Printing is not a business we typically associate with digital transformation. After all, the word “print” is often used as an antonym for “digital”. Yet my recent experience with printers demonstrates the benefits that digital transformation brings to customers and businesses. It is also a cautionary tale of the fate that awaits organizations which remain static.
It started with a need to print a new set of business cards. I could have used the traditional approach of exchanging a series of emails with my printer to place my order. Instead I decided to try a new printer that I found on Google. They had a friendly website which provided a step-by-step process to choose my preferred paper size, thickness and colors, and upload my graphics. Within minutes, I had placed my order. The next morning, I was sent a link to approve the proofs online. I received the cards in the mail a few days later.
All this was done for a fraction of what I would have paid my previous printer, and it was faster and more convenient. I followed up with another print order a few weeks later.
This is a simple example of how companies that do not digitalize their interactions with customers risk losing them to those that do.
What is digital transformation?
Digital transformation is the integration of digital technologies into all areas of a company, making processes more efficient, and improving employee and customer experiences, so as to gain a competitive edge. It is not simply the implementation of IT systems. It requires cultural change within the organization. Companies must be prepared to continually challenge the status quo, and allow their employees to experiment, fail and try again until they find breakthrough solutions.
Digital transformation has already taken place in the consumer space. People communicate using WhatsApp and WeChat, book rides using Grab and GoJek, and share experiences using Instagram and LinkedIn.
In the past, businesses were seen as either technology companies or traditional firms. Now we all need to be “technology-first” companies to thrive in this digital world. Businesses which insist, for example, on accepting orders only by telephone will lose out to rivals which provide more seamless digital experiences to their customers.
Digital transformation an existential issue for companies. It is therefore incumbent upon CEOs to lead the push for digital transformation in their organizations. They should expect pushback, however, from some quarters. Transformation may make some roles redundant, even as exciting new opportunities open for those who are prepared to adapt. Leaders have the responsibility to help their people seize those opportunities.
Barriers to digital transformation
Most companies recognize the need for digital technologies to transform their businesses. However, many are held back by barriers — both real and perceived.
First, the perceived high cost. When SME leaders read about the millions of dollars that large corporations spend on digital transformation, it is natural to feel overwhelmed. However, digitalization does not have to gobble up the next few years of profits. With cloud-based software, there is no need to procure expensive servers or hire more system administrators. Companies pay per user and subscription costs can be spread over the lifetime of the software.
Second, the lack of urgency. This is a mindset issue rather than a statement of reality. Some bosses may think there is no urgency because their bottom line remains healthy and they are managing fine with their manual processes — or at least they think their staff are coping. However, they are missing huge opportunities to leapfrog the competition.
Third, many SMEs they do not have the resources to hire skilled data scientists or engage expensive change management consultants. However, cloud-based software can do much of the heavy lifting of optimizing business processes, analyzing data and producing insightful reports, without any increase in headcount.
How SMEs can implement digital transformation
For many SMEs, digital transformation can be a daunting task. However, in many ways, SMEs are well-positioned to transform because they are smaller and nimbler than large corporations.
Here are five suggestions to help SMEs along in their digital journey.
One, embrace digitalization. Digital transformation will fail if management does not embrace, internalise and lead it. SME leaders should take a personal interest in the subject. There is a wealth of resources available online at little or no cost, including seminars, books, articles, podcasts and videos. Leaders will need this knowledge to draw up digital transformation roadmaps and rally their troops.
Two, identify areas for transformation. Start by focusing on two key stakeholders: customers and employees. Study how your customers make their purchases, and how your employees perform their tasks. Diagnose their pain points, then employ technology to make processes more seamless for them.
Three, prioritize core functions. Don’t dive into artificial intelligence or big data analytics from the get-go. There is no point hiring an expensive data scientist before you even have the tools to collect data on your customers. Most SMEs already have basic finance and payroll systems in place. The next step is to automate the core human resource functions like leave, claims and performance management, and get marketing automation and customer relationship management systems in place to reach customers more effectively.
Four, pick suitable tools to do the job. Don’t re-invent the wheel; there is probably something in the market that meets your needs. However, be prepared to adjust outmoded processes to fit industry best practices. Custom-build solutions only if you cannot find a suitable product in the market.
Fifth and most importantly, prepare your people for change. People management is probably the most challenging aspect of transformation. However, you can lessen the pain if you prepare your people well for change. Explain how digitalization will improve their performance and grow their careers. Take time to listen to their concerns and make adjustments to your plans. This builds trust, which is an essential commodity in times of disruption.
A journey, not a destination
Digitalization is vital for businesses, but fraught with pitfalls. A disappointingly large proportion of SMEs report that their digital upgrades fail. Far better to start small and clock up small wins, and then build upon these successes.
After all, digital transformation is a journey, not a destination.
Learn Anchor is a cloud-based HR productivity platform for SMEs. It reduces your HR admin workload, freeing up your time to focus on your core mission — serving your customers and growing your revenue.
