Digital Transformation: Best Practices for Small and Mid-Sized Businesses in 2021

How can you make the most from a minimal budget for digital transformation? Here are four digital transformations best practises for small and medium-sized businesses on a budget.

Can small and medium-sized businesses define cost-effective digital transformation best practices?

Is it possible to create a realistic digital transformation strategy that considers the organisation's corporate objectives?

How Can You Digitally Transform Your Business?

Most SMB owners are hesitant and question whether digital transformation best practices will help them reduce costs. However, experts say that it is a costly but worthwhile route to enhance your endeavours' impact.

Today, let's go on a journey through the top cost-saving digital transformation best practices for small and medium-sized enterprises.

We've seen that the concept of digital transformation varies depending on the size of the firm.

As an example,

Large corporations stated that 'Digital Transformation is a critical component of a well-defined strategy that ensures success.'

On the other hand, small to medium-sized organisations believed that "digital transformation is an overwhelming effort for small enterprises on a budget."

Our vote will be cast in this case on the belief of huge organisations. Because digital transformation and best practices are critical for early-stage startups and Fortune 500 firms to produce quickly and efficiently while minimising unnecessary investments and saving money on the total cost of ownership.

And, whether you're only getting started or looking to fine-tune your digital transformation, best practices may help and guide you to get the most out of your investment.

What Exactly Is Digital Transformation?

One of the most confusing terms is digital transformation, which means different things to different firms. For example, taking their brick-and-mortar business online may signify transformation for certain firms. However, adopting AI chatbots or advanced analytics technologies could mean transforming their business for a few more.

According to George Westerman, an MIT principal research scientist and author, digital transformation represent a fundamental reimagining of how an organisation leverages technology, people, and processes to change business performance profoundly. To put it simply, digital transformation is the use of digital technologies to establish, update, or modify existing processes, procedures, workflows, models, and so on. Companies digitally transform their businesses to create value, enhance efficiency, and streamline corporate operations to remain competitive and position a company for long-term success. The type of digital transformation an organisation intends to pursue is determined by its difficulties and ambitions.

Why Is Digital Transformation Important for Small and Medium-Sized Businesses?

Let us agree that digital transformation is the only method to address current business difficulties. It has already been demonstrated that digitally powerful firms have improved their supply chain, marketing, and sales processes. By 2023, this market is estimated to be worth $2.3 trillion.

According to a survey conducted by the SMB group, the following are the primary drivers of digital transformation for SMBs:

⚫Attract new clients

⚫Maintain your competitiveness.

⚫Increases productivity

⚫Saves money

Deloitte says, digitally mature small to medium-sized firms have benefited from increased income, improved customer happiness, staff engagement, and higher product quality.

Also, 42% of organisations believe that digital transformation for SMBs will help them change the game. Thus, they are enhancing the performance of the digital laggards' multi-fold.

Digital Transformation best-practices for SMBs on Budget.

Digital transformation best practices can be effective yet simple. Therefore, the implementation process can be simplified by choosing the best practices to increase the return on investment.

Here are four digital transformations best practices for SMBS,

When digital transformation is done correctly, it results in more efficient operations, more productive staff, and more satisfied consumers. Here are four best practices for digital transformation that you should follow:

1. Identify and Focus On Your Business Objectives. 

Every company's digital strategy is distinct, as each has its own set of objectives and obstacles. As a result, it is critical first to grasp your organisation's needs and issues. This can be accomplished using business process modelling, which can assist you in identifying gaps, difficulties, and potential hazards in your business processes. Only once you have recognised the exact demands can you begin to make the necessary modifications.

It is also critical to prioritise your organisation's demands once they have been recognised. Most SMBs have the misperception that digital transformation entails revamping all processes, workflows, and practices within the firm all at once. However, the real side is that digital transformation is a step-by-step process. It will be costly and unnecessary to transform everything simultaneously, such as migrating all of your data, software, and services to the cloud.

