[India MSME Summit 2021] How the pandemic made SMBs see tech as an investment, not an expense
The pandemic has been challenging for most businesses, especially for the millions of micro, small and medium enterprises that were compelled to go digital.
While some did well to embrace technology to further their businesses, others are still in the process of identifying digital tools and IT solutions that are best-suited for them.
At the India MSME Summit 2021, a panel of business owners and IT solution providers discussed and deliberated on the changing digital landscape for SMBs and SMEs.
Ashish Sikka, Director of SMB and Channel, Lenovo India, said,
"None of us anticipated the impact of the pandemic. The year was divided into two halves for the SMBs: first, where they were grappling with the nature of the event, whether it was temporary or permanent, and second, when they adapted fast to the changing reality. SMBs realised that they might not return to the old normal and future business will continue to happen in the hybrid way."
"Most IT solutions are designed for very large enterprises. But, SMBs require a totally different solution. That is where Lenovo [and IT partners] comes in. We are looking at SMBs across 160+ countries and designing solutions ground-up for them," he added.
Panel at India MSME Summit 2021
While, in the first wave of the pandemic, most small businesses were fulfilling basic technology requirements like laptops and WiFi connections, in the second wave, their focus shifted to enabling seamless customer transactions and product delivery.
"Earlier, technology was looked at as an expense, now it is being looked as an investment. That is the biggest change that has happened in the last one year," Ashish adds.
So, what digital tools are small businesses tilting towards?
Alok Paul, Co-founder, Berrylush shares,
"Before the lockdown, we would operate mainly through emails and Google Sheets. But we were already in the process of digital transformation and were outsourcing a lot of the manufacturing. Today, we work with 14 different manufacturers. We started implementing SOS inventory — an application in Quickbooks that is used in apparel manufacturing. It took us two to three months to get the implementation in place. But, it was one of the most important things we did."
Besides Quickbooks, Berrylush has also integrated with G-Suite for communication, Shiprocket for logistics, Shopify for website sales, and 15-odd other tools and applications for inventory management, accounting, data analytics, demand forecasting, lead generation, and so on. The results are here to see.
"We have seen 700 percent business growth in the last one year. The tech stack has helped us scale our business really fast," says the founder.
Several small businesses have also gone through business model shifts in the last year. Okhai, which works with artisan groups and local craftsmen from remote parts of India, went from being a product company to an online marketplace.
Kirti Poonia - Head, Okhai, explained,
"At the start of the lockdown, we were working with 2,300 women, now we work with 24,000 artisans. It has been the biggest year for us; we have grown 67 percent in revenues. When the lockdown began, most artisans who were supplying to physical retail stores had their orders cancelled till November. There was a pile-up of inventory. Okhai was one of the organisations working in rural India to consolidate all the artisans and enable them to sell online."
"Not only were we generating sales for them, we were also generating goodwill for selflessly sharing our platform with competitors in another world. We are now representing 120 artisan groups, which work with local craftsmen and women."
Okhai also went on to invest in technology for its artisans, who now use the unicommerce platform to update their inventories. "Deliveries are being made directly from the remotest parts of India to Mumbai and New York," she adds.
While the business benefits of digital tools have been well established in the last 15 months, many SMBs struggle with decision-making. These are very small companies that don't have in-house IT teams or even knowledgeable founders.
Delhi-based Business & Networking Club (BANC) steps in to help these businesses.
"Most SMBs may not have heard of the tools that startups use. As a community, we hold sessions with different industries to show them how technology is changing the lives of people across the globe. If they understand the power of tech, they are more likely to adapt," Jaspreet Dhingra, Founder and CEO, BANC, stated.
The panellists reckoned that as India gears up for the third wave, it would be pragmatic for businesses to become crisis-ready by building alternate tech stacks, identifying core functions, and reducing dependency on founders/owners.