Ultimate Guide to Digital Transformation for Small Businesses

In short, digital transformation (DX) is an opportunity for small or medium sized companies to not only future-proof, but prosper. And for businesses looking to get one step ahead of competition, delaying the inevitable shift from legacy to cloud, or paper to digital, will have damaging consequences further down the line.

This has been further demonstrated by the pandemic, with remote capabilities, cloud and digitalisation now more important than ever. According to a McKinsey survey, almost 65% of companies say they need to build new digital channels and outlets to ensure their business remains economically viable in 2023 and beyond.

Furthermore, while 28% of organisations say they will invest in tech to keep up with competitors, over half say their investment is to differentiate themselves in a crowded space.

Transformation is not just about survival anymore, but about creating a unique offering and becoming a true market leader. COVID-19 has dramatically increased the speed at which digital impacts businesses and their success. But like any change that occurs in industry, with transformation also comes a number of challenges. In order to navigate this journey, we’ve created a detailed guide to help you out.

Here is everything you need to know about kick starting the digitalisation process, and building a transformation culture where people and technology work together…

Digital transformation – or DX – is the adoption of technology by an organisation, with a goal to improve efficiency, value or innovation. By enhancing organisational processes, culture and customer experience through technology, businesses can meet changing market demands in the digital age. Common technologies include things such as mobile technology, cloud, IoT, automation, artificial intelligence and machine learning, augmented reality, and others.

According to Deloitte, the definition goes something like this…Digital transformation is the end-to-end business transformation of an organisation, from strategy to operations, from leadership to enterprise-wide culture; enabled by exponential technologies.

Similarly, McKinsey describes transformation as: An effort to enable existing business models by integrating advanced technologies.

While the big focus for companies is digitising for the purpose of improving operational efficiency, the heart of transformation is very much about people. In order for digital change to work, there needs to be a shift in culture, and this requires organisations to continually challenge the status quo and take risks.

This could mean walking away from long-standing business processes that have worked in the past, leaving behind outdated concepts which the company was once built on, or experimenting with different ways of doing things. All of this requires buy-in from employees, and a willingness to evolve in the workplace. In this sense, we could also define DX as a mindset.

The road to transformation is an important journey for every business, no matter their size or industry. In short, DX can help organisations:

• Operate with better speed, efficiency and accuracy
• Cut costs and reduce operational overheads
• Improve customer experience, increasing retention and loyalty
• Boost team and cross departmental collaboration
• Support digital revenue streams (or find new ones)

According to business leaders, the top three benefits of having a solid digital transformation strategy in place are improved efficiency (40%), faster time-to-market (36%), and the ability to meet growing customer expectations (35%).

But what’s been made clear with COVID-19 is that digitisation is very much, and always was, a time-sensitive issue. Businesses have had to tap into digital channels in order to survive as bricks and mortar shop fronts and face-to-face meetings came to a halt. Today, the message is: go digital or go bust. There are now 5 billion people online and over 90% of people in developed countries have access to the internet. There’s also a staggering number of users shopping, comparing and checking reviews on social media, not just websites.

On top of that, there’s an ever-increasing number of ways people access the internet, such as mobiles, tablets, virtual assistant devices and computers, and this will only continue to grow. If there’s ever been a time to invest in digitalisation, it’s now.

While DX is advantageous for businesses of all sizes, smaller companies may be the ones to see a faster return for their efforts. This could be because a cultural shift is often easier when the business is less established, and processes are less ingrained.

It’s important to note that 55% of start-ups have adopted a digital business strategy, compared to just 38% of traditional companies. So the opportunities are there. Here are just some of the ways a small business could benefit from having a digital strategy in place:

1. Efficiency : Small businesses looking to scale will be able to boost efficiency and productivity, as well as accuracy.
2. Decision making : Digital makes insightful data possible, helping business leaders make informed, data-backed decisions for better outcomes.
3. Agility : Data also allows companies to respond to market fluctuations, helping them adapt and seek out emerging opportunities.
4. New business : Digitalisation helps brands reach new audiences, raising awareness and nurturing prospects through the funnel.
5. Customer loyalty : With improved customer experience comes repeat business, and customers who are not only loyal, but are your brand advocators.

