Adapting to the current scenario with digital transformation and technological developments has helped Small and Medium Enterprises survive and thrive.
Digital transformation has taken a leap in the current pandemic situation. It has become a necessity rather than just an advantage. Adapting to the current scenario with digital transformation and technological developments has helped Small and Medium Enterprises survive and thrive.
Current Situation and E-Commerce Industry
A recent study showed that the e-commerce industry has not grown so much in the past ten years as it has grown during the pandemic. Now, the customers are instantly gratified because everything is at their fingertips. Customers have adapted to the e-commerce way of shopping. With customers getting so used to everything online scenario, businesses have little choice but to go online.
E-commerce is here to stay and will not go, but it will coexist with physical stores. The pandemic has given rise to the necessity of omni or multi-channel presence for a brand. Customers want both online and offline presence. The ideal thing to do for a business today would be to brainstorm on how they can build such a model.
What is Digital Transformation?
Businesses believe that a website or social media marketing becomes a digital transformation. But in reality, digital transformation is not limited to that. It is a complete process, a complete operation of coming digitally. It’s a paperless transformation. Customers and the supply chain both get digital access with digital transformation.
SMEs have an advantage over large companies in this area. They have agility where they can quickly move through processes.
Why Do Businesses Need to Digitally Transform?
The current pandemic has given a shocking awakening to businesses. The fact is that the only businesses that quickly adapted to digital transformation and developed technologically have survived and are reaping benefits. Digital transformation has become a necessity, not a luxury. Each day is a new challenge, a new environment and with such a scenario, innovation and evolvement have become vital.
About 35% of the total GDP comes from SMEs that are the pillars of the economy. Therefore, SMEs must evolve quickly and thrive.
The pandemic has led to lockdowns. Though the losses because of this are huge, the positive thing is that the extra time because of the lockdowns could be used to enhance and develop skills and learn new things. This is needed for the reinvention of business to keep it afloat.
Many technology-oriented solutions can help MSMEs in ways to overcome the crisis. Social distancing and online shopping are replacing physical stores. Starting with simple technological changes will take businesses a long way. For instance, adopting basic versions of CRM software, or adopting video conferencing through Google or zoom, or even carrying out email marketing and social media marketing.
Now is the right time to experiment with different digital tools and exploring them to reap the benefits in the future.
Advantages of Digital transformation
- It gets new customers and the business outreach grows.
- It gets back the existing customers through an accessible channel.
- It streamlines the supply chain.
- Employees need an interaction programme during these times. Digital transformation also helps in change management.
- It gives access to funds, reduces operational costs, and therefore gives financial stability.
How can SMEs Digitally Transform?
Digital transformation needs to be goal-driven, a goal that the business is looking forward to. Companies could be entering a new product or a new market or forming a new customer base. Depending on what is the business goal digital transformation is managed and planned.
Step1. Identify the leader and decide how the company can transform completely. It is a strategic move and a lot of agility needs to be planned.
Step2. The executive part plays an important role. The executive needs to change the mindset. They have to unlearn and relearn to sync with digital reformation. Hence, change management also needs to be done.
Step3. Finally, it has to decide what are the things that could be adapted. Adapt to things that align with the business goals. Also, get social media, website, processes, and operations in place.
ROI and Digital Transformation
Return on Investment is usually calculated as the number of months to positive return and minimum percentage. In the case of SMEs, it is not a zero investment. Though there is no monetary investment, a lot of time is invested and when there is a time investment, factors like time to market, revenue, and growth of numbers need to be considered.
Tips and Tricks to Get Digital Experience
In a recent survey, it was seen that about 70% of MSMEs are offline. The reasons are unawareness, the non-availability of digitally equipped manpower, and the assumed expenditure on digital transformation. These are myths. There are several ways through which you can get a trial of many of the digital tools without any costs.
Cyber Security and Sustainability Challenges
Every opportunity comes with a threat. Cybersecurity is a challenge in the case of digital transformation but every challenge has a solution.
Firstly, the basics need to be focused on. Collaborate with only authenticated payment gateways. Make sure that the business portal is secure because there will be a lot of customer transactions. Also, the most important thing is not to do everything by yourself and hire experts who will give the right solution for every cybersecurity issue. Delegation is very important for SMEs. Next, be sure of anti-theft measures for your digital platforms.
Digital transformation might not be as easy as it looks. But, it is attainable and much more advantageous. At the same time, there are challenges for the workforce in this transformation. So, there’s a formula of 70:20:10. The 70% of the business revenue goes into the business operations, 20% is saved or invested in technology to take the business to next level and the last 10% is very important and is to be invested in the workforce to build their competencies. This motivation helps them and in turn, helps the business by innovation.
Edited By: Vaishnavi Gupta