Data is driving everything these days, and people are more connected to their devices and the digital world than ever before. New technologies are emerging every day.
This has the potential to not only dramatically improve productivity and create efficiency gains in processes across all industries – far more importantly, it opens up entirely new potentials for what products and services business can offer their customers.
This is the crux of digital transformation. Research by Bain & Company revealed that companies known as digital transformation leaders grew their revenue by 14% between 2015 and 2017 which “more than doubled the performance of the digital laggards in their industries.”
And the trend is spreading.
In a recent survey of 1,800 small to medium businesses, only 18% admitted to not having implemented any kind of digital transformation.
Let’s dig a little deeper.
What Exactly Is Digital Transformation?
The majority of small businesses are in the dark about what exactly digital transformation entails, but research by the SMB Group shows that they are ready to embrace it whatever it involves, with 48% of SMBs/SMEs planning a digital overhaul in the not-too-distant-future.
“We define digital transformation as how businesses use digital technologies to create new or modify existing business processes, practices, models, culture, and customer experiences to meet changing business and market dynamics,” says Laurie McCabe, Co-Founder and partner at SMB Group.
The very basics involve identifying key areas where you can adapt your business to boost customer loyalty while nurturing a competitive edge in your industry. As you can see, this isn’t just about marketing and social media, it covers every part of your business, from logistics and shipping, to staff management and accounting.
Remember: It’s Not About the Technology
Digital transformation leverages digital technologies, but the technology is only there as a means to an end. The goal is always your organisation’s mission and future. The p
The Move to Digital Isn’t New… But It Is Changing
The role of technology in most small businesses isn’t a revolutionary one so far. In fact, the majority of companies that do implement digital processes in one way or another do so to support activities they’re already doing, but quicker. We’re talking things like automation and digitising databases, for example.
These aren’t game changers, but they do help speed up intricate and repetitive processes.
Things are changing, though.
Digital transformation goes deeper than just implementing new technologies, and instead encourages SMBs/SMEs to step back and ask themselves why they’re doing something in the first place.
So, rather than just integrating a new technology “because everyone else is”, digital transformation means changing processes with a clear goal of, say, improving decision making workflows, increasing efficiency, or personalising customer experiences.
“The reality is, the world around us has changed rapidly,” says McCabe. “Small businesses can’t continue what they’ve done for the past 20 years and still expect the same results.”
Today, it’s all about disruption. If you’re not teetering on the edge of innovation and constantly seeking out ways to adapt and be fluid, you run the risk of falling behind those that are doing this.
When Does a Business Need Digital Transformation?
Millions of SMBs/SMEs potter along at the same speed doing what they’ve always done and do just fine. But it’s very rare that these businesses will be at the top of their industry, and they may not even grow at all.
In fact, lack of growth is a key red flag for businesses that are in dire need of digital transformation. If you’re getting less referrals than before, or once loyal customers are taking their business elsewhere, you’ve got to start digging deeper into the “why” behind that.
If a business can’t figure out the “why”, it’s clear that they don’t have a tight grasp on their business data or, in more extreme circumstances, have completely lost touch with what their customers need.
On top of that, many small businesses use a number of apps and tools that don’t necessarily integrate well together, meaning that it’s unnecessarily tricky to gather key data insights together in one place.
If this is you, it might be time to take a look at your current processes and consider how you can adapt and change them to better suit customer and industry needs.
How to Tackle a Digital Transformation
Digital transformation can be overwhelming for even the most tech-savvy businesses. There are tons of digital tools emerging by the day, making it harder than ever to know that what works for one business won’t necessarily work for another.
“Every business should do an internal assessment to identify gaps, problems, and potential threats,” says McCabe, adding that it’s important to ask yourself what your biggest problem is and what your business needs to survive or, more importantly, thrive.
For many small businesses, digital transformation seems out of budget. But the reality is that, once it’s implemented, it can double or even triple your revenue, making it well worth the initial investment.
Expert help is a must if you don’t want to waste time or excess money experimenting and “testing things out”.
“I’m a big advocate for working with skilled consultants, partners, and vendors to chart out the best paths to success,” says McCabe. In particular, you want to pick experts who have past experience in helping other companies in a similar boat to you get their businesses whizzing off in the right direction.
How to Make Decisions at the Start of Digital Transformation
Like in most areas of business, collaboration is key.
Making decisions in a vacuum means you’re not listening to your customers or your key stakeholders. Even if you only have a few employees, they’re all going to be affected by any digital changes you make, whether it’s how they do a certain activity or even how they do their job as a whole.
Share ideas early on, keep an open mind, and make sure everyone involved knows what’s going on at all times.
Common Mistakes SMBs/SMEs Make When Carrying Out Their Own Digital Transformation
“Too often I’ve seen businesses invest in different technologies that don’t integrate well,” says McCabe.
This doesn’t seems like a huge problem at the start but, once you’re a couple of months or years down the line, it becomes difficult to change things up when everything’s already entwined.
But perhaps the biggest mistake SMBs/SMEs make when implementing digital transformation on their own is trying to do everything at once. Like with anything, you’ll see better results if you stay focused on one thing at a time.
This can be difficult when you’re faced with tons of vendors with platforms that have all-singing, all-dancing features. However, these tools often have incredible capabilities that let you customise how you do things to suit your businesses’ own needs.
McCabe puts it simply: “for any business to succeed, information from across the business must be able to flow through different processes and workflows seamlessly.” If you can do this, you’ll streamline your operations to be more effective in every part of your business.
What’s Next After Digital Transformation?
More digital transformation!
The exciting thing is that digital transformation isn’t a “tick and it’s done” process. People like to say it’s a “journey”. One could also say it should become a culture – a culture of ongoing improvement, continually leveraging the new possibilities emerging with new technologies. And, while that might sound terrifying and just a little bit draining, it’s also incredibly liberating.
By always looking ahead to the next step, you create a business that’s nimble, innovative, and cutting edge, and this will be what makes and keeps you successful in the long run.