If you are a small and medium business (SMB) owner, you may be planning or have already started your journey to transform your business digitally. Digitizing your ecosystem on a limited budget may seem daunting, but here are four digital transformation best practices that will help you stay competitive even on a budget.
Organizations have already realized the need to digitally transform themselves to stay competitive in the rapidly advancing business world. While many organizations have already embraced the path of digital transformation, there are others who are struggling with the concept. According to a reportOpens a new window by Gartner, while about 87% of senior business leaders believe that digitalization is a priority, only about 40% of the companies have brought their digital initiatives to scale.
By taking specific steps and adopting some practices, companies and specifically SMBs can transform themselves digitally in a cost-effective way.
What Is Digital Transformation?
Digital transformation can be one of the most confusing terms as it means different things to different businesses. For some organizations, taking their brick-and-mortar business online may mean transformation. For a few more, adopting AI chatbots or advanced analytics tools could mean transforming their business.
According to George Westerman, MIT principal research scientist and author, digital transformationOpens a new window marks a radical rethinking of how an organization uses technology, people, and processes to fundamentally change business performance.
Simply put, digital transformation refers to the use of digital technologies to create, upgrade, or modify existing processes, practices, workflows, models, etc. Companies digitally transform their business to add value, improve productivity, and streamline business activities to stay competitive and better position a business for long-term growth. A company’s challenges and goals drive the kind of digital transformation it wants to pursue.
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Why Is Digital Transformation Important for SMBs?
Research has shown that digital transformation is the only way forward for businesses to survive and stay relevant. It may already be seen how today’s digital businesses are transforming the concepts like supply chain, marketing, and sales, and putting traditional companies behind. According to StatistaOpens a new window , global spending on digital transformation will be $2.3 trillion by 2023.
Global market trends are driving this rapid digitalization of organizations. According to SMB GroupOpens a new window , the top digital transformation drivers for SMBs are:
- Attracting new customers for small businesses
- Staying competitive for medium businesses
- Improving employee productivity for upper midmarket
A digital transformation surveyOpens a new window conducted by Deloitte further showed that digitally mature organizations had reaped benefits that go beyond the bottom line. These benefits include improved product quality, revenue growth, improved customer satisfaction, efficiency, employee engagement, and reduced environmental impact.
How Can Digital Transformation Help Marketing?
The fact about digital transformation is that customers ultimately drive it. As marketing and sales are two departments that directly interact with customers, implementing new technologies can hugely impact how these departments approach consumers and attract and convert prospects into customers.
For example, cold calling is not an efficient way of attracting customers anymore as people can easily block calls, which they feel are spam. Instead, your website, blogs, and social media play a significant role in nurturing prospects and converting them into loyal customers. Similarly, marketing and sales can no longer work on blind assumptions. They need access to accurate data to understand how your target audience or customers interact with you, and if your efforts are generating a positive ROI.
Implementation of tools and technologies such as Google Analytics, SEMrush, HubSpot, and Moz can help you personalize your marketing campaigns to deliver more value to your customers, thus positively impacting your bottom line. They can further increase the efficiency of your marketing and sales teams by automating repetitive and manual workflows.
Digital Transformation Best Practices for SMBs
When digital transformation is done the right way, it leads to efficient workflows, productive employees, and happier customers.
Here are four digital transformation best practices you should follow:
1. Understand and prioritize your business goals
Every company’s digital strategy is unique, as each one has its own set of goals and challenges. Hence, it is essential first to understand your organization’s needs and concerns. You can do this through business process modelingOpens a new window , which will help you identify gaps, problems, and potential risks in your business processes. Only when you have identified the specific needs you can look to implement the necessary changes.
It is also essential that you prioritize your organization’s needs once you have identified them. A common misconception that most SMBs have is that digital transformation involves transforming all processes, workflows, and practices within the organization at once. However, the truth is that digital transformation is a step-by-step process. Transforming everything at once, like moving all your data, software, and services to the cloud, will be expensive and unnecessary.
Instead, identify and document specific issues that need immediate attention. Doing so will help you implement changes in a planned and phased way without taxing your business functions, resources, and customers. It will also help you easily track and manage changes. Further, a small change can significantly impact your organization and the bottom line.
