Is Digital Transformation Helping Small Businesses Boost Their Bottom Line?

Quick Run-down: Is digital transformation really boosting small business bottom lines? Yes, it’s true. Leveraging the power of digital transformation isn’t limited to big companies anymore. Our blog unveils how to build a winning digital transformation plan specifically for SMB’s, identify key areas for digital overhaul, and bridge the gap between SMBs and enterprise giants. This guide is a roadmap to lead your business into the digital age. Read on.

Businesses are no longer left with an option. Digitization is a necessity today. It’s a matter of survival for small businesses – especially after the Covid-19 pandemic. Even if your business model is profitable and you feel like everything is going perfect – that extra cherry will be missed without digital transformation.

By adopting or integrating a digital transformation strategy into your business, you can drive customer value with prominent changes. According to a survey by Cisco, small businesses could add approximately $2.3 trillion to the GDP growth by advancing their digital transformation journey.

In today’s generation, any business, regardless of its size – their operations and strategy, is driven by data; and data is accurately organized with the assistance of modern technology.

Brands are focusing more on transforming their business digitally to leverage the potential of digital platforms’ intelligence.

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Setting Up a Digital Transformation Plan for Small Businesses

Enterprises are not only aligning their process with technology; they’re discovering new possibilities and new horizons for business by the data provided. This is where small businesses need to work smartly and harness every piece of data spawned by these technologies.

However, in reality, it’s observed that many SMBs fail in accomplishing the goal of adopting digital transformation successfully. To achieve this, businesses need to make significant changes from planning a strategy to investing in the right technology.

Recent studies have found that the cloud is the topmost technology priority for small businesses. The transformation of any business digitally is solely based on two pillars - Innovation and Disruption. To stay in the competition, constant innovation is the key; businesses need to evolve with time. Changing landscapes are proof that the emerging market no longer accepts old processes.

In today’s economic world, disruptive forces abound. As a result, maintaining the impact of such a transition usually necessitates a significant change in thinking and behavior. Modern technology, vendors, and cultural support are all important components of a successful digital transformation solutions implementation.

Areas Where Digital Transformation Can be Implemented

Digital transformation by definition doesn’t only mean taking your business to the digital space; there’s a lot more behind these two words. To foster business revenue through digital transformation is not that easy as it may sound. Businesses are now trying to figure out how to put their dust-gathering digital transformation initiatives into action quickly enough to meet the new demands posed by the pandemic.

Below are some prominent areas where businesses can greatly benefit from digital transformation:

Business Process Transformation

By incorporating useful technology for specific business needs, companies can enhance their existing process impeccably. For example, leveraging AI for data management, creating a mobile app for on-field workers to enable real-time updates, automating the follow-up or accounting processes.

This process transformation includes:

1. Determining the transformation’s objectives: Is the organization simply attempting to upgrade legacy systems? How about incorporating modern technology? Processes to be adapted to a new organizational structure? What prompted the requirement?

2. Creating baseline metrics: Businesses should gather the data necessary to demonstrate that the business process transformation will be successful. Cost, duration, number of errors, and other factors should all be considered.

3. Take in all stakeholders: This includes asking everyone involved in the process for feedback on what worked well in the previous transformation strategy and what they’re expecting from the current one.

4. Build the ideal workflow: Businesses should also create the ideal workflow path using a diagramming tool that includes human and system tasks to optimize output.

5. Go live and keep track: Once everything is to the point, the business can initially introduce this new process to a small group/team and track the progress. If any modification is required for enhancement, it can be easily done.

Business Model Transformation

This includes transforming the existing business model completely with digitization or technology. For example, Uber reinvented the old model of the taxi industry, Netflix reinvented the video distribution, Amazon reinvented the shopping experience. These are just a few of the well-known brands that have successfully implemented the business model transformation – the list is long.

Short Story of Best-Buy:

Almost 9 years ago, Best Buy was going through a tough competition. Everyone thought it would slowly give up and depart from the market. But Best Buy’s new CEO took an innovative approach that led the business into digital tech leader.

