What is Digital Transformation (DX)?
The world of work is becoming digital at heart. Businesses are undergoing sweeping digital changes and putting the software at the core of their processes. These changes give an insight into the digital world, which is moving away from the traditional top-down hierarchy.
Digitization in business is cutting along boundaries and allowing the economic benefits to flow. Technology is everywhere, and it is impossible to set up or run a business without it. Employees and customers are the two essential parts of an organization that wants work to be done easily. Both the internal and external aspect wants technological improvement to combat the threat of disruptions. And for this, investing in digital tools and solutions, re-strategizing customer engagement, and enhancing experience will drive your business towards a better digital economy. Every business actor wants a seamless experience and does business from around the world.
Change is inevitable and technological innovation leads the way for more innovation. As more innovation comes around the corner, it is essential to adapt and update products and services accordingly. This will reflect in acquiring more customers and having productive employees. Organizations must have adaptability and scalability as their core business model to seize the disruptive market. 75% of companies investing in digital technologies have grown faster than their peers.
Concisely, digital transformation is a multifaceted journey in all business areas. It is an ecosystem where operations and processes are carried out efficiently, and customer needs are diligently taken care of.
Why Digital transformation?
Before jumping into the buzz of digital transformation, Small and Medium-sized Businesses (SMBs) must know why it must transform. Else it is easy to fall into the myth of transformation that claims to bring radical disruption into the organization.
Digital initiatives can’t just be an integration of products or solutions in an organization. Neither purchasing new software packages nor making complex digital strategies will add to ROI. It must include the existing non-digital processes with new technologies to create or evolve new business solutions.
Start-ups and consulting firms can act as enablers in bringing in more data-driven insights. They will help draw better go-to-market strategies, provide digitalization solutions like product discovery processes, and further push the digital wave
Covid 19 pandemic accelerated digital transformation growth in almost every organization. According to a report by HP Asia, over 73%of SMBs in India were confident that they would bounce back post-pandemic.
Digital transformation went from ‘nice-to-have’ to becoming a critical aspect of businesses. Digital changes must occur at all organizational levels, including those with operational and cultural differences. The critical aspect while introducing digital transformation in the business process is to have reasonably priced products and services that can be digitally scalable and optimized for business growth.
According to an IDC research report, “By 2023, digital transformation spending will grow to more than 50% of all ICT investment from 36% today; largest growth in data intelligence and analytics”. Across organizations, shorter waves of tech changes are prioritized that increase operational efficiency and customer satisfaction to stay ahead of the curve. The notable benefits of digital transformation are:
- Corporate firms automate manual processes in important departments like HR and finance to bring more business opportunities. And to make a dispersed workforce engagement more productive digital technologies are playing a pivotal role. A hybrid or remote work environment is an enabler of service on demand that helps to enhance work performance and has more productivity improvement.
- Digital methods help to provide meaning to data-driven insights. Analyzing real-time data and feedback help organizations to have clarity on quantitative data and build business solutions around it. Smartly utilizing data is the most significant advantage of integrating digital capabilities in an organization.
Challenges faced by SMBs
SMBs are the key driving factor behind economic development. To make them hop on the digital transformation journey is critical to long-term success. It is essential to understand the pain points of SMBs, to have better clarity and help them make them more agile for tomorrow.
- The margin gain, labour cost, and limited expansion capital of proprietors are primary concerns among SMBs. And surviving through the competitors is a tough job. So, due to a lack of capital and a well-defined strategy, digital adoption often takes a backseat.
- Hiring digitally skilled employees, purchasing the latest software solutions, and upgrading to newer technologies such as cloud-based service providers is usually dreaded by SMBs. The dynamic nature of digital solutions makes them apprehensive about their decision to go with them.
- Moving ahead of the short-term strategy and focusing on the long-run ROI can be a reason for frustrating the SMBs. For example, opting for paid ads is a good idea when you create your small business page online. But the short metrics won’t make much difference if you don’t produce enough content around your products or services.
Digital transformation benefits for SMBs
Digital transformation has become necessary across all industries, whether enterprises, start-ups, or small and midsize businesses (SMBs). When it comes to SMBs, digital transformation played a massive role in bringing more revenue. According to the Microsoft-KPMG report, 59% of SMEs are moving towards emerging technologies like artificial intelligence (AI), machine learning (ML), and cloud computing.
Digital technologies improved economic value, and digitally enabled productivity tools like ERP and CRM helped achieve better customer reach. The benefits of digital transformation in SMBs are hugely driven by:
Using digital platform
As an SMB, you need to identify your critical technological shortcoming and target digital solutions that will provide agility, boost productivity, and improve data security. For instance, if your offline sales might be limited to a certain point and cannot move ahead, bringing products to the eCommerce platform will be a breather for you.
using comprehensive solutions
If you have budget constraints and a limited workforce, strategically planning your digital transformation journey will come in handy.
Instead of using disparate software solutions for different departments, you can opt for integrated solutions. For instance, with the help of an Enterprise Resource Planning (ERP) platform, you can eliminate time-consuming tasks and improve business efficiency.
Training employees
Internal employees and the customer-facing external team must be in the spotlight to progress in digital strategy. A small team is a plus for SMBs as it gets easier to address employees’ challenges at work. And customer experience can also be acted upon efficiently by moving the operations online.
Tech adoption has helped SMBs to further streamline their digital journey process by closely observing competitors, going through case studies, and having a deeper insight into market trends. Even eCommerce giant Amazon empowers SMBs to explore online services by providing Amazon Digital Suite, an ensemble of various digital operations.
Where to start with Digital Transformation (DX)?
Here are some key areas to get started with your transformation journey…
Business process automation
Identify the most painful areas within your business and start focusing on transforming them digitally so you start seeing its benefits. Even simple processes like approvals across business functions can be automated, resulting in reduced cycle times and improved productivity.
Business model transformation
There is a ton of evidence demonstrating how companies have successfully transformed the entire business model because the right technology was available. Amazon started off selling books online, locally. We all know how it has grown to be now. Ola and Uber have entirely transformed the transportation industry through the effective use of technology. Similar is the case with Swiggy and Zomato in the food delivery space. But before you start thinking about the business model transformation, it is vital to understand the evolving technology trends and how you can leverage that to transform your business. Once you have a clear idea, start slow and grow steady.
Organization Transformation
Any transformation, be it personal or organizational, must start from within. All your business functions, from Marketing, Sales, and Engineering, to HR, and Admin, must be prepared for the transformation. Unless all the functions aren’t part of this journey, the benefits from the digital transformation endeavour won’t be complete. It starts with a clear vision from the leadership, which is then percolated to the last member of the organization, taking into consideration their genuine concerns and challenges. Only this will ensure lasting change that yields the expected results.
Why Neekan
We at Neekan Consulting have been collaborating with our customers to address their business challenges ranging from business process automation to IT infrastructure planning and implementation. We take a holistic approach to transformation, working on all the critical aspects, including Strategy, people, culture, governance models, technology, and training.
To know more about our areas of expertise, check here or if you would like to contact us, Click here, to experience holistic digital transformation that’s tailor-made for you.