To understand the need for digital transformation in SMBs – before debating whether it’s utopia or a necessity – it’s imperative to know the role that small businesses play in the economy. The US SBA Office of Advocacy has described them as the “lifeblood” of the economy and categorically stated that small businesses “drive innovation and competitiveness” in the country.
It follows that in order to increase manufacturing output, deliver better services, employ more people more productively, and simply make more money, companies need to modernize everyday processes, tasks and functions. With modernization comes change – and this change is structural and cultural as much as it is technological. This combination of modernization and change for the better is what goes into “digital transformation” as we know it today.
In a nutshell, digital transformation means making use of technology in all operational areas of a business in an attempt to increase the value it delivers to its customers.
The Need for Digital Transformation
Every business has a different goal, depending on its size, market, profitability, customer base, and other factors. Therefore, the causes and drivers of digital transformation in your organization will vary accordingly.
In a worldwide study involving more than 3,600 SMBs on the perceived benefits of digital transformation, Techaisle found that cost efficiency was the single most important consideration. The other major business objectives are fueling innovation, attracting more customers, driving growth, and increasing productivity.
The question you need to ask yourself is, what are the keys to speeding up and scaling up digital transformation in your organization? Here are three.
- Have a Digital Transformation Strategy in Place
With a foolproof understanding of the needs and objectives of the company, every CEO leading transformation should be fully prepared for the journey they’re leading their colleagues along. Coming up with a roadmap for this involves three critical steps:
- Evaluate your current state. It is vital to understand the status quo within various departments of the organization, the level and depth of its technology adoption, and its readiness to change. More often than not, your organizational culture might not be receptive to transformation. Or, you might not have the IT budget or in-house capabilities necessary for full-scale infrastructural upgrades.
- Align business goals with new technology. Whether your transformation is driven by applications or new hardware, it must be mapped to a growth-oriented objective such as acquiring more customers, cutting support times, or reduce operational expenditure.
- Take a holistic approach. Transformation is not a pilot project. Precisely outline what digital transformation means for your company, set aside the necessary funding, and make sure you have the technological capability to go ahead with it. Most of all, know how digital transformation will impact your operations and products.
- Understand the Effect on People – Customers and Employees
Ultimately, customers are the drivers of profits. Therefore, every little moving part that powers digital transformation should focus on improving the customer experience. Today, customers have access to information about a company’s products and services, as well as its brand voice and personality right at their fingertips. This means the experience that the company offers them is going to be the pivotal factor in their purchase decisions.
Data is key to improving customer experience. No wonder the latest martech makes it easy to track every interaction between a brand and its audience, and enable customer profile analysis for lead generation and nurturing, as well as customer retention and advocacy. The widespread adoption and use of chatbots among SMBs clearly indicates how technology is enabling faster and simpler customer service practices.
Digital transformation isn’t just about making your customers’ lives easier – it’s crucial to not forget the people within. Internal buy-in is critical to the success of organizational change of any kind. Put your employees first by providing comprehensive training and resources, embracing new work styles, and leading from the front.
Helen Crosby of Nimble Results has three critical pieces of advice for leaders who want to add a “human imperative” to digital transformation within their companies on the back of closer communication with their teams:
- Sell your vision!
- Breed infectious enthusiasm!
- Show you mean it!
- Embrace and Leverage Evolving Technology
With the explosion of workflow automation tools, SMBs are uniquely positioned to try out and implement new technologies in short order. Time-strapped business owners are adopting super-effective, AI-based SaaS and PaaS tools, porting their customer and vendor interfaces to mobile devices, using big data to track and analyze key metrics, and evaluating public, private, and hybrid cloud environments in order to scale up their digital workflows.
The result is increased productivity, faster lead conversion, and insightful customer data that can be used to make more accurate and timely business decisions.
Thrive in the Face of Rapid Transformation
Digital transformation often starts with simple objectives, such as eliminating paperwork by converting processes and documents into digital formats. However, the full implications and possibilities are almost infinite. SMBs have the advantage of adapting new work practices quickly while also being able to changing course in a jiffy when something doesn’t work out.
If you lead or manage a small business that is growing in size or revenue while balancing technological change, know that creating an adaptive culture – one that is willing to constantly reinvent itself – is the only way to keep pace with the market.
Regardless of what industry you operate in, it is changing. So are your customers. So are your competitors. Will you transform your business accordingly? Or will you risk being left behind? Let 2021 ring in the new!