The digital transformation journey was long (i.e., 7 years), but this path enabled Best Buy to bring value to people’s lives. They did not just sell new CDs and TVs but also started advising consumers and assisting them on ways to get the most from their digital devices.

Best Buy stock trading in the market at USD 58 in late 2006 saw a tremendous downfall to USD 12 in 2012. However, after their new approach to digital transformation, the business saw steady and profitable growth, which led its stock price to USD 116 as of today’s date.

Domain Transformation

This type of transition is a little more difficult, and it isn’t feasible for every small business. With domain transformation, a company can broaden its services and capabilities to become a more all-encompassing entity.

A popular example of this is Amazon of how domain transformation works and moved into a new market domain with the launch of AWS (Amazon Web Services). The domain historically dominated by high-profile behemoths like Microsoft and IBM was now conquered by AWS. It's also now the world’s largest cloud computing/infrastructure service provider even ahead of Azure and GCP.

Organizational Transformation

This is just another effort or area to achieve a successful digital transformation. If a company’s digital transformation efforts aren’t aligned with its internal values and habits, it can have a negative impact on the company’s culture.

Negative consequences include everything from a sluggish adoption of digital technologies to a loss of market competitiveness and, eventually, failure.

A thorough and collaborative effort, on the other hand, can assist in shifting the culture to comprehend, accept, and promote digital transformation.

Leaders must develop a clear vision for the transition and convey it effectively throughout the organization on a regular basis. They must understand what sensible risks are and why they are worthwhile.

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Difference Between SMB and Enterprise in Transforming Digitally

According to the SMB Group’s 2017 U.S study, nearly 50% of small and medium businesses (SMBs) surveyed said they are currently planning to get involved in activities that will aid them to adapt and transform their businesses for a competitive digital future. In the same study, nearly 75 percent of companies surveyed agreed that digital technology influenced how they did business.

Expenses and Time

Most enterprise businesses must transform complex solutions, which necessitates larger budgets and a longer timeframe to complete. Because of less investment and revenue, small businesses have lesser budgets and time frames for the complete transformation.

Henceforth, simplifying digital transformation to focus on the most critical areas for integrating digital technology is essential for small businesses’ success.

According to Statista by 2022, spending on digital transformation (DX) is projected to reach 1.78 trillion U.S. dollars Click To Tweet

Enterprises can hire experienced professionals in digital transformation and practice these initiatives to revitalize culture and inject energy into the organization. Many small businesses lack the same level of executive support that is required to drive transformation.

Consultive Assistance

Big enterprises can fund and hire consulting firms to provide them with a road map for driving transformation. However, for small businesses, it might be a challenging task to afford such consultation fees. Leveraging vendors can allow small businesses to quickly and easily help progress in the transformation process.

Engage or Motivate C-suite to Become Digitally Sound

Its commonly observed that introducing something (transformation) new in the existing process that’s working smoothly is challenging to convey when we talk about the C-Suite individuals especially.

Because not every experienced leader wishes to shift their legacy process with modern digitization Thus, small businesses need to have data scientists in their leadership team to convince their C-suite leaders for digital transformation. Invest time in planning all the different perspectives and see where your business can succeed by implementing a digital transformation strategy.

Earlier CTO’s were the only experts in opportunities that were showcased by new innovative technologies. But now, CTOs are asked to lead every niche that’s related to digital transformation for business. Thus, it’s their responsibility to think of new digital strategies and discover areas where digitalization can create business value. Apart from this, CTOs also need to educate or motivate their fellow team members to embrace these modern technologies.

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The Final Words

Examine the way you run your business. How could you use modern technologies to improve and integrate various transformation plans in business?

Starting with your customers is a fantastic yet effective way to begin. What exactly do they require? What are their pain points? What could you do to make the process smooth for customers to collaborate with you? Could new tools and technology be of assistance? As highlighted above, digital business transformation is more than a buzzword.

So, let’s connect and analyze innovative methods to optimize your business process with our smart and bespoke legacy application modernization strategy.