Digital transformation is a process that any business must go through in order to enhance internal procedures and market competitiveness.
The epidemic has underlined the need of boosting company digitalization throughout the globe, particularly among small and medium-sized businesses, which represent for 99.83 percent of the total and about 65 percent of employment in Europe.
COVID-19’s crisis has wreaked havoc on our country’s productive fiber, particularly among the smallest businesses, to the point that, according to Social Security statistics, 99.7% of the almost 45,000 businesses that went out of business in that year employed less than 50 people.
Prior to the health catastrophe, digitalization was already a strategic asset for ensuring competitiveness, but it has now become critical, and no organization can afford to ignore it. The digital economy makes a significant contribution to growth. Between 2013 and 2018, according to DigitalES, the progress of digitalization in Spain might have contributed an annual average of up to 7.5 billion euros to real GDP.
Small businesses may benefit from incorporating technology into their operations and procedures to assist them meet the obstacles provided by their small size, as well as enhance their business strategy and resilience in the face of an unpredictable and changing environment. Because technology enables operations to be monitored and managed with accuracy, digitization helps companies save money by improving current processes.
Furthermore, it gives new avenues for better understanding the markets in which the firm operates (CRM, social networks), as well as for reaching out to new prospective consumers through electronic commerce and the ability to sell via platforms and marketplaces. Big data and analytics have become essential decision-making tools because they give useful information in real time about both internal and external elements affecting a company’s operations.
This is particularly crucial in order to be aware of changes in demand, the emergence of new preferences, and customer demands, and to be able to respond appropriately and with the necessary flexibility.
What is the definition of digitization?
Before deciding whether or not a company has attained an appropriate level of digitization, it’s important considering what a digitization process entails. In general, it is linked to the integration of technology into companies and the continuation of previous practices using digital tools.
Digitization, on the other hand, is a far more transcendental phenomenon that affects a company’s culture and operations, as well as the company’s ability to reach new markets and even build new lines of business.
The digital culture enables the business to make choices based on data management expertise and to operate in a customer-centric manner, while also establishing a framework for cross-functional cooperation and encouraging a spirit of constant innovation. All of this must lead to the development of value for all of the players and interest groups involved.
In this regard, the World Economic Forum bases digital culture on four pillars: collaboration within the organization’s ecosystem for the joint development of innovative solutions; data as a rudder that guides actions; a focus on customer experience; and, finally, innovation, which is defined as the continuous improvement of products and processes, as well as trying new things and taking risks.
To avoid being left behind, digital culture need adaptability and a workforce capable of taking on new challenges. Technology aids adaptation to quickly changing contexts such as today’s by allowing teams to operate remotely, resulting in the formation of offshore collaborative networks. On the other hand, it permits the establishment of new business models and distribution channels, as well as the development of novel goods and services that suit client requirements.
Digital transformation’s drivers and stumbling blocks
The digital transformation process necessitates a significant shift in the way a business operates, and SMEs are likely to demand more work than big corporations. AUTELSI conducted a study of Spanish businesses to evaluate the digitalization levers and obstacles.
One of the significant findings is that the majority of people associate technology use with increasing corporate competitiveness. Resistance to change, on the other hand, is the most significant impediment to transformation, which is mostly connected to the alignment of technology and business, engagement with open ecosystems, and the creation of new digital skills.
Although the training demands are continual, not just in technical disciplines, but also in themes such as strategy, analytics, and social connections, the organizations surveyed admit that they are embracing digital talent. Moreover half of the businesses say their digital strategy is correctly connected with their company goals, with just 4% admitting to a complete disconnect.
It also underscores the fact that four out of five respondents claim fashion or image has influenced their digital advances.
Three-quarters of firms believe that not all components of the organization’s culture are equipped to confront digital transformation. On the other hand, the presence of organizational “silos,” i.e., a lack of communication between various business units, stands out as a barrier to change.
Another roadblock is legislation; they point out that the General Data Protection Regulation is having a detrimental influence on the execution of digital transformation initiatives. Companies in the banking and insurance sectors, as well as industrial firms, are severely affected.
Only a third of the companies polled include cybersecurity in their digital initiatives, and the majority see it as a roadblock to technological innovation. In this instance, it is critical to shift corporate perceptions so that security is seen as a benefit rather than a hindrance to digital implementation.
Transformational digital solutions
DigitalES has defined a set of technologies that must be used in order for SMEs to benefit from digital transformation. It discusses the following topics in particular:
- Broadband access, both fixed and mobile, serves as the foundation for every digitalization effort.
- Teleworking and the digital workplace as a guarantee of the organization’s flexibility and resilience.
- Office automation and digital management software (ERP).
- As a solution for managing and analyzing client contacts, anticipating wants and wishes, optimizing profitability, increasing sales, and customizing campaigns to attract new consumers, a multi-channel customer management (CRM) platform is used.
- Cloud-based cybersecurity tools and copies of corporate business data
- Web pages and online shop solutions
- Internet of Things (IoT) platforms connect the digital and physical worlds with the goal of enabling data collection, device management, fleet management, and video surveillance, among other functions, so that all of this data can be processed and analyzed to reduce operating costs, improve services, or provide new ones.
- Digital marketing tools are used to handle enormous amounts of data in order to speed up procedures and improve outcomes. Email marketing tools, marketing automation, content marketing, content creation and editing, SEO and SEM, benchmarking, online presentation sharing, management and prospecting in social networks, and corporate online presence monitoring are just a few of the many alternatives available.
- From clever analytic technology to enormous data storage systems, business intelligence services are available (big data).
- For scenario prediction and decision assistance, artificial intelligence systems are used.
Thanks to Peter Navarro at Business 2 Community whose reporting provided the original basis for this story.
