Studies are still being done on the impact of the COVID-19 pandemic on business. One glaring effect has been the influence of technology on the way business is done.
Many firms have adopted digital modalities for convening meetings, procuring services, marketing their products, and servicing the needs of customers. Consumers, too, enjoy the ease of paying bills, placing orders for a variety of products and services, and accessing information on goods and services online. Despite these developments post-pandemic, data suggest that small firms are still hesitant to use technology in their businesses.
The European Business Magazine in its February 2024 edition posited that small businesses are generally the ones who stand to gain the most from implementing new technology. Benefits include a decrease in expenses, boosting competitiveness, and savings on labour costs – all of which are significant bottlenecks experienced by small firms.
These businesses, however, lack the resources to make a proactive change because of their tight budgets. Whereas being at the forefront of technology is important, for small businesses it is not always possible.
Many businesses still struggle to make their operations sufficiently environmentally friendly, even now when technology is making sustainability more accessible. This additional expense frequently acts as a deterrent to affordability.
Adopting new technology can be a costly affair.
Implementing new technology or switching to a new system is usually quite costly. Additionally, the costs of training and adjusting the employees to efficiently use the new system can be prohibitive. The primary cause of small businesses’ slower adoption of new technologies is their inability to pay for them. They cannot afford to migrate, to take any chances, and they cannot afford to hire more workers for this job.
The benefits to be had for adoption cannot be easily disputed. Ishaque Valasseri (2022) cites the top benefits of technology for Small Business Owners:
• Operational Efficiency
• Enhanced Productivity with Automation
• Better Storage Solutions with Data Security
• Maintaining Future Readiness
• Improving Customer Experiences
• Cutting Costs and Increased Efficiency
• Digital Transformation
One sure way for small businesses to be resilient and sustainable is to adopt the appropriate technology. Yet, 80 per cent of these businesses do not make the most of the technology available.
Further research in 2021, by One Step Study, of more than 4 200 small business owners and decision makers in six countries, namely Australia, Canada, New Zealand, Singapore, the United Kingdom, and the United States, measured the perceptions and beliefs of small businesses relating to technology adoption.
The 12 key behavioural barriers involved in the decision-making process are:
1. Resistance to change – some business owners do not want things to change, even if this is a good thing.
2. Sunk costs – since they have already invested in their current solutions, the view is that the time, effort and resources expended would go to waste if a change is made.
3. Hassle factor – taking on new technology and the effort it takes can be seen as a hassle.
4. Satisficing – If they believe their current technology is working fine, they will not see a need for a new one.
5. Stuck in the present – although the long-term benefits of technology are evident, small business owners have more pressing matters to deal with and they cannot get past the up-front costs.
6. Seeing losses, not gains – the focus is solely on the length of time, and resources required to research and implement this new technology.
7. Avoid decision regret – small business owners worry if they are making the wrong decision and if this new technology could be bad for business in the end.
8. Only seeing known risk – small businesses are unable to bear the risks associated with change.
9. Ambiguity, uncertainty – there is a great deal of uncertainty regarding what will happen.
10. Relative judgement – there is also uncertainty with how to weigh the options and determine what is best for the business.
11. Information avoidance – there is so much information available that it becomes too much to handle and as a result it is avoided completely.
12. Choice paralysis – All of the choices become overwhelming.
FutureCIO Editors (2021) opined that the research further revealed that even after the pandemic forced businesses to implement digital solutions, only one in five small businesses consider themselves to be technology adopters, compared to nearly one in three who acknowledge they consistently put off investing in new technology. This is despite the significant and well-documented benefits of technology adoption.
According to the research, an “adoption gap” results from the behavioural barriers, including attitudes and beliefs about technology and change that are commonly held by small businesses worldwide.
These business owners think that despite the possibility of improved performance from new technology, their current solutions are adequate. When contemplating a shift, they concentrate on the threats and immediate losses. They find it difficult to deal with the large number of technological options to choose from, compare and comprehend.
Chief Customer Officer at Xero, Rachael Powell, proffered that deeper anxiety and concern about how complicated and expensive the change process might be are the biggest obstacles for small businesses when it comes to utilising the benefits of technology, rather than a lack of knowledge or options.
Although small business owners may be aware of the advantages, they are not implementing technology because the thought of doing so makes them feel extremely uneasy and even threatened.
The Small Business Association of Barbados (SBA) is the island’s non-profit representative body for micro, small and medium enterprises (MSMEs). Connect with the SBA: https://www.sba.bb/sba/
