Digital transformation is no longer a thing of the future or a luxury for small and mid-size enterprises (SMEs). As COVID-19 triggered digital turning points across industries, the shift became a requirement to ensure short-term and long-term success.
70% of small businesses have already ramped up digital transformation to address the pandemic challenges, and companies that achieved the highest level of digital maturity are experiencing eight times higher growth than their counterparts.
So, how can SMEs effectively drive digital transformation and generate exponential growth? Below are four digital transformation tips that will set you up for success.
Every journey should start with knowing where you are going. Digital transformation requires a series of goals, milestones, and KPIs that are completely unique to your business. To determine your goals, first, you want to reassess your core business components—technology, processes, infrastructure, and organizational culture—and identify the opportunities for redesigning.
Too often, SMEs set up irrelevant goals under competitive pressures. Since every company has a different digital maturity level, culture, and core business processes, what works for your competitors won’t necessarily bring the desired outcome to your business. Your company’s goal could be the optimization of manual back-end processes, while your competitors’ goals could be cross-functional collaborations, agile process capabilities, or the launch of digital products.
After determining your goals, you want to figure out which KPIs will measure your progress. Most SMEs already have established KPIs which may or may not stay relevant through the digital transformation. For example, for one of our clients in the healthcare industry, the goal was to improve redundant and manual insurance coverage verification at optometry practices. Some of their existing KPIs (e.g. turnover time per staff, net promoter score) stayed relevant before and after the transformation.
If you merely focus on your immediate P/L impact, you might miss the opportunities for long-term growth potential. For companies to see the full benefits of digital transformation, it will take 5-7 years, and you need to be prepared for your KPIs to change along the way.
Don’t expect the initial digital transformation KPI to be finite and complete upon implementation — it takes iterative cycles, and production cycles, to perfect the transformation. No digital product will ever be "done"! - Jonathan Cardella
All of your staff must participate early and buy-in to your digital transformation goals. Then staff must be trained and supported prior to, during, and after the rollout. As Harvard Business Review eloquently put it, digital transformation requires technology, data, process, and organizational changes to function well together. And it’s your frontline workers, not C-suite executives, that will connect all of them.
Technology is the engine of digital transformation, data is the fuel, the process is the guidance system, and organizational change capability is the landing gear. You need them all, and they must function well together. -Harvard Business Review
To keep your employees engaged through the transformation process, you must communicate clear goals and avoid overly ambitious deadlines. Unrealistic deadlines can cause do-overs or partial solutions that don’t drive positive ROIs. Moreover, employees eventually start losing their trust in the leadership. To mitigate that risk, you should give your employees a realistic timeline for transformation and reward them for their ongoing efforts.
In today’s ever-evolving digital economy, what people want and what they are willing to pay for changes every day. So, you must embrace real-time customer insights to refine your business model and strategies to stay relevant to customers. This may entail a cultural shift for some SMEs. If your business focuses on establishing strategies and processes to enhance products or services that you have been known for, you might need to adjust to the new mentality of putting customers in the center of all the business components.
At Ventive, we leverage the MVP (Minimum Value Product) to ensure the digital products we’re building for our clients are perfectly aligned with end-users needs. By starting with the end in mind—a product that meets users’ immediate needs—we can deliver a product that’s a success from day one of launch. When your team stays connected to customer feedback, you will be able to determine whether end-users will see the value of the product. Plus you’ll have your team train for the customer-centric mentality.
When you roll out a new system or operational process as part of your digital transformation, we recommend having beta testing, incremental rollouts, and rollback plans.
For example, you can have at least a week or two to test out a new system while running your existing system simultaneously. In this way when you encounter unexpected problems, you can go back to the existing system or apply the insights to the rest of the implementation process so you will have fewer issues. This is extremely crucial for SMEs with tighter financial constraints so they can avoid hurting business if they fail any transformation initiatives.
All of the tips we’ve discussed above are extremely critical for SMEs to perform an effective digital transformation. However, it is a time-consuming process and certainly requires the right talent to make it work. It is costly to build an in-house team for successful digital transformation because talent is scarce and in high demand, causing a significant financial burden for SMEs.
Work with Ventive’s digital transformation experts instead. We have proven experience in identifying the right digital transformation journey companies need to take to move into the next phase of success.