Digital Transformation – Relevance for SMEs
Digital Transformation is defined as the use of changing digital technology to solve everyday business problems. This technology includes the use of cloud computing, with increased reliance on subscription based cloud software, services and solutions.
On a daily basis, more and more products and services are introduced, that are marketed as helping to generate more leads, making it simpler for your business to close sales and providing more efficiency within your organisation. That’s all fine, but how does it work for you?
It is tempting to subscribe for such services at the click of a button, especially since there’s “so much at stake” if you don’t but what is the cost of such a simple step?
Are you compromising something already in place?
Have you got a complete understanding of your current business processes?
How productive and efficient are your staff and what value do you get out of them today?
So is Digital Transformation just another buzzword?
Dependant on how you chose to apply this concept to your business or if you just get caught up with all the hype, it may be just that! However the reality is that Digital Transformation is about what you are going to do to bring together the people, process and technology in your business, which should be emphasised within your strategy and implementation plan. To do this, you will need to define a clear roadmap for your business – where are you now and where you are headed? So in a sense, this buzzword can be a major strategic enabler to help your business grow significantly.
According to analysts, Gartner, their CIO Agenda suggests digital business will represent an average of 36% of a business’s overall revenue by 2020.
The group’s report, found that 66% of companies embarking on digital transformation expect to generate more revenue from their operations, whilst 48% predict that more business will arrive through digital channels. Other reasons for doing it were to empower employees with digital tools (cited by 40%) and to reduce costs (cited by 39%). There is therefore a clear case, proving that now is the time to kick start your own digital transformation journey if you want to reap the rewards down the line.
Being in the market, you’re already aware of the plethora of apps and platforms entering the market on a daily basis. These all appear to be relevant to you and give you a sense of missing out if you don’t subscribe. Whist it is easier for larger enterprises to assess the relevance of new apps and platforms, given their strategies and access to skills, for a smaller business, it could be more difficult to assess the need but very easy to sign up through the marketing hype!
As a small but ambitious business, the key question for you to consider is the real cost of signing up to the new app or platform. If it integrates with your current technology, process and your people are comfortable then all well and good. If not, you’ve just introduced something in your business that may divert time and effort from your strategic goals and hence can make the difference between growing your business or hitting a significant road block.
A global study from Sage last year found that “business builders” spent on average 120 working days per year on admin tasks. These were dominated by accounting activities such as invoicing, which comprised a large proportion of the total time spent on admin by owners of medium-sized (41%), small (46%) and micro firms (51%).
According to Worldpay figures, a third of small businesses spend no time at all analysing business data, 62% can’t identify their top three selling items and just under 50% don’t know their top 10 customers or what they order. 20% of small businesses said they can’t generate an up-to-date financial forecast.
These studies qualify the view that there is a lot to think about in terms of a robust business plan, which informs the strategy, which in turn informs your process. Executing your strategy in this way will lead to better chances of sustainable success for you and ensure you are more agile to the ongoing changes in the business landscape in due course. Further, you can see there is a correlation between your strategy and process, hence the need for you to make informed choices that will drive digital transformation for your business. This in turn will reduce your administrative burden, make your lead to cash cycles leaner and give you the best chance of sustainable success!