With some MSMEs now introducing new blood, a three-way tech generation gap can slow business agility or cause management disharmony

The Indian economy comprises predominantly micro- and small- and medium-sized enterprise (MSMEs) but a majority of such firms are still not ‘corporatized’ enough to capitalize on advanced technologies.

In most family businesses in India, IT adoption is divided across different generations. The first generation business owner still gets the work done on the old-fashioned telephone. The second generation enters and tries to implement modern devices to achieve basic automation, back-up and networking to sustain the business and even take it to the next level.

The third generation sees the success of start-ups and wants to go global even without complete knowledge of the business. While IT is very important, many young decision makers fail to understand that implementing IT without complete knowledge of the business is a key reason for the difference of opinion in the family business.

Generational tech gaps
The different perspectives of stakeholders in family businesses are hampering the organizational agility to decide quickly on adopting advanced technologies, said Jitesh Chauhan, MD, Rubik Infotech. “Generations play a key role in family businesses in India. Right now in many organizations, a grandfather, a son and a grandson handle various functions of a business. Even if the third generation, having a global exposure to the business, tries to implement a new policy or device, the first generation stops it, fearing it will impact the security of the organization,” Jitesh said. According to him, the level of cybersecurity awareness across the generations is nevertheless high, but it also stops the entire business from expanding. “Thus, most MSMEs decide to stay on-premises, unable to scale up,” Jitesh surmised.

When family businesses were run by only the first generation owners in the early days, automation adoption was easier, said Biren Shah, MD, Adit Microsys. “When the organizations were starting to adopt technology, everyone was taking baby steps on how to make their business automate. To be frank, those days, there was no IT department at all. The IT procurements use to happen quickly because there were no conflicts of interests and the founder himself/herself was the final authority in IT decision making.”

Old School vs New School

Jaydev Dudhia, MD, Netlogic noted that this generational tech gap is common in many family businesses in the country. “In most cases, the first two generations want every IT activity in front of their eyes. Thus, they are always conscious about having their data on-premises and never wanted to be on cloud. When the new generation decision maker adopts ‘data on cloud’, the actual problem starts”. Jaydev opined that businesses should leverage technology, but only if all generations can come to a consensus that the survival of the business demands a particular technology to be adopted, regardless of minority opinions. 

One businessman with rich experience in helping family businesses—Biren Selarka , MD, Acma Computers, noted that, “in many family-run businesses, the process of making a decision is often as important as the decision itself. Agreeing on a decision-making methodology that works, is essential for long-term success and stakeholder harmony. Balancing objectivity with speed in decision-making can be challenging, but when navigating uncertainty,” achieving that balance could make or break a business.