What does "Digital Transformation" actually mean for SMEs?
And what lessons can be learned from the retail sector?
In the world of retail, digital technology has revolutionised everything, bringing new efficiencies to buying, logistics, payments and operations processes.
It has also changed the way customers do things.
Yet new technology has meant that traditional ‘bricks and mortar’ retailers who have not been quick enough off the mark have experienced a downturn in their fortunes. Some have been left behind, swept away or, at worst, wiped out, seen as no longer relevant by customers who prefer to buy online instead. This article by The Guardian lays out the numbers behind this downturn.
For SMEs, the lessons seem obvious.
Or do they?
In this short article, we’ll look at what digital transformation looks like and what it means for small to medium sized businesses.
What is digital transformation?
For any business, SME or not, the key to being successful is to be competitive. A core piece of this is making business processes as efficient as possible – which in turn means constantly looking for new ways to save time and reduce costs.
Process efficiency is the bedrock upon which all other elements of success is based, and the more efficiently the business can operate, the more competitive it can be.
This is critically important in the connected world where – increasingly – customers decide who they are going to purchase from based on accessibility, immediacy, instant availability and convenience.
The lesson from the retailers mentioned in the article above is that many do not move fast enough to recognise changing habits and preferences of customers, and so do not evolve their processes to digital quickly enough to remain competitive with their competitors who are evolving.
Digital transformation is about using digital technologies to make the current logistical and administrative business processes that underpin day-to-day operations more efficient – thereby enabling the business to be more competitive.
Yet it’s not a simple, one off job. Digital transformation is an ongoing process that must ensure the business remains competitive into the future, constantly finding new efficiencies and reducing costs further.
The goals of digital transformation
In most businesses, the digital transformation can be achieved by replacing tedious, repetitive manual tasks with digitally enabled or automated processes, and in the more complex of cases, the introduction of Artificial Intelligence (AI).
Looking at a typical business departmental process such as finance, a range of major benefits can be gained by adapting manual tasks with digital technology:
- Time savings: replacing the manual sending of invoices, statements and purchase orders with a digital process frees up finance staff to be engaged in more profitable operational or analytical tasks
- Reduction in paper use: replacement of paper with digital processing means less storage and less risk of loss of physical documents
- Faster response time and improved customer service: finance documents that are archived electronically can be located and retrieved more quickly, so customer queries can be dealt with more quickly
- Improvement of team morale: because finance staff can be deployed on less repetitive and cumbersome tasks, job satisfaction may increase
- Reduction in errors: digital processing of invoices and other finance documents is less prone to handling mistakes
Digital transformation in summary
Small businesses can find digital tools all around them which are already transforming their businesses. Collaborative tools, CRM systems, marketing automation, accounting systems – everything in the Cloud. All are examples of digital tools that help make business processes more efficient by saving time, reducing costs, or offering new possibilities to improve competitiveness.
While the wholesale process of digital transformation may at first seem daunting, the key is to develop a transformation strategy that sets out a roadmap and goals for the future.
The time to start planning and embrace digital technology to transform your business processes is now. Not tomorrow or next week.
Businesses that delay starting this process run the risk of being left behind, like the retailers who asked where their customers had gone, because their competitors transformed their businesses before they did.
To find out how transforming your paper-based finance processes into digital using Zetadocs for NAV or Zetadocs Expenses, contact Equisys now on 0207 203 4001. Or speak to your NAV partner.