Digital doesn’t have to be disruptive, and it doesn’t have to be hard. For a lot of smaller businesses, adopting a focused and strategic approach is key. Our advice is “don’t try to solve everything at once” – you can rollout your journey in phases.

Here are the five key elements of successfully digitising your business:

1. You MUST have an online presence

The move from analogue to digital is now a matter of survival. As more people shop, buy, research and connect with businesses online, the more important having a digital presence is. If you’re not online, you may as well not exist. Even if you have a longstanding and loyal customer base offline, having a website and social media pages is critical for bringing in that new generation of customers.

Badly design websites can be just as detrimental to your business. If your site is slow to load, isn’t optimised for mobile, has poor navigation, is difficult to navigate, or confuses your brand identity, users will leave in a matter of seconds and go somewhere else.

Website design and development services can give your business the right impact, building innovative, functional and easy to use websites that users love. If your current website doesn’t showcase everything you do or garner the leads and sales you’re after, it’s time to rethink your website strategy.

2. Create a digital marketing strategy

Digitally transforming your business means using technology to continuously evolve all aspects of the business model. This includes what you offer, as well as where and how you interact with customers.

A beautifully designed, functional and easy to use website is only effective if people know how to find it. If you’re not getting any traffic – or if you’re getting traffic but it’s not converting – having a strategy in place can help.

A digital marketing strategy can help you optimise your website for search engines through content generation, and attract high-converting customers with techniques such as Pay Per Click advertising. It’s also important to have a social media presence, as customers demand a multi- or omni-channel experience with brands, so make sure your brand can be experienced across all channels.

3. Invest in high quality content of every kind

Successful digitalisation means finding new ways to communicate with your audience, across a range of platforms. Your content needs to inspire, inform and provide useful answers and solutions to customer queries and pain points – and it has to be available everywhere.

The ultimate content marketing approach is to cover all bases, from your business blog and social media to external publications. By making it easy for customers to gather information and connect with your brand (even outside of 9-5 office hours), you can deliver the digital experience that your audience craves. And in order to optimise your site for search engines, make sure your content is of the highest quality, has the ability to engage and keep readers on the page, and is being frequently generation to keep things fresh.

On top of written content, consider bringing video content and live streaming content into the mix, as millennials and Gen Z like to consume content on-the-go.

4. Digitise your documents – no more paperwork!

Paperwork is a drag, and no-one really enjoys it. Office workers spend over 50% of their day searching for files or information, according to new research. As if that wasn’t bad enough, Gartner reports that one out of every 20 documents is lost – and around 25 hours are spent recreating each lost document.

By digitising your documents, you can remove the burden of manual filing and handling, and streamline processes.

5. Identify, optimise and automate

Technologies like automation form the bedrock of transformation. Automating businesses processes and removing the burden of paperwork is the exact definition of “end-to-end business transformation” as described by Deloitte.

Ultimately, removing manual processes prevents bottlenecks and boosts productivity, while saving your business time and money!

6. Leverage your customer data

Digital transformation begins and ends with the customer, and this is why data matters. When you digitise and use online collaboration and communication platforms to share, store and upload information, you get to manage who sees it and how it is used.

Customer data already exists within your business, but tapping into it is a different story. Once you have access to it, you can break down data silos, improve decision-making and improve customer experience through data analytics.

All this sounds great, right? Well here’s a hard pill to chew on – 70% of transformation efforts fail, according to Deloitte. But as Deloitte points out, most failures are not caused by technology, but by people. If you want to ensure your DX projects achieve the desired results, here are the steps you need to take:

