International Data Corporation (IDC) predicts that by 2026, at least 20% of SMBs will introduce metrics to track and effectively measure business value from their core business activities, their ecosystems, and their impact on the environment. This is one of IDC’s predictions unveiled in its latest report Worldwide Small and Medium-Sized Business and Digital-Native Business 2023 Predictions — India Implications.
Small and medium-sized businesses (SMBs) have survived pandemic shutdowns and supply chain disruptions by leveraging technology and providing their clients with online services through various digital channels. But with the rising inflationary impact, customers have become more cost-centric, pressuring SMBs and making it more challenging to achieve business resiliency. According to IDC’s 2022 Worldwide Future SMB survey, 46% of SMBs in APAC have significantly digitized their businesses by adopting eCommerce, digital payments, and automation technologies. Digitally matured SMBs across India are adopting technologies to future-proof their businesses against additional market disruptions.
On the other hand, Digital native businesses (DNBs) used their technology to differentiate themselves and survive during the pandemic. DNBs stepped in to fill the voids left by the pandemic lockdowns, which banned physical interactions. For example, telemedicine has flourished – enhancing and often substituting traditional healthcare. E-commerce also experienced a surge, benefitting the entire ecosystem, including its digitally enabled logistics partners. Online payment acceptance accelerated due to its ability to offer contactless and fast payment services.
“SMBs are the backbone of the Indian economy and are eager to adopt technology to achieve greater efficiency and flexibility. “They are increasingly investing in technology solutions to become more cost-efficient, improve customer acquisition and retention, and balance growth with quality. By adopting a more digital way of doing business, SMBs in India have tremendous potential to expand – leading to an increase in their market share,” says Supriya Deka, Senior Market Analyst for Digital Small and Medium-sized Business, IDC Asia/Pacific.
“DNBs in certain verticals and industries were able to prosper in the pandemic by implementing new technologies and setting themselves apart. However, the boom DNBs experienced in prior years has begun to slacken from its peak as pandemic restrictions lifted. DNBs must contend with challenges like access to funding and achieving sustainable expansion. DNB’s efforts now focus on efficiency and utilizing its digital infrastructure to bring the company closer to profitability,” says Sairam Balasubramani, Senior Market Analyst for Digital Native Business: Start-Ups and Scale-Ups research, IDC Asia/Pacific.
IDC’s seven SMB and three DNB technology and business trends for India provide guidance to SMBs and DNBs on how to become more agile, resilient, drive sustainability, and become the powerhouses driving the economy:
#1: Tech Savvy SMBs Drive Economy: By 2027, total budgets dedicated to IT investments and connectivity services at Indian SMBs will increase by 20% as SMBs turn to technology to compete with larger businesses.
#2: Redefining Business Value: By 2026, at least 20% of SMBs will introduce metrics to track and effectively measure business value from their core business activities, their ecosystems and their impact on the environment.
#3: Cloud Driven Agility: By 2024, 35% of SMBs will shift one third of their core workloads to the cloud to drive business agility and future resilience.
#4: Automation Amplified: By 2026, one third of SMBs will increase investments in automation and digital tools to make up for the shortage of workers, reduce manual processes and human error, and boost productivity.
#5: Live Commerce redefine customer experience: By 2023, 15% of SMBs will leverage live streaming technologies to launch new products and enhance the customer experience by facilitating easier product discovery and checkout.
#6: In-House IT: Over half of medium sized businesses will hire key technology decision makers by 2026 as they continue to invest in digital transformation and seek to have IT thought leadership on staff.
#7: The Intelligent SMB: By 2025, 30% of Indian SMBs will consider intelligence decision systems to promote R&D and supply chain management.
#8: The Future Economy is DNB Based: By 2027, the number of digital-native businesses of the S&P BSE 500 will have doubled, leading to a digitally driven economy.
#9: Value Trumps Speed: By 2025, 40% of Indian DNBs will shift focus from speed to market to demonstrable business outcomes to secure capital, boost differentiation, and achieve sustainable and resilient growth.
#10: Prediction 10: DNBs to Drive ESG Goals: By 2027, 35% of Indian venture funds will have implemented robust ESG criteria to qualify for investment.