookkeeping software, beyond communication tools, while a small or mid-size company could need CRM and ERP tools as well. Technology can help streamline operations, bring in automation, even if at a basic level, and make the business more efficient, no matter what the size of the company is.
Myth 2 — Tech is an expense, not an investment: Companies mistake technology as an expense. This just isn’t true. If the right choice is made, tech is an investment with visible and trackable RoI (return on investment). The reason many small businesses consider tech as an expense or cost is because they have ended up using piecemeal tools from multiple vendors for various needs and the different software do not communicate with one another and they also do not scale with the company.
Software offered by tech-based B2B companies allows businesses to get access to end-to-end business process solutions that unlock new features when a business scales to the next stage of growth. Such software is a long-term investment. This shift in view — from expense to investment—will change the way small business owners make their tech decisions.
Myth 3 — Tech will replace humans: While some small business owners believe that they do not need tech, there is a set of other owners who believe tech will solve all their problems instantly and are disappointed when this is not the case. While the right tech tools can solve many challenges a business faces, human intervention, especially in decision making, will be required.
To give a simple example, a tech platform can help automate processes like bank reconciliation. The objective for the automation is to tally the statements maintained by the company and the bank, but human intervention is still required to fix the differences. The truth lies in the fact that tech can do a lot, but it still requires human inputs and supervision.
Myth 4 — Tech needs skilled staff: It is understandable that a layman gets intimidated by technology, as many equate tech with advanced tech tools. The point of Software-as-a-Service (SaaS) solutions is to keep the complex algorithms behind the ‘curtains’ and the user gets an easy-to-use, intuitive platform that does not require any specific technical training. Think of how you learn to use popular apps like WhatsApp. We discovered features on the go with simple prompts from the app.
SaaS tools offered by third-party platforms go a step further. For instance, a person with limited accounting knowledge can capture the financial data without understanding the accounting concepts like credit and debit and still generate the P&L statement. Good technology solutions that have been built keeping the end-user in mind does not require heavy technology training.
Myth 5 — Tech is a one-time affair: While SaaS has made tech implementation easy, it does not mean business owners can invest in one tech tool and then forget about it; since businesses are constantly growing and evolving, so are the needs of the enterprise. While, as a micro enterprise you might only need bookkeeping software, as you grow you will need to add on sales management, marketing and ERP tools.
However, it does make sense to invest in a solution that unlocks additional features as required. With the right platform, a micro enterprise can opt for a handful of features initially and as it scales more features can be added based on requirements.
Technology has made our lives easier, small businesses should also allow technology to make doing business easier.
The writer is Founder and CEO, Effitrac Solutions