Small and Medium Businesses (SMBs) are a critical segment of the Indian economy as they contribute nearly a third of the GDP and generate employment for millions. In the past few months, however, this segment of enterprises has been among the hardest hit by the economic crisis, triggered by the pandemic. Ensuring business continuity has been a critical challenge, especially for traditional SMBs in mini-metros and smaller towns. Nevertheless, faster adoption of digital technologies is helping SMBs to become resilient in the face of the ongoing adversity.
To gain insights on how digitally enabled SMBs were better equipped to maintain business continuity during the lockdowns and to garner insights on the best way forward for this crucial segment of the economy, Forbes India launched a tweetathon in association with Microsoft India, themed ‘Building Business Resilience for a Digital Future’, on September 30, between 5pm and 6pm.
The discussion was held completely on the Twitter platform, with the participants sharing their views on issues raised and moderated by the Forbes India team. The participants, including Suhail Zaidi, Head at CII Centre for Digital Transformation; Praveen Bhadada, Partner & Global Practice Head - Digital Transformation, Zinnov; Harish Vellat, SMB Corporate Business Leader, Microsoft; Prashanth Subramanian, Co-Founder, Quadrasystems.net and Prabhu Dhamodharan, Convenor, Indian Texpreneurs Federation, shared their perceptions on various themes related to SMBs and the impetus these enterprises receive from digitalization.
Technology for Business Continuity and Growth
There was a clear consensus that companies who had robust digital systems in place were able to ensure business continuity and recover quickly. As virtual collaboration became a necessity to maintain business continuity, those companies with a strong technology backbone were able to stay afloat by staying connected with their supplier and distributor networks, employees and customers during the lockdown.
Those SMBs with access to analytics were on a stronger footing as they were able to monitor changing customer preferences, based on which they could undertake important strategic decisions. Even before the crisis struck, companies with foresight had begun leveraging the huge volumes of data that they were generating, using emerging data analytics technology to forecast sales and facilitate cross-selling, designing, manufacturing, and business segmentation.
In a sense, the crisis has highlighted the importance of digital tools for SMBs, as it delineated the companies that had embraced technology, from those that had not. For some time now, SMBs have been increasingly facing the risk of customer erosion and changing customer behaviour. It has been the rapid adoption of technology that has been a key factor in protecting and expanding their businesses, by enabling efficiencies and speed to market.
360-degree tech enablers
There are essentially four business areas where technology is helping SMBs – 1) Cloud-based remote working tools 2) Aggregator listings, e-commerce storefronts and backward logistics integration 3) Automation to gain prominence and 4) Rapid uptake of digital payment methods. The momentum towards tech investment is already gaining on multiple fronts, with SMBs seeking small levels of automation to improve process efficiency and reduce wastage in manufacturing as their top priority now.
Further, enterprises, which are omni-present across the country with physical offices, need to expand their presence online, through different channels. As small businesses adapt to the challenges of 2020, they are going to need flexible and responsive infrastructures that provide scalability and agility.
Changing technology consumption models
The hesitance to adopt technology stems from the perception that it may put pressure on the limited financial resources of SMBs, which have to be stretched across a range of verticals. Fortunately, new models of technology consumption are emerging to accommodate these concerns. Beyond partnerships and variable subscription models, rather than capital investment, solution providers are now beginning to offer outcome-based pricing models. They propose a revenue sharing concept with SMBs by relating pricing to KPI improvements after implementation. In addition, some automation providers and banks even offered an EMI option for member companies.
These models have culminated in a drastic drop in the cost of solutions like cloud storage, collaboration tools, analytics, etc. Variable cost models address multiple SMB challenges in running their operations seamlessly by providing access to secure and scalable remote working solutions, easy access to customers and a lot more.
This being so, the time is right for SMBs to seize the opportunity to go beyond investing in basic solutions and accelerate the adoption of platforms that integrate their workflows with AI, security, and always-on connectivity.
Going global with cloud-based solutions
The overriding aspiration for most SMBs is to move up the value chain. With the help of technology infrastructure that empowers entrepreneurs and their employees to collaborate, innovate and deliver, the dream of even going global gains better visibility.
Going global means being held to far higher standards across everything – responsiveness, customer service, product quality and business processes, to name a few. A cloud-based digital backbone is the pivot which facilitates better outcomes from core competency. By harnessing the power of the cloud, SMBs can benefit from cost savings, improved security and ease of access to documents and applications – while working remotely - from multiple locations.
With the cloud, SMBs have access to Fortune500-class infrastructure for even single digit employee bases. Adoption of the cloud also enables them to run agile business processes, connect to larger entities, such as customers and suppliers, reach out to global customers, optimize cash flows, help capture new growth opportunities and transform in real time. As solution providers are now offering outcome-based pricing models, SMBs can gain resilience and scalability, while retaining control over budgets.
As organizations move to the cloud, the greatest concern is perhaps for the safety of data and applications and their compliance with regulations and policies. Cybersecurity is a particularly challenging area right now for SMBs, with threats like phishing is skyrocketing over the past several months, making businesses susceptible to attacks.
As a very basic prerequisite, cloud service providers have been investing heavily in cybersecurity to strengthen the security fabric of their solutions. For instance, with Microsoft 365, businesses can set-up a secure infrastructure that enables them to collaborate, communicate and share flexibly from anywhere anytime, manage user permissions, store their content online and leverage built-in AI tools to enhance efficiency.
Bottomline for SMBs
All in all, COVID-19 has massively accelerated digital transformation. Of course, it has also disrupted many businesses. The question is, which side of the coin should SMBs focus on? Disruption or Opportunity? Interestingly, cloud enables SMBs to capture opportunity while making them resilient to disruption.
The current crisis has provided SMBs with the perfect timing and opportunity for tech transformation as global buyers are looking to India as an alternative for credible supplies of intermediate and finished goods.
In conclusion, Harish Vellat, who leads the SMB Corporate Business at Microsoft, tweeted, “Businesses that have advanced with technology have managed to stay productive in a secure environment through remote working and collaboration. I see a stronger role for technology in building resilience across the SMB space as we continue to reimagine the way forward.”
Disclaimer: The views, suggestions and opinions expressed here are the sole responsibility of the experts. No Forbes India journalist was involved in the writing and production of this article.