For the last 5 years, big tech companies like Adobe, Microsoft, Salesforce, and Google have talked about the term “digital transformation.” The idea being, moving old systems into the digital and virtual world. At the large company level, those changes were accelerated with the events of 2020.
“We have crammed 2 years of digital transformation talk into 2 months,” said Satya Nadella, CEO of Microsoft. The shift has predominantly been led by big business, but what about small businesses that make up 99.9% of all businesses in the U.S.?
A survey of 1000 small business owners from the SMB group showed that overall, 54% of SMBs plan to spend more on technology in the short term future. In addition, 70% of businesses with 100+ employees are planning to invest more in technology.
Why are small businesses investing in technology and digital transformation?
With the increased demand for talent and keeping people, small businesses are most focused on keeping their employees productive and happy. As a result, 36% of small businesses said that they intend to invest in digital transformation to improve employee productivity.
Customers are first in digital transformation.
Beyond employee care, businesses are focused on improving customer relations. For example, 35% of them said increased customer demands, and 34% said seeking to collaborate more externally with customers is the reason for pushing toward digital transformation.
The need to connect with customers and keep employees happy will continue even more in a remote work environment. Jobs in their geographic area no longer limits these people. The careers related to remote work are most definitely related to tech and other office-related work, but there could come a shift more towards those roles being in trades as well. For example, a plumbing company might offer a “remote” video interaction to diagnose a problem before sending a technician. We already see this with doctors and lawyers doing meetings or exams over Zoom.
What are the biggest challenges with technology and digital transformation investment?
Investing in digital transformation will definitely help a business. It isn’t always easy, though. It can take time to make sure you get it right and that it improves your business. Small businesses also have several concerns.
Security is a big concern.
According to the same survey, 40% of businesses are concerned with security issues. As a result, these businesses will have to familiarize themselves with the security options available with technology investment by housing customer data on the cloud, collaborating more externally, and with less direct control.
Over one-third of those surveyed mentioned “hard to figure out” as their primary concern. Many of these businesses, even tech-related ones, may not have the direct experience in setting up the operations and specific products that could lead to success.
What is the value people expect from investing in technology?
If you invest in something, there is an expectation that it will make your life easier, improve the quality of your product, connect you better with customers, and improve your bottom line. In addition, the small businesses surveyed want to “attract new customers” and “improve financial management and forecasting.”
Improving your company can start with digital transformation. It can help with forecasting revenue, reducing costs, and improving salesforce and marketing. This is done with tools like automation, cloud computing, programmatic ad buying, and others.
How can small businesses take the leap?
Companies that invested in digital transformation and technology outperformed their peers by 58% in revenue, according to SMB. These businesses were also able to reduce costs.
With companies jumping on the trend, these tips can help with the transformation journey of a small business.
Create Goals – What do you hope to accomplish with becoming more digital-focused? It can help to start with 1-2 driving forces. Those could be higher customer satisfaction, reducing costs, increasing revenue, etc. These goals will help push through the harder upfront time and investment it can take
Be Customer-led – Even if customers aren’t a part of your “goals,” you should involve a few as a sounding board. In the tech space, these are called “customer advisory boards,” built up of loyal customers who can provide feedback on changes to help hone the process.
Work with someone to help – There are many companies out there who support small businesses and help with the transition. Whether you are a dentist, lawyer, owner of a home services company, or other general leaders of a small business. You can find someone to help with marketing, automation, IT, and other ways to improve your business.
Identify tools – After you have identified your goals, what customers you trust for feedback, and if you want to work with someone for implementation, you will want to identify the tools you want to invest in.
It could be an automation platform to help connect you with your customers more, or a digital platform to manage your contacts and show you revenue growth or move your customer data from the filing cabinet or program to the cloud for easier access and connection other tools.
Tools are going to be a key component of growth with digital transformation. They will help you move faster toward your ultimate goal.
- Feedback loop – Add more people to your feedback loop, customers, or other close contacts in the business. The more support you have, the easier it will be to manage the load of moving toward the digital world.
- Optimize and improve continually – Once you have your 1-2 systems initiated, make sure to analyze and improve upon continually. You should look to see if it has the impact you want it to. Suppose it does not determine how you want to change.
What’s next for digital transformation?
Digital transformation is such a crucial piece in the future of work and business. It extends beyond just large size companies.
Small businesses will continue to invest in technology. Adding automation, cloud storage, and other digital-first options will improve business. It will create a better connection with customers, reduce costs, and improved revenue efficiency.
It can be a long road toward complete digital transformation. But, by now, we know we can all do hard things and operate in a growing digital world.
Just don’t forget to include your customers and others to support your business in your digital transformation journey.
Image Credit: eren li; pexels; thank you!