Why consider a small business transformation? Because thanks to the pandemic, shifting to a digital environment has become imperative.
Learn more about why it matters and follow 10 steps to help make the shift.
Why Digital Small Business Transformation Matters
Digitalization is one of the main characteristics of business in the modern world thanks to the impact of the internet and mobile technology.
Consider how digital technologies are transforming markets. Even before the pandemic, ecommerce growth was on a steady upward trend. Market research company Grand View Research estimates the global ecommerce market reached $9.09 trillion in 2019 and projects an annual compound growth rate of 14.7% from 2020 to 2027. The pandemic accelerated this trend, driving U.S. ecommerce sales up 44% in 2020 to triple growth in 2019 and account for 21.3% of all retail sales, according to Digital Commerce 360, a provider of ecommerce news and research.
The growth of ecommerce has fueled a digital transformation for marketing. Digital marketing has become essential for retailers. Even businesses that are brick-and-mortar are finding it vital to compete online to generate in-store sales. Meanwhile, ecommerce retailers are moving into the brick-and-mortar space, blurring the distinction between traditional business vs. modern business models.
For example, Amazon.com operates 11 Amazon Fresh grocery delivery services in the U.S., and plans to expand this to at least 28 more locations, Bloomberg reported. This has made Amazon and Walmart direct competitors in the grocery business, illustrating how digital has merged the ecommerce and brick-and-mortar marketing spaces.
What Are the Benefits of a Small Business Transformation?
Businesses are migrating to digital technology because of the enormous benefits modernization offers.
These include:
- Extension of digital marketing outreach to connect to more online shoppers
- Expansion of the workforce to include remote workers
- Ability to integrate data from all channels for a 360-degree view of business processes, customers and competitors
- Analytics insights into trends in marketing and sales, customer service and operational efficiency
- Ability to track key performance indicators (KPIs) to measure, adjust and improve performance
These benefits give a significant advantage to businesses that embrace modernization strategy in strategic management of business processes.
Small Business Transformation: 10 Steps
Making the shift to a modern digital business model requires making significant changes to your infrastructure, which can be costly and disruptive if you go about it the wrong way.
Here’s a 10-step process to help you make a smooth transition and avoid pitfalls along the way.
1. Get Key Personnel on Board
A digital transformation affects your entire company, not just the information technology department. Make sure all key personnel or stakeholders are on board with your modernization plans so that you get the support you need and you don’t run into any bureaucratic or budgeting barriers.
Networking equipment provider Cisco recommends that your chief technology officer, chief marketing officer and chief security officer should all be part of this discussion. In addition to these positions, consider whether other key personnel at your company need to be involved.
2. Identify Your Business Objectives
While digital transformation involves technology, its primary purpose is to help your business. Define the business objectives you hope to serve through digital transformation before considering which technological tools you will use to achieve your goals.
Possible objectives include:
- Improving your ability to serve ecommerce customers
- Developing the infrastructure to support a remote workforce
- Scaling up your digital marketing outreach
- Improving your efficiency through automation
- Making your business decisions more data-driven
For best results, define your objectives in terms of quantifiable KPIs so you can set measurable goals and benchmarks. For example, if your goal is to improve your ecommerce customer service, consider setting a target average response time that digital technology could help you achieve.
3. Establish Your Budget
Your budget will set a limit on which technology upgrades are available to your business. Establishing your financial resources from the outset will help you avoid starting down an unsustainable path.
Talk with your key stakeholders about what type of budget you can afford to devote to digital modernization. Get input from your technology team about how much the projected upgrades will cost. Use these estimates to help you prioritize upgrades and plan how you will finance the project. Consider whether you’ll need business financing resources such as loans to achieve your goals.
4. Map Your Business Processes
Digitization essentially involves automating your business processes, making mapping out these processes a prerequisite for effective modernization. Work with your technology team and key management personnel to develop a flowchart representing the steps involved in the business processes you will digitize.
If you aren’t experienced with business process mapping, a business process consultant can assist you. Tech titans such as International Business Machines provide software such as Blueworks Live to automate business process mapping.
5. Review Your Digital Data Sources
A business process map can help you identify where information is flowing into your company, how it flows through your internal processes and how it flows back out of your business. This is important for ensuring that your digital infrastructure integrates all the information you have available, avoiding information silos, namely areas where data gets isolated from your main database.
Taking this step will help you maximize your ability to leverage all your data, giving you a total 360-degree view of the information you have about your internal business processes and external interactions with your customers and market.
6. Identify Technology Gaps
In most cases, digitization won’t require a complete replacement of your existing technological infrastructure, but only an upgrade of key areas. Review which technology tools you’re already using. Identify which ones you’ll be able to retain when you modernize your infrastructure. Isolate the areas which will require an upgrade.
As part of this step, consider how you will integrate your existing technology with tools you plan to adopt. Look for apps that will be compatible with your existing infrastructure.
7. Prioritize Upgrades
Both from a project management perspective and a financial planning perspective, usually it’s impractical to implement all your technology upgrades at once.
Identify which upgrades are priorities by considering factors such as their impact on:
- Current cash-flow resources (what can you afford now?)
- Current operational bottlenecks which are hindering your business
- Future efficiency gains
- Future financial gains
List upgrades in order of priority and develop an implementation schedule.
8. Implement Changes
After you’ve established your priorities, you can begin implementing upgrades. Each upgrade should have its own project management leader, team, workflow and budget.
Implementing upgrades will require some workers to take away time from other projects, so factor this into your planning. You may find it efficient to hire outside consultants to minimize the drain on your internal resources.
To minimize the disruption caused by digitization, test implementations on a small scale before rolling out large-scale adoption. For example, you might use a small group of team members to test software so you can identify and address bugs before training the rest of your team.
9. Train Your Team in New Technology
After you’ve implemented new technology, your team will need to be trained in its use. Work with your technology provider to schedule training for key personnel such as managers who will be responsible for training others on your staff.
Develop standard operating procedures for using new technology tools. Design training procedures for existing employees and new hires. Familiarize your team with your technology provider’s support resources, such as tutorials and knowledge databases, so that supervisors and workers know where to go with questions.
10. Evaluate and Adjust Your Small Business Transformation
Your journey to digital small business transformation may encounter bumps on the road, and it’s important to monitor your implementation in order to stay on course.
Use the KPIs you established when you set your initial goals to help you evaluate the success of each technology implementation you undertake. Keep track of tech support issues that emerge as you adopt new technology. Make adjustments and improvements to bring your results in alignment with your objectives.
Small Business Transformation: Digitize Now
The pandemic has increased the urgency for digital transformation, accelerating a trend that was already going forward. Benefits such as increased marketing outreach, the ability to leverage remote workers and 360-degree insight into analytics data make modernization a priority for competitive companies.
Making a successful digital transformation starts with getting key stakeholders on board, identifying your business objectives and establishing your budget. This positions you to map your business processes in order to identify which data sources need to be integrated and which technology upgrades you need. You can then begin implementing changes, training your team and making adjustments to improve and optimize your digital infrastructure.
Pursue modernization in small, measured steps to ensure a smooth, successful digital transformation.