2. Take your stakeholders and customers into confidence
While digital transformation predominantly involves digital technologies, it is not about technology alone. A critical component of successful digital transformation is people. You need to involve all your stakeholders in the process. They comprise decision-makers of different departments, vendors, and employees. Involving your stakeholders is necessary because they may have their concerns and viewpoints when implementing new technology.
For example, let us assume you want to implement a new tool that will help your marketing and sales team. Installing it and training the team involves a certain budget. Your finance department may need convincing about the additional costs involved. Your technology head may have concerns about whether the new technology can be integrated with other systems. They may also be unsure if they have the required skillset to implement the technology. Your marketing or sales team, which will be using the technology, may not be sure how it will make their lives easier or help them bring more customers.
Hence, it is vital to communicate with departments and employees who will use the digital systems to understand their needs and concerns. Understanding their needs will help you identify the features you really need in your digital solutions. So, instead of investing in a price intensive, feature-rich system, you will be able to narrow down on a solution that can cater to their needs and is easy and fast to deploy.
Another critical reason to involve these stakeholders is that they may not be willing to change. According to a studyOpens a new window conducted by the SMB Group, one of the top concerns for digital transformation is people being resistant to change. Some of them may worry about its impact on their jobs. Hence, it is necessary to educate them about their role in adopting digital transformation and the value it can create for them, your customers, and the organization. Collaboration and transparent communication with everyone in the organization will help them embrace changes in the work environment.
Challenges for digital transformation
Source: SMB Group
You can also involve and interact with your customers to get a holistic picture of their problem areas and expectations once you go digital. For instance, if your customers are happy with your service but have challenges navigating your online portal, priority should be to improve your web portal to ease navigation. Investing in a customer service chatbot will be the next step.
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3. Keep a focus on data and accuracy
“Successful digital transformation requires data. Without it, there is no clear view of the customer, no recognition of new opportunity, and no positive control of the business,â€
Jay DettlingOpens a new window , vice president global partners, Adobe.
While there is no question that data is essential, it is necessary to be able to extract valuable insights from the data you have, as this is what helps you exactly understand what your partners, vendors, and customers need. One challenge for many SMBs is to use available data, especially as data grows larger in size and complexity. Hence, it is necessary to unify and analyze data in a centralized system and make it actionable to create consistent, enhanced, and customized experiences to serve your customers better. As a small business, you need not invest in expensive tools or platforms. There are several low-cost business intelligence tools available in the market today. Some of them include Zoho Analytics, Tableau, Microsoft Power BI, and IBM Watson Analytics.
To make the best use of data, SMBs should focus on:
- Breaking down silos between teams and departments, and creating a structure where they can communicate with each other to bring data together
- Digitizing data workflows to manage data better
- Tapping into transactional, operational, and behavioral data across channels and devices to drive decisions and personalize communications
4. Integrate technology and systems
Seamless communication between various systems within the organization is of absolute importance for a successful digital transformation. A common mistake most SMBs make is implementing multiple disparate systems to address digital transformation needs. These disparate systems lead to a complex system that speaks multiple languages (different formats, inputs, outputs, etc.). This makes collaboration, upgrades, and maintenance a challenge. For a consistent, seamless digital approach, look for technologies and solutions that integrate well with your existing systems and offer comprehensive capabilities or are customizable when you scale up. You can also implement APIs that facilitate communication between business systems.
Also, digitizing with ubiquitous technology like cloud, mobile applications, collaboration tools, etc. that your users are familiar with reduces costs and training time. You simply need to identify common applications and platforms for your users, standardize formats and processes for seamless information flow to ease communication, and power up your workflows with digital capabilities.
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Final Takeaways
Digital transformation may look overwhelming for small and medium-sized businesses. However, the key is to identify the top priorities, start small, and take incremental steps toward transforming your business processes. Following the above-mentioned best practices will help you adopt the right technologies to improve efficiency, optimize costs, and deliver better customer experiences.
What steps have you taken to digitally transform your business? Tell us on TwitterOpens a new window , LinkedInOpens a new window , FacebookOpens a new window ; we’re always listening!