Rather, identify and document particular problems that require immediate care. This will allow you to implement changes in a planned and phased manner that does not put a strain on your business activities, resources, or customers. It will also make it easier to track and manage changes. Furthermore, even minor changes can have a huge influence on your firm and its bottom line.

2. Have Confidence in Your Stakeholders and Customers.

While digital transformation is primarily about digital technologies, it is not solely about technology. People are a vital component of successful digital transformation. Therefore, you must include all of your stakeholders in the process. They are made up of decision-makers from various departments, vendors, and employees. Involving your stakeholders is essential since they may have issues and points of view while introducing new technologies.

Assume you want to introduce a new tool that will assist your marketing and sales teams. It will cost money to install it and train the team. Your finance department may need to be persuaded of the higher charges. Your technology director may be concerned about the new technology's ability to integrate with other systems. They may also be unsure whether they have the necessary skillset to deploy the technology. Your marketing or sales team, who will be utilising the technology, maybe unsure how it will make their lives easier or bring in more clients.

Assume you want to install a new tool to assist your marketing and sales teams. It costs money to install it and train the team. Your finance department may need to be persuaded of the increased expenditures involved. Your technology director may be concerned about whether the new technology can be integrated with other systems. They may also be unsure if they have the necessary skillset to deploy the technology. Your marketing or sales team, who will be utilising the technology, maybe unsure how it will make their jobs easier or assist them in bringing in more consumers.

3. Keep a Focus On Data and Accuracy

While there is no question that data is essential, it is necessary to extract valuable insights from your data. This is what helps you exactly understand what your partners, vendors, and customers need. One challenge for many SMBs is to use available data, especially as data grows larger in size and complexity. Hence, it is necessary to unify and analyse data in a centralised system and make it actionable to create consistently enhanced and customised experiences to serve your customers better.

As a small business, you need not invest in expensive tools or platforms. There are several low-cost business intelligence tools available in the market today. Some of them include Zoho Analytics, Tableau, Microsoft Power BI, and IBM Watson Analytics.

Today's market offers a variety of low-cost business intelligence products. Zoho Analytics, Tableau, Microsoft Power BI, and IBM Watson Analytics are a few examples. However, SMBs should concentrate on the following areas to make the best use of data:

Breaking down silos between teams and departments and establishing a system that allows them to communicate with one another to bring data together

Digitising data workflows to improve data management

Using transactional, operational, and behavioural data from multiple channels and devices to drive decisions and personalise communications

4. Integrate Technology and Systems

Seamless communication between various systems within the organisation is of absolute importance for a successful digital transformation. However, a common mistake most SMBs make is implementing multiple disparate systems to address digital transformation needs. These disparate systems lead to a complex system that speaks multiple languages (different formats, inputs, outputs, etc.). This makes collaboration, upgrades, and maintenance a challenge. For a consistent, seamless digital approach, look for technologies and solutions that integrate well with your existing systems and offer comprehensive capabilities or are customisable when you scale up. You can also implement APIs that facilitate communication between business systems.

Collaboration, upgrading, and maintenance become difficult as a result. Instead, look for technology and solutions that connect effectively with your existing systems and offer broad capabilities or are adjustable when scaling up for a consistent, smooth digital approach. APIs can also be used to facilitate communication between business systems.

Also, digitising with ubiquitous technology like cloud, mobile applications, collaboration tools, etc., that your users are familiar with reduces costs and training time. You need to identify common applications and platforms for your users, standardise formats and processes for seamless information flow to ease communication, and power up your workflows with digital capabilities.

Final Thoughts

For small and medium-sized businesses, digital transformation may appear overwhelming. The trick, though, is to identify your top goals, start small, and take little actions toward altering your company operations. Then, following the best practices outlined above will assist you in implementing the appropriate technologies to enhance efficiency, reduce costs, and provide better client experiences.