3 Ways Family Businesses Can Start Going Digital in Asia
It is pretty common to find little mom-and-pop stores and restaurants sprinkled around big cities in Asia. Asia has a long established tradition in family businesses, some of which have sprung up to be conglomerate businesses in the region. Although they adopt a lot of mainstream business practices, the business model followed by traditional family businesses also has its own unique characteristics. Regardless of their size, family businesses in Asia contribute a significant portion to the region’s GDP. It is projected that by 2025, around 40% of the world’s big businesses will be family/founder controlled from emerging markets. Despite this, family businesses face a number of challenges that again are unique to the family business model in Asia. With advancements in technology and proliferation of the digital economy globally, it is not uncommon to find a struggle between the older generation and millennials over how best to adapt to these changes. This can discourage a lot of young would be heirs to family businesses from continuing the legacy of their family-owned enterprises, as they realize that these changes are too transformational to be ignored. However, there are some ways family businesses can get started in digitizing parts of their businesses.
Invest in Basic Digital Technology
Smaller family businesses may find it overwhelming when considering the pace at which other businesses are becoming more digitized. Younger generations of family enterprises may also struggle to convince their elders to adopt some of the latest technology that could ultimately contribute to their business growth. One way to introduce older generation skeptics to newer digital business models is to start with something small. It could be adopting a digitized accounting system, client-emailing system, utilizing a social media platform to better engage with customers, or simply setting up a website presence. Once those have been “mastered”, more advanced technology can be explored like utilizing apps, setting up an online sales platform, digitizing business operations, etc. The key is to identify the core strength of the existing business model and then find the appropriate technology to preserve that strength in a changing environment – enhancing rather than devaluing the work of previous generations.
Hire Workers With Specialized Skills
Family businesses by tradition tend to want to keep their businesses “in the family”. Bigger enterprises would have moved on from this tradition but usually retain a significant number of family members in the top decision making tiers. However, for small to medium sized family businesses that want to explore the possibility of digitizing their businesses, it is worth investing in the right talent from the outside. Whether it is hiring an IT specialist, a web specialist, or a digital marketing specialist, bringing in new talent from the outside can help improve the knowledge base of decision makers about the digital economy. Alternatively, managers and decision makers can invest in training their millennials, therefore still retaining their family business identity.
Outsource Digital Work
Family business conglomerates in Asia no doubt have already adopted various digital business practices to remain competitive in their respective markets. However, for smaller family businesses that want to retain their family business identity while remaining competitive, outsourcing some peripheral functions could be an option. Today there are many different agencies, freelancers, and specialists who cater to family businesses and are affordable. Outsourcing would take away the need to find the right person to do the job within the family business or hiring someone from the outside. With a little bit of research and networking, managers can identify some reliable suppliers who can help them pursue a more digitized business model.
Besides the above, there are no doubt quite a number of other ways family businesses in Asia can become more digitized. In supporting the competitiveness and growth of family businesses in Asia, local governments can strengthen their support to these businesses in different ways. This could be done through capacity building, technological investments, especially in digital infrastructure, or simple digitized processes that simplify interactions with local government. Since a significant portion of big businesses in the future will be family owned, it is therefore worth making headway in figuring out how more family businesses can best engage in the growing digital economy.