Digital transformation is more than just a buzzword; it is a crucial strategy for businesses and their growth. As evolving technologies equip businesses with new and exciting ways to serve customers, owners, founders, and CEOs of mid-sized and family businesses are feeling the pressure to fulfill the high expectations their prospects have of them.
According to estimates, businesses who’ve implemented effective digital transformation strategies will contribute more than 50% of the global GDP by 2023 and worldwide spending on digital transformation reached 1.3 trillion US dollars in 2020, with a 10.4% YoY growth – despite the economic depression caused by a raging pandemic. This clearly shows that savvy businesses of all sizes need to invest in upgrading their systems and processes, transforming the way they work.
However, 48% of leaders in mid-sized businesses are still only planning their transformation for a digital future. How do we go from planning to doing?
Let’s start by looking at the definition of digital transformation.
What Is Digital Transformation?
The answer to this question is more sweeping than many realize.
It can be broadly defined as the integration of the latest, tried-and-tested digital tech to improve all areas of the business as well as the inherent operational processes, all in an effort to provide greater value to prospective customers.
This includes using the best digital practices and employing new skills and talents to optimize business for the digital future.
However, digital transformation also mandates a cultural shift of sorts as businesses become more agile and deploy intelligent ways to getting things done, usually powered by automation and powerful analytics to guide the way.
The Benefits of Digital Transformation
As digital transformation has touched every aspect of a business, there are several reasons why it is vital for an organization.
This is why 89% of companies have already adopted a digital business strategy or plan to do so.
Innovation Gives A Competitive Advantage
Even though digital transformation is gaining ground among small and mid-sized businesses, there's only a small number of companies investing in it effectively. This shows that many companies are struggling to evolve and are operating their businesses through outdated systems.
But what they fail to realize is that their potential customers have access to advanced tech that they can wield to find better digital opportunities. Moreover, B2B businesses are also using digital channels to their advantage.
Adapting a digital setup can help your business get a competitive advantage that drives growth and empowers you to come up to par with your customer’s expectations.
Reduced Risks And Higher Security
Digital technology can introduce your business to robust and reliable software that reduces risk and chances of failure.
Additionally, digital transformation ensures maximum security for your business, which means protecting your company's valuable data and important customer information.
Improved Decision Making
Businesses these days are only as good as the data they use to make decisions. Giving yourself and your teams access to the data collected through tools like a customer management system or a content management system means you can leverage it to guide your strategy.
With the right digital tools it has become easier than ever to gather data, analyze it, and find valuable insights.
Data analysis has become a specialized field for many businesses that hire experts to help them find meaning in statistics and numbers. Through these insights, companies can optimize their strategies and streamline their processes for better results.
These data-driven insights help businesses better understand their customers to execute personalized strategies while enabling real-time feedback and business agility.
Thus, the role of digital business processes in offering data-driven insights must not be underestimated, as this can lead to a higher ROI.
Enhanced Collaboration Across Departments
The thought of digital transformation and changing business processes is a daunting prospect for the majority of the employees. This can be assessed from the fact that according to the SMB group study, 27% of leaders observed their team's resistance towards a transformation, a significant challenge.
This is because digital transformation demands major changes in all the business processes and strategies right down to the company culture's core. But this presents a perfect opportunity for ensuring unity among the employees as the entire transformation process requires seamless communication.
Digital Transformation: Challenges For Businesses And Solutions
If you have decided to take your small or mid-sized business on the journey of digital transformation, you need to assess the challenges you might face and the strategies that you can employ to remain firm in the face of these challenges.
Lack of Digital Skill-Sets
One of the biggest challenges of driving digital transformation for your business is the lack of skill sets that can help you embrace the technological shift. Since digital transformation involves introducing emerging technologies and significant changes in business processes, your employees might not have the skill sets to adapt to these changes.
A Deloitte's analysis shows that almost half of the small and mid-sized businesses have reported at least one challenge related to the lack of skills or employee training.
To drive digital transformation, small and mid-sized businesses need to adopt employee training and skilling programs that introduce the employees to the latest digital tools.
Ignorance Of Digital Security
The technologies associated with digital transformation offer several advantages, but they come with their security risks. This is why small and mid-sized businesses need to secure their network's endpoints through strict security measures.
Another target in ensuring the security of your digital processes is training and educating the users about security practices that reduce the chances of malware risks.
Misunderstanding Agile Transformation
Another challenge includes keeping your business up to speed with the constant digital landscape transformations. Also, many small businesses fail to realize the need to change their company culture to support agile transformation.
To counter this challenge, you need to instill a transformative vision in the core of your company culture. Moreover, it also means standing firm in the face of failures and leveraging digital tools to experiment in profitable avenues to drive business value.
Compromised Customer Experience
Customer experiences have been termed as the key differentiator between your business and your competitors'. Companies do not get the time to provide the ultimate customer experience, especially if they do not use digital tools in this technology age.
Thus, the key to eliminating this challenge is to wield technology that assists in offering the best customer experiences that keep your customers around for long.
Some businesses rely on their age-old business processes and digital tools until now, but these legacy systems prove to be a burden rather than an asset.
To embrace digital transformation, small and mid-sized businesses need to shun their legacy systems at the right time to make their name in the digital world.
Embracing digital transformation for your business is complex, but you can drive change as long as you first take the time to understand digital technology. Then, combine it with your business processes to deliver high value to your customers.
As you start executing your digital transformation plan for your business, ensure that your workforce is on-board with the changes and committed to building a better, more agile workplace.
Envision a business that uses cutting edge technology and the right digital skills to keep up with the world. Now go out there and build it.