- The Zinnov Cisco study has highlighted digitization as key for Indian SMBs to chart a course to recovery
- Indian SMBs contribute 30 per cent to the country’s GDP and employ more than 130 million people
The government, technology companies, and small and medium businesses (SMBs) need to work together to accelerate recovery of SMBs post COVID-19. A recent study titled ‘Indian SMBs: On the Road to Recovery from COVID-19’ notes that while all SMB verticals have been impacted by COVID-19, the impact has not been evenly distributed. This study was done by Zinnov and Cisco jointly.
“India has a massive base of 75 million SMBs, contributing around 30 per cent to the country’s GDP and employing nearly 130 million people. COVID-19 has pushed the majority of these SMBs into survival mode. While the government’s newly announced measures including the stimulus packages aimed at SMBs offer a much-needed boost to them to restart their operations, SMBs also need to be agile to embrace the new normal, which includes a strong digital foundation,” stated Praveen Bhadada, managing partner, Emerging Tech & Private Equity, Zinnov.
Adopting technology solutions can make SMBs disaster-proof
The equity support that the government has announced should be invested by the SMBs in buying new inventory as well as adopting technology solutions to make them disaster-proof. The recently announced government benefits could help SMBs accelerate their digital transformation, and with the definition of ‘SMB’ being revised, more businesses will be able to avail those benefits, which would also provide impetus for micro-businesses to grow.
The study also notes that manufacturing SMBs could look at sourcing raw materials locally to overcome supply chain challenges and use technology to streamline their supply chain operations. Retail SMBs can use mobile applications to accept orders and leverage hyper-local logistics players to offer doorstep delivery. With social distancing norms still in place, services SMBs should increasingly leverage ‘at home’ services wherever possible, with other necessary precautions in place like wearing a mask, sanitizing hands and frequently touched surfaces, etc. One major initiative that is gaining traction across the board is the need for contactless payment options.
“With the new stay-at-home economy emerging, digitally-enabled SMBs will be better placed to service customers. Pervasive broadband connectivity and uptake of digital technologies will fuel this new economy. Technology will play an important role in helping small businesses acquire customers, enhance service, experience, and efficiency, optimize supply chains, and grow beyond local boundaries to state, national, and international markets,” noted Sameer Garde, president, Cisco India, and SAARC.
Need to adopt digital technologies
The study further highlights that mitigating the worst of the COVID-19 impact depends on the SMBs’ willingness to disrupt themselves, and those who do will emerge stronger on the other side. SMBs across verticals need to adopt digital technologies such as Cloud, Internet of Things (IoT), Automation, etc., to enhance resilience and future-proof their businesses.
SMBs also need to leverage digital technologies to facilitate discoverability through online presence and digital storefronts, keep customers updated through regular digital updates, and increase efficiency by adopting Cloud and Automation-based solutions for common horizontal functions such as Finance & Accounting, Payroll, etc.
“They need to be more customer-focused and should leverage digital technology solutions such as Online Appointment Scheduler, CRM, Collaboration Applications, Accounting/Billing Applications, accept Digital Payments, and automate repeatable tasks. Overall, the concerted efforts by the government, technology providers, and SMBs can help SMBs combat and lessen the impact of COVID-19,” added Bhadada.
It is to be noted here that the manufacturing sector has been affected deeply, with plants and factories shut down for those SMBs that do not manufacture essential goods. Even as things start edging towards normalcy, given the impact to the supply chain and the social distancing norms, this segment is still far from recovery, let alone growth.