Digital Transformation Investments for Small Businesses. .
Dive in & read all about digital transformation for small businesses & the impact of digitalization on small businesses.
Digitalization. Technological Transformation. Digital Innovation. We’re sure you have heard these words being thrown around quite often. Whether it’s a business meeting or a casual conversation, these are topics that everyone wants to talk about. This is not just due to them being the new ‘trending’ thing for the millennial intellectuals but because these are, quite literally, driving a revolution in the world of business.
So, what is Digital Transformation?
In a layman’s language, Digital Transformation is simply the process of incorporating digital technologies to create new or make innovations or modify existing business operations, business culture, customer experiences, and business methodologies. This is mainly done to stay up to date with the changing market & business requirements.
This transition of a business’s internal and external functions & the reimagining of its core concepts is called Digital Transformation.
A word of advice for small businesses that have just started: Do not depend upon future modifications or improvisations to change your business processes.
Instead of opting for paper ledgers and sticky notes, you can go digital right from the beginning. It will help you establish a future-proof organization.
Planning, organizing, and implementing your small business digitally sets you up to be flexible, ready to grow & agile.
Now let’s go over some key features of Digital Transformation.
Everything revolves around the customer in Digital Transformation.
The very crux of Digital Transformation is its customers. It is designed solely for the ease and convenience of customers. From good customer experience to excellent customer service, the whole layout is based on the psychology of the consumer.
Another important factor is to understand what’s the difference between digitization, digitalization, and digital transformation?
Digitization — converting analogous data to digital data.
Years ago, companies and enterprises kept records of accounts, sales, and other important matters on paper. Hand-writing every entry & every number, piling up endless stacks of sheets of paper. However, when internet and computers became common, businesses began to convert their ink-and-paper records to computer files.
This conversion of turning analog information digital is called digitization.
Digitalization — Simplifying everyday business operations.
Digitalization refers to the use of digital technologies to make business operations easy, swift, and quick.
The biggest transformation digitalization has done is in the world of customer service. It has truly changed how customer service works by making customer records accessible at the touch of a few fingertips.
Instead of searching for a particular customer ID in stacks of paper ledgers or hysterically looking for customer records in file cabinets with 1000s of sheets of paper, information is now available within a couple of keystrokes.
Now, as digitalization was adapted far & wide and digital technology evolved — people didn’t just use digital technology to do the old tasks faster. They were now coming up with new ways of doing responsibilities, using newer technologies. This is when Digital Transformation began to take place.
Transformation of Small Business through digitalization:
A Small Business’s digital transformation should be a customer-centric business strategy leading to one goal: To transform internal operations using digital technologies such as
- Augmented/virtual reality
- Internet of Things (IoT), etc.
Let’s now take a look at the 4 Main Areas of Digital Transformation.
- Process Transformation:
It refers to modifying a company’s business processes. By undergoing such a radical change, an enterprise modernizes itself through organizational processes, integrating new technology, saving up on costs, and incorporating core systems in a better manner.
These are the important steps to go over for a Process Transformation:
- Identify the goals of the transformation
- Establish baseline metrics
- Bring in all stakeholders
- Map out the best scenario
- Set live and monitor
- Business Model Transformation
Business Model Transformation refers to companies changing or innovating their traditional business models using technology.
Some examples include:
- Netflix’s reinvention of video distribution.
- Apple’s reinvention of music delivery (i-tunes).
- Uber’s reinvention of the taxi industry.
When a company adds to its current business model or reinvents old ones, it opens new doors of opportunities and growth for corporations. Therefore, it is recommended for businesses to follow a similar path.
- Domain Transformation.
Domain Transformation refers to an area with great potential that has not been able to receive a lot of attention.
New technologies can redefine such products or services and foster unlimited opportunities for growth. It breaks the loop of traditional methodologies and incorporates newer technologies.
- Cultural/Organizational Transformation.
An organization must evolve its internal values, attitude, and behavior along with its digital transformation. Successful Digital Transformation demands more than just the reinvention of business operations or redesigning of products.
Here are some core elements of digital culture:
- Promotes external orientation over internal orientation.
- Prizes delegation over control
- Encourages boldness over caution
- Emphasizes more action and less planning
- Values collaboration more than individual effort
Why should Small Businesses invest in Digital Transformation?
A study conducted by Cisco gives us a clear picture of the digitalization landscape and how the pandemic has evolved it.
- 72% of small businesses have been able to accelerate digitization due to COVID-19 and the need to operate a remote workforce or engage with customers better.
- Only 24% of small businesses are in the most advanced stages of digital transformation.
- A mere 4% of small businesses are in a digital native stage.
- Around 26% of small businesses have made little or no effort to accelerate digital transformation
These fast facts should give you a quick & clear idea about the impact of digitalization on small businesses, particularly in the era of Covid-19.
Below are 6 tips for Successful Implementation of Digital Transformation for Small Businesses:
- Encouragecollaboration &break down silos.
- Empoweremployees with data.
- Ensureseamlessintegration of business systems.
- Involveeverylevel of the organization
- Seektechnologypartners with SMB experience.
- Don’tfallprey to the “Bright Shiny Object Syndrome” — Do not jump to try every new technology.
To conclude, the Adaptation of New Technologies and Digital Means is inevitable. The question is, would you have your business be forced into it over the course of the next few years or will you do it now to accelerate growth & be at the top?
The decision is yours. Investing in Digital Transformation as soon as possible is what we recommend to your small business.