1. First, define your vision : Start by assessing your key problem areas. Which workflows do you experience the most difficulties with? What skill or technological gaps are causing you to be less efficient? How many processes and repetitive tasks can be automated and streamlined? Be clear about your desired outcomes and create a comprehensive digital transformation strategy that aligns the goals of all stakeholders. This should be a detailed blueprint with timescales and clear-cut steps. Define the processes, systems and people needed at every stage of your transformation journey.
2. Gather resources and expertise : Conduct thorough research about the different technologies and services available to you, and assess your existing expertise. Hiring external partners is essential for cloud adoption, business management systems and software, web and app development, automation, digital marketing, and much more.
3. Invest in the right tech : Digital adoption strategies are a big task, and there’s a high risk factor when spending a large portion of your budget on enhancing your tech stack. So in addition to choosing the right technology, you also need to choose the right partners to support you and help maximise performance and ROI. When choosing digital tools and platforms, remember that employee user experience matters. Bespoke systems can often be the best solution, as this allows you to tailor digital tools and resources to the exact needs of your team.
4. Prioritise your people : When it comes to technology, people have to come first. Any digital transformation strategy must include plans for change management. In order for your technology to work and bring you the desired results, your teams have to be on board. Initial and continued training are essential for transformation success. Accepting employee feedback is also important if you want to minimise change resistance within your workforce, so promote open discussion, welcome suggestions from all departments, and nurture collaboration between teams.
5. Have metrics in place : Measure and continue to keep measuring various KPIs throughout the transformation journey. These metrics will look different to every company, so keep going back to your goals to understand the best ways to track progress.

One of the most critical phases of building your digital transformation framework is preparing for potential challenges. Here are some of the most common barriers to success:

Outdated organisational structure

Research by Gartner tells us that existing organisational structure is the biggest roadblock for transformation. Even if you have planned your transformation journey meticulously, governing organisation-wide change can be challenging.

According to McKinsey, organisations with open communication between senior management and other members of staff are 8x more likely to be successful! Don’t let an outdated hierarchy hold you back. Promote transparency and create a safe space where employees at every level are able to voice their thoughts and opinions.

Lack of collaboration

Traditionally, different departments and teams within a business operate in silos. This means that data is not shared across the organisation, resulting in various business functions being misaligned in their priorities and goals. Not sharing data also leads to the doubling up of work, negatively impacting operational efficiency and productivity.

Digital skills gap

If you are dealing with a talent gap, consider bringing on external partners with the right skills and experience. For many small and medium sized companies, digital expertise may not be available in-house, and recruitment can be both costly and high-risk.

By bringing on an external team of experts, you can minimise risk while having access to the right talent as and when you need them.

Employee resistance

The human side of digitalisation can often be overlooked, but as Gartner reports, almost three quarters of workers experience medium to high stress when their jobs are effected by change.

Applying change management prepares, equips and supports people, so they can successfully adapt to new ways of working. By working with your employees, and not against them, you can minimise resistance and increase compliance.

Enabling a shift in culture is a must for your digital strategy. Employees are the backbone of a company’s productivity, so your digital transformation framework has to include steps for cultural transformation too. Here are some important considerations:

Transformation begins at the top

If you want people to change their behaviours or attitude, lead by example. Your business must have leadership alignment, and managers must actively adopt new processes or digital tools and platforms.

Appoint transformation champions

Sometimes it helps to have a dedicated ambassador or champion within your business to help rally everyone and keep teams motivated in working towards your company’s transformation goals.

Take calculated risks

Companies that embrace digital transformation are usually more comfortable with risk-taking compared to their less digitally mature peers. But remember that all risks must be calculated – this means assessing risk probability, risk impact and reward.

Training is not a one-off

Change management and training for employees have to be in place at every stage of deployment. This includes before, during and after rollout. A study by Google tells us that nearly 70% of successful change management programmes provide workers with training and support before and after project go-live.

Value feedback and recognition

Create a safe environment for employees to provide their feedback about transformation projects, and continually monitor and give feedback and recognition to employees. Openness and transparency are key if you want people to embrace change.

In addition to choosing the right technologies, working with the right partners, and having a transformation blueprint to guide you in your journey, businesses must also create a harmony between people and technology.

This is because people are the key to nurturing your bottom line. In fact, organisations that take change management seriously and focus on their employees surpass ROI goals by 143%. This is compared to just 35% of expected ROI for companies with little or no change management in place.

If you’re a small business looking for help with your transformation journey…

Get in touch with Identify Digital. Fill in our online contact form to find out more about how we can help you automate, save time and money.