More than 80% of small and medium business decision-makers agree or strongly agree that digital technology is impacting their businesses and industries. But as we discussed in this post, getting started on the path to digital transformation isn’t easy: only 24% of SMBs are currently executing on a digital transformation strategy.
This isn’t surprising when you think about the frenetic pace of innovation, the continual stream of new solutions, and the mountain of marketing hype that you need to sort through to put a solid strategy in place.
But putting on blinders isn’t a solution. In the digital era, companies must take advantage of data to remain competitive in the marketplace. Streamlining business processes, getting a more comprehensive view of the business and gaining new insights to achieve better outcomes is what digital transformation is all about.
Does Your Business Need a Digital Makeover?
If you’re relying on older, disconnected point solutions, entry-level software and spreadsheets to run your business, chances are good that you need to take a hard look at whether the technology you’re using is helping or hindering business growth.
Just some of the red flags that signal your current technology approach is dragging down the business include:
- Creating and sharing reports is tedious, time-consuming and error-prone. It’s hard to get the information you need, when you need it. Maybe it takes too long to create or customize reports for things like billing, payments, budget rollups or sales forecasts because people have to re-enter and reconcile information from different systems and spreadsheets—which also increases the risk of errors.
- You lack the visibility you need to make the best decisions. When businesses depend on a mix of different data sources, spreadsheets and reports, you can’t see how the different aspects of your business work together. It’s likely that different people will have very different views of what’s happening in the business, and find it difficult to reach consensus on key decisions. For instance, if you’re a services company, you may have billing inefficiencies that you can’t readily see that lead to missing hours and expenses. Or you can’t see why things aren’t working, such as why the tried-and-true promotions that used to work no longer do.
- Existing solutions don’t support expansion and growth. Without the ability to readily reconfigure business software to tackle new initiatives, your business will be slow—or miss out entirely—on new opportunities. For example, if you have an opportunity to do business in another country, you’ll need to be able to track exchange rates, convert currencies and consolidate financials. Or if you want to offer a new subscription service, or create a new channel, you’ll need to be able to support new financial, tax and logistics requirements.
- The technology you use feels old. Do employees complain about the software they’re using? People have come to expect that they can do very sophisticated things very easily with consumer apps—and increasingly expect that business apps will deliver the same type of user experience, both on traditional desktops and mobile devices. Can your business afford to frustrate employees—and turn off prospective hires—with dated applications and spreadsheets that don’t work well together?
If you identify with any of these situations, the risk of getting out-maneuvered by more agile competitors will only grow if you don’t take action.
Six Steps to Get Started on the Digital Transformation Path
SMB Group defines digital transformation as “how businesses use digital technologies to create new and/or modify existing business practices, models, culture and customer experiences to meet changing business and marketing requirements.”
Technology is certainly essential to digital transformation. But digital transformation encompasses much more than technology—it requires a shift in how you think about, manage and operate the business. Business strategy should be at the core of digital transformation strategy—the right technology solutions help to enable it.
While there is no one-size-fits-all path to develop a successful digital transformation strategy, here are some tips to help you to carve a successful path.
- Evaluate how the ground is shifting and prioritize business goals. Take a fresh look at what’s happening in the business environment. What’s changing in your business, with competitors, and with customers? Maybe revenues and profits are stagnant, or you’re finding it tough to recruit and retain employees. Perhaps a competitor has introduced a new business model or product that it is negatively impacting your company. Or you want to enter a new market, but you’d have to put so many workarounds in place to facilitate the move that you’re stalling. Zeroing in on specific issues and problem areas can help you set goals to sustain and grow in your market.
- Collaborate and communicate. Get input early and often from relevant stakeholders so that you’re not missing a key piece of the puzzle. Executive buy-in is critical, but it’s also crucial to involve employees who will need to adapt to new business practices and technology solutions. Remember to get feedback from your customers and partners too. Find out what they think you’re doing right, where improvement is needed, how their expectations are changing, and how you can better serve them.
- Assess your technology requirements. Will the technology solutions you use today help you achieve your business goals, or will they hold you back? Look for solutions that automate repetitive processes and readily provide you the information and analysis tools you need to make better decisions. Consult with trusted technology advisors who can provide clarity about how different solutions will help you meet your business objectives, and supply realistic details about the resources, costs and timeframes that deploying a new solution will require.
- Think of cloud solutions as your on-ramp to innovation. It’s no wonder that SMB adoption of cloud-based, software-as-a-service (SaaS) solutions has risen steadily over the years. Cloud providers offload SMBs from having to own, deploy and manage infrastructure and applications—enabling businesses to get up, running and productive with new solutions more quickly than comparable on-premises alternatives. As important, modern cloud solutions are built on open, flexible platforms, and provide real-time, consistent information. Cloud providers are also embedding new technologies, such as artificial intelligence, machine learning, internet of things (IoT) and more into their solutions. This means that customers can access these new capabilities within the applications they already use, instead of having to evaluate, purchase and integrate them on their own.
- Talk to peers in companies that are similar to yours that are successfully executing on digital transformation. Connect with people through industry associations and communities, and ask technology vendors for customer references you can talk with. Find out how they set goals, selected solutions, what they did right and any pitfalls they’ve encountered.
- Keep the big picture in mind. While it’s important to set priorities—whether to improve employee experience, streamline financials and planning or personalize the customer experience, you don’t want to end up with a more modern—but still disjointed—set of siloed solutions. Select technology solutions from vendors who build their systems with open, flexible technologies so that you can add new capabilities as you need to in an incremental, yet integrated manner. Aim to integrate workflows and create a more unified view of data from different areas of the company. This will not only help to streamline business processes, but to more easily see what’s going on in the business, and how what happens in one area can affect another.
Can You Afford to Stick with a Business as Usual Approach?
Technology solutions are supposed to make running your business easier and more efficient. But a tangle of older, disjointed solutions can actually slow down business processes and impair decision-making.
If you’re still unsure about getting started, assess the cost to your business if it doesn’t adapt. Consider that SMBs currently investing in digital transformation are 1.9 times more likely to forecast revenue increases than their counterparts with no plans for digital transformation and 1.3 times more likely to forecast increases than those planning for digital transformation.
Can you really afford to stick with a business as usual approach? Taking a fresh look at your business, the market and your customers and putting a digital transformation strategy in place will put your business on solid footing—now and in the future.
This is the second post in a two-part blog series sponsored by Sage Intacct that examines digital transformation for SMBs. The first post discusses what digital transformation is and why it’s important for SMBs.
Source: Laurie McCabe’s Blog