Digital is a priority for businesses, yet the gap in digital adoption between SMEs and larger businesses is widening, warns Aileen O’Toole.
Digital is now regarded as a critical business priority for most businesses, large and small. The pandemic has resulted in a huge uplift in the adoption of e-commerce, cloud computing, digitising back-end systems – and of course new ways of working facilitated by technology.
Yet there is compelling evidence that the gap in digital adoption between larger businesses and SMEs is widening – and many business owners and managers are struggling to make the transition, or even to know where to start.
“Every SME owner or manager needs to be comfortable in the digital space”
An extensive survey of Irish SMEs commissioned by Vodafone Ireland identified a series of barriers such as cost, a lack of digital skills, trust in suppliers, and operational factors. How can these barriers be overcome?
How can SMEs ensure that digital is core to their business strategies and deliver measurable results? Here are five steps.
Deepen knowledge and upskill
Every SME owner or manager needs to be comfortable in the digital space. That does not necessarily mean that they have to know the jargon, or the inner workings of technologies.
Instead, they need to understand relevant digital trends, how different technologies or digital marketing techniques can impact on their businesses and what they can learn from competitors and peers which are making progress in digitising their businesses.
You can deepen your knowledge by:
- Participating in a digital programme to enable you and your team to upskill and interact with specialists and peers
- Tapping into the wealth of excellent online content available. Cut through the clutter by following recommendations from thought leaders and sectoral specialists
- Attending events – physical or virtual – where the experiences of other companies and subject matter experts are shared
- Considering “reverse mentoring” – asking a younger member of the team or a family member who is a digital native to support you to become more comfortable with your own use of technology
Concentrate on business priorities
Your business strategy should be the blueprint for everything you do digitally. It is all too easy to launch digital marketing campaigns or buy a new technology but if they don’t help you fulfill your strategic objectives the investment in time and money can be wasted. Digital should be seen as an enabler of your business strategy so consider:
- Commissioning a diagnostic of your business’s digital maturity that helps identify priority projects which will add immediate value, in terms of attracting and retaining customers, expanding your markets, creating efficiencies and cutting costs
- Availing of the supports available from the State, either your Local Enterprise Office or agencies such as Enterprise Ireland or Fáilte Ireland
- Creating a business case for investment and engaging with your bank, investors and State agencies to seek their support
Set realistic objectives and KPIs
Too often businesses are over-optimistic about what they can achieve digitally or don’t fully recognise the extent of competition or sometimes the complexity involved. You need to:
- Be crystal clear about what you are trying to achieve and ensure it is measurable
- Focus on outcome metrics, such as conversions or return on advertising spend, rather than `vanity metrics’, like unique visitors, likes or shares
- Start small and recognise that trial and error is a sound approach
Define the best operational model
SMEs can be challenged by gaps in skills or the `bandwidth’ of key people to manage or contribute to digital projects. You should:
- Determine what core competencies are needed in-house and what activities can be outsourced, potentially as part of the initial diagnostic
- Appoint a key member of the team to drive the digital strategy
- Consider tapping into the growing pool of freelance talent which offer digital services, but ensure that you have the skills and capacity to manage multiple suppliers
Select the right type of partner
To succeed, you will need external suppliers who are trusted and committed to your business. They should become your long-term business partners. Often the processes involved in selecting and retaining suppliers fall short, because requirements aren’t fully specified and expectations are mis-aligned. You should:
- Document the business requirements and what you are trying to achieve
- Conduct a formal, robust selection process where suppliers can be scored against different criteria
- Avoid focusing too much on cost at the expense of other important criteria, such as quality, functionality and customer service
- Put a Service Level Agreement (SLA) in place to ensure clarity and avoid potential disputes
- Be conscious that some vendors are not always neutral
- Seek independent advice for the selection and onboarding processes
Aileen O’Toole is a Digital Strategist and the Co-Author of The Paradox Report, a research study which includes data, research and expert analysis on marketing and digital trends. The Paradox Report is being distributed on a restricted basis to business leaders and executives. To request a copy please email firstname.lastname@example.org