How technology can transform MSMEs and start-ups into smart businesses

With the pandemic still looming resulting in an ever-evolving business scenario, the new ways of working for an entrepreneur need to be more streamlined.

The current economic crisis due to Covid-19 has affected nearly 70% start-ups and 50% MSMEs, resulting in several businesses shutting shops while forcing others to downsize. (Pixabay)

Micro, Small and Medium Enterprises (MSMEs) and start-ups play a key role in the economic development of the nation. The start-up ecosystem in India is the third largest in the world with an annual growth of 12-15% and MSMEs contribute to 30% of the total GDP growth. However, the current economic crisis due to Covid-19 has affected nearly 70% start-ups and 50% MSMEs, resulting in several businesses shutting shops while forcing others to downsize.

The government and large enterprises are taking various steps to support the sector by providing benefits through several schemes, launching newer technology products, extending offers on existing products and services for ease of adoption etc. However, assessing the ever - changing business landscape, adapting to the news ways of operating business in these testing times and complete understanding of current financial position remain critical for sustenance and business continuity.

Technology is the catalyst for driving operational efficiency

With the pandemic still looming resulting in an ever-evolving business scenario, the new ways of working for an entrepreneur need to be more streamlined. In the current situation, cash flow and working capital have seen the biggest hits. The right technology and the right business software can go a long way in overcoming these difficulties.

A business management software provides a complete overview of business operations allowing the business owner to take critical decisions and maintain a competitive edge. It helps manage complexities, bring stability, and enhance performance. It also assists through better relationships with suppliers and customers, better cash-flow management, a key aspect in the current situation and better stock control. It further provides ample insights and information for business owners to reflect on the business strategy and course correct to meet the current market expectations.

However, implementing any technology in the business is a strategic decision, as it involves multiple considerations from alignment of the technology to the business, investing in technology, data security etc. Hence, it is imperative to understand the key considerations before making this decision.

Picking the right Business Management Solution

Covid-19 has ensured digital transformation across sectors and segments and there is no shying away from adapting the right technology for survival. A business management software must ensure to enable, improve, and automate all business processes, minimize manual data entry, eliminate errors, report financial activities, and increase overall efficiency and effectiveness. The business owner must consider software that has features like resource management, accounting and inventory management, easily comprehensible financial reporting, project and task management, budget, invoice, and expense management and compliance management. Most importantly, such software should provide reports which are reliable and easily comprehensible, so that it allows the business owner to slice and dice it the way they want and act upon it easily.

Fundamentals for seamless adoption 

It is of paramount importance to understand that technology is leveraged to ease the business. A business owner must consider simple and easy to use software, so they do not need to spend time, effort and money for training and implementation. Each business has their unique way of working and flow of operations. Hence, technology must be flexible enough to adapt to the way of working of the business and not the other way round. Only then the real benefits of technology can be accrued.

Data security and privacy 

Security and privacy of financial data is an important consideration for businesses of any scale. Whether or not the data is on premise, it is of utmost importance that the data is secure and is available only to the business owner and personnel authorised by him/her. With more and more businesses choosing to adapt technology in daily business operations, they must be aware of the pros and cons, costs of hosting data on-premise or off-premise, before they choose to invest in the model which makes best sense for them.

Technology can be envisaged as a huge opportunity to drive stability and growth and there has not been a better time to leverage it to the fullest. Staying updated and implementing technology-driven processes for the business not only make it easier to operate in current times, but also help draw meaningful conclusions about business strategies and financial health, which aids in prolonged growth. Thus, the MSMEs and start-ups being an important pillar in India's growth strategy must adopt technology that will assist them to truly harness their potential.

This article has been written by Joyce Ray, Business Head- India, Tally Solutions