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Office Tech

Simplifying Digital Transformation at Your Small Business

Digital transformation offers something for every company -- although that something may be different in every case.
Simplifying Digital Transformation at Your Small Business
Image credit: Sunwoo Jung | Getty Images
Guest Writer
Co-founder of Techincon and Senior Business Consultant for Microsoft
6 min read
Opinions expressed by Entrepreneur contributors are their own.

Every company can benefit from digital transformation, but that doesn’t mean every company should change in the same way. Digital transformation means different things to different people. The right path depends on the needs and opportunities of the business asking.

According to the “2017 U.S. Small and Medium Business Digital Transformation Study” from SMB Group, 48 percent of small and medium businesses plan to transform their businesses to operate in a digital future. The same study found that around three-fourths of companies surveyed agree that digital tech is changing how they do business.

Fortunately, digital transformation doesn’t require businesses to move every process to the cloud, nor does it require them to invest millions of dollars in brand-new tech -- a critical note, since more than half of SMBs plan to use current IT budgets to fund their digital efforts. The most effective digital transformations leverage existing infrastructure and find maximum value in the most sensible improvements.

“Digital transformation is not an all-or-nothing shot,” according to iCorps Technologies, a strategic IT consulting company. “Many organizations take a multi-year journey, tackling the initiatives they believe are most critical right away and creating a road map to accomplish the rest within a reasonable budget that works for their business.”

Related: Helping Entrepreneurs and Small Businesses Make the Digital Transformation

What the heck does ‘digital transformation’ actually mean?

Digital transformation is a catchall term that includes a wide variety of goals. For some companies, digital transformation means leveraging cloud capabilities. For others, artificial intelligence and machine learning are more important. Increased analytics capabilities and Internet of Things implementations play roles as well.

The point of digital transformation is not to take companies from paper processes to hyper-advanced and complex digitized alternatives. On the contrary, many components of digital transformation are subtle. Even the most technologically challenged business owners, given a bit of time, can lead an effective digital transformation with the right mindset.

Company goals and challenges dictate the type of digital transformation to pursue. A company that seeks more customers, for instance, might consider how to implement new tech to improve the customer experience. An online chatbot or a user-friendly app might do the trick, or perhaps a business’s first step is to create store listings on Google and Apple Maps.

A company struggling to optimize its partner network, on the other hand, might invest in more analytics tools to make better choices about shipping and vendors. It doesn’t matter whether the company sells software or gravel: Digital transformation is for everyone.

Businesses considering digital transformation should ask themselves where their threats and opportunities lie. Have comparable industry players already made moves toward digital transformation? Have customers begun to demand options that the company cannot provide today? Rather than wait for market influences to force their hands, though, businesses should proactively pursue digital transformation to stay ahead of the game.

Don’t be afraid of digital transformation -- get excited. Done right, a digital shift can lead to increased savings, happier customers and better prospects in both the short and long term. Follow these three tips to design and execute a digital transformation strategy that creates lasting benefits:

1. Confront employees’ concerns head-on.

Most employees are set in their ways: In SMB Group’s study, 27 percent of leaders cited their team’s resistance to change as a top challenge. To make the change go as smoothly as possible, talk to employees about why the company is moving in a digital direction.

Some employees worry that digital transformation will eventually cost them their jobs. Business Wire reports that 35 percent of millennials share that concern. Speak honestly with employees about how the company envisions its future and what role employees play in that future.

Talk to people about the red flags, such as waning customer referrals, that make changes necessary. Show employees how new tools (such as cloud databases) will make their jobs easier but not redundant. Lastly, make sure to offer training courses to employees for any new technologies. As for those concerned millennials, nearly two-thirds who manage automated processes are confident about achieving their career goals, compared to 37 percent who stay away from the technology.

Related: Ten Key Pitfalls To Avoid During The Digital Transformation Process

2. Plan a strategy that will save you some coin.

Pennies saved are pennies earned, even for companies with growth goals. Before taking on new debt to tackle grand opportunities, consider how digital transformation could make existing processes cheaper and easier.

Humberto Farias, co-founder at software company Concepta, recommends that SMBs take advantage of simple tools with high potential impacts, such as predictive analytics for ad spend. Small companies can’t afford to sink money into suboptimal campaigns the way big ones can. With a predictive analytics tool that integrates with existing tech, small businesses can stretch their advertising dollars much further.

Similarly, implementing customer relationship management technology is a digital step that can grow your business. According to Salesforce, growing SMBs are twice as likely to be utilizing a CRM than their struggling counterparts. CRM costs start at $10 per user per month, with many CRM providers offering affordable cloud-based solutions for small businesses.

3. Work with someone who has been there, done that.

SMB Group reports that 33 percent of SMBs don’t have digital transformation strategies because they need some help. Don’t wait for the competition to make the first move -- find a technology partner with experience in the right areas.

Bigger companies can afford to staff robust IT departments, but smaller companies don’t have that kind of cash. By outsourcing, small companies can maximize their resource pools and only pay for the aspects of digital transformation with the greatest impact.

A good technology partner will recommend in-budget solutions that are compatible with a business’s infrastructure. Ask potential partners whether they have experience with small businesses, who at the vendor will be responsible for communications and what kind of preparations the business should make ahead of time.

Digital transformation isn’t some vague buzzword. For small businesses, digital transformation includes all the little steps forward that add up to massive cost savings, happier customers and improved prospects. Look for areas with easy opportunities for big improvements, and then use these tips to turn those potential gains into reality.

Related: The Pursuit of Digital Transformation

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