Staying competitive in a post COVID-19 era calls for the need to pivot to new digital strategies and practices.
Small and midsize businesses recognize that. According to a recent survey* we ran, nearly half (49%) of small businesses say most of their business is now being conducted virtually as a result of the pandemic, signaling that a good number of businesses have had to undergo various forms of digital transformation to stay relevant and compete in today’s ever-changing market.
The term digital transformation gets used widely, but at its essence, it simply means digitizing processes. That means finding ways to integrate digital technologies into your processes in order to help your business provide products and services more efficiently.
For example, when a store owner transitions from keeping handwritten receipts to entering sales in a cloud-based software system, it is undergoing a form of digital transformation.
Whether you’re looking to automate existing processes or introduce digital technology for a new project, the move towards digital transformation requires an integration of digital technology into all areas of your business.
Digital transformation can require a profound and radical change in processes and operations, all supported by the right people. For small businesses with limited budgets and resources, this can make for a daunting task:
69% of businesses we surveyed found shifting internal businesses online to be moderately and significantly challenging.
75% of respondents found maintaining team and cross-team collaboration to be moderately and significantly challenging during the digital transformation process.
Because businesses are all at different stages of growth, there’s no one size fits all strategy when it comes to developing a single digital transformation strategy. But one thing is for certain—a clearly defined strategy is imperative for a successful digital transformation.
Here are five key areas every business should focus on:
Start by reviewing your current processes
Connect future results to current business objectives
Explain the “why” in plain language & get buy-in from your people
Run tests to ensure seamless integration of platforms
Finally, keep testing and preparing for culture change
Implementing a sound digital transformation strategy first requires a complete 360-degree assessment of your business operations. Conducting a review is critical in having a solid understanding of the challenges your business is facing, and what changes need to be made operationally to fix that.
Start by making a list of your existing technologies and what goals they are helping to achieve. Then map out your processes in detail. Engage employees by having them contribute to the documentation of your processes—before you can make any changes, it’s important to ensure everyone’s looking through the same lens.
This review will also help you understand how existing processes work alongside one another in order to determine changes that need to be made, and potential challenges that could surface should these processes change.
What would success look like after your digital transformation strategy is rolled out? After you’ve mapped out your current business process standing, you need to determine an end goal. That means defining the specific and measurable business goals you should reach as a result of this strategy.
Every member of your team will encounter a change in their daily processes, so it’s critical that management ensures that the project is well aligned to your business’ overall business and people objectives.
For example, if your objective is to create a better customer experience and you’re looking to introduce a new customer online portal, a measurable and well-defined digital transformation goal could be an increase in positive customer reviews on the site.
Ultimately your digital transformation strategy should break down every goal into measurable outcomes to set yourself up for the best shot at success. Be sure you already have existing data or the tools to capture existing data before executing your digital transformation: doing so will give you the ability to measure future results against previous ones in order to track the progress of your strategy.
Addressing your company culture during the digital transformation process is imperative for your digital transformation to be an effective one. Over a quarter (27%) of small and midsize business owners that we surveyed cited resistance to change from their team as a top challenge when implementing digital transformation.
As you begin embarking on the digital transformation process, you’ll need full buy-in from all affected employees. And since you’re expecting your employees to complete operational tasks in a new way, you’ll have to be able explain why a new digitized process is an improvement.
For example, if you’re planning on introducing a new platform in the cloud, ensure your team understands the pain points and challenges the technology is aiming to solve before driving the adoption of the software. Consider how you’ll be implementing your internal communications strategy and how you plan to share the information. Start by creating a clear vision and explaining what the end goal is:
“Our company is introducing a [new inventory software platform] to [reduce errors and save time] with the aim of [providing a better customer experience].”
Educate stakeholders at all levels on the benefits of the technology in terms that make sense in the context of their day-to-day work experience—point out ways in which routine tasks will get automated and key metrics will be more accurately measured. Doing so will ensure they feel both empowered and a crucial part of the digital transformation process.
Running pilot tests on the new technology is a great trial and error practice to help you work out bugs and potential challenges that will impact your business and culture.
What’s needed for a successful pilot test?
First, define clear outcomes for the test and make sure you have the means to measure those results.
Second, decide who is going to be in your testing group (which department and what stakeholders).
Third, conduct the testing.
Fourth, gather feedback during and after the process.
Fifth, work on fixing bugs and any issues or challenges that were encountered.
A successful pilot gives you an invaluable opportunity to observe, test, and review processes to identify opportunities and challenges. The feedback you receive will enable you to fix issues and evaluate if the new technology is best suited for your business.
And in order to get the most out of your feedback, identify obvious—and not so obvious—stakeholders for your pilot test. You’ll be changing processes that may have worked well previously; you’ll also be changing how stakeholders interact with one another and your customers. That’s why finding ways of bringing your employees together is key to the success of your digital transformation process.
Starting the process of digital transformation is not a one-time task, but a continuous process that requires constant evaluation and investment of resources.
It is one that requires deliberate planning of technologies, processes, and employee education and training.
It is, therefore, wise to continue to assess and fine tune the rollout and execution of your digital transformation process while achieving internal-buy in and educating employees on the benefits of digital transformation.
*Results based on our survey of 406 small-business leaders, defined as presidents/vice presidents, C-suite, or owners/founders at U.S. companies with 2 - 500 employees in July 2020.