Why is Digital Transformation harder for Midsize Businesses?
At first, many business owners thought the digital age was nothing more than a flash-in-the-pan fad. Years later, almost all had accepted that it was absolutely necessary to support real-world business efforts – perhaps a website and a little social media marketing. Today, this supportive role has again faded into insignificance. To compete in the digital age, you need to be digital, not simply do digital.
Going digital: a necessary disruption
In a nutshell, digital transformation strategies are those moves a business makes that are driven by technology, with the goal of implementing new systems, onboarding new talent, and adopting new processes to improve both their operations and their interactions with customers.
As if the already speedy shift to online channels weren’t happening fast enough, the COVID-19 pandemic has accelerated the trend as businesses struggle to remain customer-centric in their approach, even if seeing them in person is no longer an option.
Three key areas are often identified as being at the core of a successful transformation:
Are you making use of the Internet of Things? Blockchain? Artificial intelligence? Understanding how new technologies can contribute to a digitally enabled business is essential, but many businesses of all sizes are also bogged down by legacy technologies – old that doesn’t always gel with the new – that makes integrating these systems increasingly complex on an SME budget.
Data and Analytics
Data is all around us, but does your business possess the insight it needs to translate it into actionable strategies? Creating actionable insights that enable the clean and efficient collection of data, not to mention its interpretation into actionable insights, is no easy task. It requires skills that few SMEs have an appetite for, despite the investment it represents.
Digital transformation can be achieved incrementally, but it does require a mindset that encompasses the entire business. One of its chief goals is to dissolve silos between processes and departments. To be truly transformative rather than merely useful, digital thinking and long-term planning must be the goal from end to end.
The Most Important Aspect: Leadership
But digital transformation for the SME is not always as simple as it seems. Although – as the old metaphor suggests – a large ship (read: a big, established company) takes more time and energy to change direction, they do have an enormous advantage over SMEs when it comes to digital innovation: resources. With large budgets and usually entrenched partners already working on aspects of digitisation – from HR and payroll to marketing and CRM, enabling digital strategies seems to come so much easier to those who already seem to claim the lion’s share of the pie.
But access to resources and high-end services is a tiny part of the overall puzzle. The real reasons that so many SMEs struggle to reach digital maturity lies in the business operationally, and the people at the top. Digital transformation efforts require a culture shift that must be led from the top. Large businesses will have a CIO, CTO, or innovation officer leading the charge, but such specialised executive roles are more rare in SMEs. From products and services to the very business model itself at all stops in the supply chain, manufacturing to marketing to customer experience, building the omnichannel experience that customers expect needs to be led with intention and built into processes throughout the business.
The Bottom Line
Through technology, businesses are constantly making improvements to the way they compete in a difficult marketplace, but true digital transformation cannot be achieved through technology alone. A complete overhaul of processes, leadership and culture is necessary to become a truly digital organisation able to enhance their operations and revolutionise the way they work.
Transform your business
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