As the saying goes, disrupt or be disrupted. We need to look no further than the advent of new, digital native tech startups to see that we are in an era of change. Indeed, digitalization is essential for businesses -big or small- as they evolve with the changing needs and demands of customers.
However, there are misconceptions in today’s landscape. The digitally-ready are often only characterized as young, energetic businesses that were born of and into a world of technology, while those trailing behind are old giants of industry, bogged down by legacy systems. Of course, there’s truth in that but it’s important to remember that there equally exist MNCs that have successfully transitioned. And perhaps more problematic, SMBs that are stuck halfway on their digitalization journeys.
There’s every reason as to why that might be, SMBs are more likely to be operating on lean resources, with reduced manpower and limited budgets for technology investments, so if it’s not broken, why fix it? After all, digitalization is no small undertaking and requires some significant commitment and serious planning.
The reality, however, is that while current business models might not yet be broken, they have reached their limits. According to Cisco research conducted with IDC, escalating costs of operation, changing consumer behaviours and a rapid decline in the price and value of goods and services are among the biggest threats small businesses face today. All of which, are challenges that can be addressed with the right digital transformation strategy. It’s a case of doing or die so it’s no surprise that SMBs are therefore exploring ways to reduce costs, gain efficiencies and improve their offerings.
That said, digitalization needn’t be seen as the necessary evil. If anything, SMBs that are ready to embrace digital could be taking advantage of a huge opportunity to level the playing field in a classic case of David and Goliath.
It’s a Business Problem, Not an IT Problem
From digital products, services and customer experiences to powering core operations with new technologies, it’s widely agreed that a successful digital transformation needs to permeate every part of a business. However, who do you put in charge to lead the way?
In larger organizations, whether it’s your CIO, CTO or even dedicated CDO, it is likely that the mandate will ultimately be put in the hands of the IT department and they have to be fully aligned with the business’ key objectives for digital transformation to be successfully implemented across an organization. However, in a small business, these positions may not even exist. And that may well be their trump card. Clarity of direction is a key ingredient in the digital transformation formula. So, who better than the business owners and decision makers of small businesses to steer the ship?
Here, the leaner and typically more flexible working structures of a smaller business work to their advantage, business executives are closer to the action, and more involved in decisions across the board. There are fewer barriers. This makes it easier for departments to come together to devise goals for the company to pursue. The CEO then acts as the champion and beacon.
Planning Ahead for the Digital Upgrade
Of course, it’s not as simple as giving the green light. So what should SMB owners and decision makers keep in mind when approaching transformation to minimize the bumps on the road ahead?
Your organization should have a clear purpose when undergoing a transformation. What does the future look like, and what is the opportunity you’re looking to take advantage of?
Plot out your roadmap, and carefully consider the steps that need to be taken in order to achieve your goals. That said, don’t be afraid to change course if things go wrong. It’s better to fail fast and quickly reallocate budget than to fight a losing battle.
Be prepared to restructure your business and deploy your manpower elsewhere to facilitate transformative changes. Ensure you’ve put measures in place to support your digital ambitions, rather than trying to fit a square into a circle.
Hit the Ground Running
Moving beyond the planning stage and into the thick of the action starts with a mindset change, inspiring and empowering people to transform the current business culture. It is about focusing on changing your business processes and by shifting the behaviours of the people who must act upon those processes. Once you’re able to get your employees on board, technology will complete the puzzle.
The reality is, the transformation doesn’t happen overnight. A key tell-tale sign that you’re on the right track is when the “customer-first” attitude is embedded in every department so that every effort starts and ends with the customer in mind. Underpinning this is a rigorous and continuous process of data collection and aggregation, resulting in huge sets of data points that can be analyzed for consumption patterns, buying trends and product associations.
If approached correctly, digitalization should permeate the whole company, with the potential to improve efficiency, increase productivity and lead to better customer experience and business outcomes. And unlike large enterprises, that have to tackle complex legacy systems and processes, SMBs have the ability to make faster decisions, and power through digital transformation. The task may seem daunting, but if business owners take this as an opportunity to lead by example, they can place their flag firmly in the ground and shout to the world, we’re here to stay.