Digital literacy is the only way to grow and be part of the formal economy
It’s a universally acknowledged fact that MSMEs distrust technology. Experts believe that openness to technology in the MSME sector is more of a perception problem - many are simply not incentivised enough to embark on a journey to full-scale digital transformation.
It's critical to understand that technology enables MSMEs to overcome one of their biggest challenges - low productivity. In today's hyper-connected world, digital literacy is the only way to grow and become part of the formal economy.
IT needs to propel productivity may vary depending on the size of the enterprise and the sector it operates in. However, here are five technology capabilities MSMEs should invest in:
A. Data and Analytics - Every business, however small, generate massive amounts of data. Making sense of this data is essential to plan procurement, check inventory, receive purchase orders, mobilise production, handle logistics and payments and oversee distribution. MSMEs today have a plethora of data and analytics tools to drive these common-sense business functions, which big companies call Enterprise Resource Planning. Through a combination of predictive data and analytics and customised ERP tools, an MSME can achieve the same efficiency as a big enterprise - it can identify bottlenecks and leaks in the supply chain, predict and fix manufacturing errors, schedule payments, eliminate errors in accounting, and forecast demand.
B. Automation - We are far from a world where robots take overproduction in a small business, but this does not mean that MSMEs should be left behind in the race to Industry 4.0. Deploying low-cost automation solutions for specific processes can help MSMEs improve production outcomes, reduce delivery time and human dependence. Given the resistance to automation among the low-skilled workforce, particularly in supplier MSMEs, it is ideal to exercise caution while implementing automation - always proceed after successful pilot programmes. The benefits of automation can also be used as an opportunity to upskill the workforce in higher-order manufacturing processes.
C. Artificial Intelligence - Training a machine to think and talk like a human is a wonderful advantage for an MSME, where cultivating personal relationships are key to business success. Artificial Intelligence-driven Customer Relationship Management tools can propel high-quality lead generation, manage sales pipelines, automate marketing processes, track communication and integrate various sales and marketing functions to deliver intuitive customer service (think chatbots and customised delivery tracking emails). With the power of AI, you can free up your time, energy and money to focus on growing your core strengths, building new products or starting new services, rather than soothing an irate customer.
D. Cloud Computing - Dabbling in emerging technologies automatically requires investment to store data, which, until the rise of cloud computing, was an undeniable barrier for technology adoption. Cloud services are the digital infrastructure that links the MSME to the connected world. By migrating to the cloud (goodbye physical servers, CDs, pen drives and dusty paper files), MSMEs will enjoy the advantage of expanding their capabilities at an exponential pace - at a fraction of the cost.
E. IoT - When a three-year-old asks the virtual assistant at home to turn on the light in his room, he is making use of IoT, a technology that allows all manner of devices to connect to the internet through a variety of sensors. For a small business, this can prove tremendously advantageous; production can be scheduled and monitored remotely, accidents can be predicted and avoided, consumption of resources can be studied to avoid wastage - all in real-time.
Thus, contrary to what many believe, technology doesn’t make running cash strapped, labour starved small businesses difficult to run. It makes it easier, efficient and exciting to face the brave new world.