We’ve had some amazing feedback on our recent blog, ‘Digital transformation powering SME high-growth’ with several of our alumni asking for more information on some of the concepts.
More and more businesses are having to get to grips with digital transformation. Not only does this mean getting up to speed on the latest digital trends but then staying ahead of innovation to meet rising demands.
What is it? Why is it important, and what’s the benefit for SMEs?
Digital transformation is the integration of digital technology into all areas of a business. The idea of “DT” is to fundamentally change how you operate and bring value to customers.
In reality, we’ve had the “digitising” of business functions for decades. Consider the banking sector. Decades ago, all transactions involved human customers and human bank tellers. Then came ATM technology, mobile and online banking and cashless payment systems to modernise an antiquated way of doing things.
DT does not simply seek to “digitise” for the sake of it but is predominantly driven by either improving operational efficiency, improving customer experiences in interacting with the business and consuming the product/service, or adding value to new or existing customers that gives an edge over competing businesses.
The global events of 2020 have forced organisations of all sizes to address their digital capabilities and change the way we do business. And organisations are embracing that change.
93% of global executives believe that digital is critical to achieving their strategic goals (McKinsey) while 77% of CEOs say that COVID-19 sped up their digital transformation plans (Deloitte) and 79% of corporate strategists claim to be digitalising their businesses to create new revenue streams (Gartner).
Changing tech for changing customers
What will be of interest to SMEs is how DT affects the customers themselves. Consumers choose the way they want to discover, interact, select and maintain a relationship with a business. Quite simply, if you are not present where the customers are, you are not willing or able to communicate with them on the channels or way they want to, or have the ability to truly know your customers on a personally informational level, you are in the stone-age in terms of business today.
‘SMEs tend to digitalise general administration or marketing functions first. Business surveys on ICT use show that the digital gap is smaller between SMEs and large firms in their online interactions with the government, in electronic invoicing or in using social media or selling online,’ according to the OECD. The tools used are also more readily available, easier to utilise and implement, and cheaper than ever before.
If you can use digital transformation to give customers a better experience and connect with you easier, then choose to make it a business priority – or someone else will. Kiwi business owners understand the importance of digital technologies to achieve their strategy and objectives, but many do not necessarily know what this means in the context of their business, or where to start. They know ‘why’ but need support with ‘what’, ‘how’ and ‘who’.
Digital Transformation can seem daunting. Many SME owners and leaders feel that it's not relevant to them or their business. However, the chances are that you are already immersed in many of the processes and behaviours associated with digital transformation.
For information on how The Icehouse programmes, workshops and coaching and advisory services can help your business, click here.
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