By Veerendra Jamdade, CEO, Vritti Solutions
In the ever-evolving landscape of business, technology has emerged as the driving force for growth and transformation. Small establishments, including shops, agricultural agencies, hotels, petrol pumps, traders, and service providers, have been quick to embrace new tech-based business applications such as Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), accounting software, petrol pump management software, and agri-management software.
Small establishments are not merely adopting technology; they are also actively developing tech-based applications to enhance various aspects of their operations. From generating quotations and invoices to engaging customers, managing inventory, measuring employee work productivity, and sending collection reminders, these businesses are utilizing technology to optimize their processes. What’s more, this wave of technological innovation is even more prominent in Taluka, tier III towns, and rural areas.
This proactive approach to integrating technology has led to remarkable growth, with small businesses experiencing an impressive surge of upper double-digit growth in tech adoption every year since 2018, despite the COVID-19 factor.
However, the not-so-good news lies in the reluctance of small and mid-size industrial and manufacturing establishments to embrace technology with the same vigor as small establishments.
The factors contributing to this remarkable growth in tech adoption of small establishments are twofold. First, there is a growing trend of increasing GST adoption and compliance among small businesses. The simplified tax structure and efficient financial management offered by GST have encouraged these businesses to explore and adopt additional technology solutions.
The second factor is the expansion of the internet and data connectivity to tier III towns and rural areas. This increased accessibility to technology has bridged the digital divide, allowing businesses in previously underserved regions to access and utilize technology for their growth and success.
Small establishments are often founded and run by young entrepreneurs who are naturally tech-savvy and adaptive to technology. They have grown up in an era where technology is omnipresent and integral to daily life. This familiarity with technology has made it easier for them to integrate it into their businesses and leverage its advantages.
On the other hand, many leaders in the small and mid-sized industrial sector are in the age group of 50 and above. When they initially embarked on their careers in the core industry, the adoption of IT and technology in their companies was significantly lower. Technology was not as pervasive, and IT integration was often considered an unnecessary expense. For those who did attempt computerisation in the early 2000s, the experience was often disheartening. Small IT companies that provided software solutions during that period often faced challenges and many even disappeared. The owners of these companies, faced with the uncertainty and challenges of running a technology-based business, opted for well-paying jobs instead. This experience left a lasting impact on their perception of technology and its role in business operations.
Moreover, the proliferation of the internet and the rise of startups introduced a new paradigm. Many services and software were offered for free or at significantly reduced rates, fostering an expectation of inexpensive or cost-free technology solutions. This demotivated many software company owners from continuing in the business. The financial challenges associated with competing in a market with limited profitability hindered their enthusiasm for investing in technology.
Looking ahead to the next five years, the trend of technology-driven growth is expected to persist, primarily driven by small business establishments. The digital transformation is well underway and shows no sign of slowing down. Small businesses are poised to continue their growth and reap the benefits of technology adoption.