Implementing Digital Transformation

John Cradden outlines a step-by-step plan for SMEs and small businesses focused on digitalising their companies.

Digital transformation is about incorporating digital technology into all aspects of your business so that you can make smarter decisions using data, improve customer experiences, and scale up operations more efficiently.

Consultancy firm McKinsey calls it no less than the “fundamental rewiring of how an organisation operates”, as well as a continuous journey because of the constantly evolving nature of digital technologies.

The digital transformation drill will be familiar to many small businesses by now, but anything that involves a fundamental rewiring of operations requires a step-by-step plan – and one that takes into account that it’s a journey with no end point. As McKinsey puts it: “It’s a permanent state of operating based on learning and adapting faster than the competition.”

Step 1: Assess your current digital maturity

Digital maturity is a reflection of how well embedded digital tools are in an organisation’s culture and processes and whether they are being used effectively. So it’s not just a question of the technology you use, but also the people working at your company and the relevant skills they have to make the most of it. Assessing your digital maturity can provide a framework for improvement and further development as well as long-term strategy.

There are various tools and methods for assessing digital maturity; some are free of charge, while others require a small fee. Consultancy firms can also support organisations and businesses wishing to gain a more accurate and relevant understanding of their strengths and weaknesses in this area.

If you are a member of the European Digital Innovation Hub, a useful resource is the Digital Maturity Assessment Tool, which is aimed at SMEs and public service organisations.

Step 2: Developing your digital transformation strategy 

According to Accenture, there are five broad areas a digital transformation strategy must address:

1. Business transformation. Digital transformation is about putting technology at the heart of your business strategy, creating a unified model across business and technology.
2. Business operations realignment. This is about asking what your employees and customers need most, and how digital processes can help deliver this.
3. New practices to foster agility and experimentation. Combine new ways of working with modern engineering capabilities.
4. Flexible approach to core technologies. Don’t rely on one technology but embrace flexibility and innovation in terms of what you use.
5. People change management. The company needs to be united about what new technologies to adopt and how to integrate them into daily use, including how roles and responsibilities should evolve to make the most of them.

Step 3: Choosing the right technologies for your business

On the face of it, this is a tricky one as there are so many options. It can be tempting to follow trends and watch what other businesses are buying, but to pinpoint the right technology for your digital transformation you should be clear about the processes you want to improve and the outputs that would make the project a success.

Given the general aims of digital transformation in terms of improving efficiency, lowering costs and improving the customer experience, you can focus on common goals such as:

• Enhanced customer focus
• Faster processing
• Speedy project delivery
• Workflow automation
• Better business intelligence
• Tighter cybersecurity and data protection

In terms of selecting the right technology, solutions for digital transformation fall into a number of broad categories, including:

• Cloud computing: eliminate the need for costly on-premises infrastructure and gain immediate access to scalable computing resources. The best known providers include Amazon Web Services, Google Cloud and IBM Cloud.
• Data analytics: make better decisions by being able to dig into data about things customer behaviours, market trends, and operational performance. Google Analytics is the household name here, but also look at Atlassian and Kanerika.
• Cybersecurity: protect sensitive data, comply with data protection regulations and fend off relentless cyberattacks. Check out Fortinet, Cisco and Zscaler. 
• AI, machine learning and automation: streamline workflows, reduce manual tasks, and improve productivity, while AI-powered solutions like chatbots and virtual assistants can enhance customer interactions and deliver personalised experiences at scale. Check out Microsoft Power BI, and Zapier.
• Mobile optimisation: investing in mobile-friendly websites, responsive design and mobile apps enables small businesses to engage customers wherever they are and deliver consistent user experiences across devices. No household names in this sector, but there are many small, local developers who can cover this.
• Ecommerce platforms: for SMEs who need an ecommerce solution to cater for the online shopping demand, there is a range of cost-effective e-commerce solutions that can do most of the hard work for you. Have a look at WooCommerce, Shopify or Adobe Commerce

Step 4: Implementing digital solutions: best practices

Even the very best digital solutions require a thorough implementation process to ensure that nothing is overlooked or left behind, whether that’s to do with the actual tools, the processes or the people using them. Here are some good practices to follow.

• Start by assessing the pain points you need to resolve, but also identify the opportunities to transform operations.
• Don’t be tempted to do everything you want to do all at once. Prioritise one high-impact area like customer service or inventory management.
• Create a plan with tools, timelines and outcomes, and track the progress of your projects.
• In the same spirit that encourages you to prioritise, execute projects carefully by testing and iterating until you get it right.
• In the same spirit that has you tracking progress of your projects, track the results with reliable and well-understood metrics like customer satisfaction and efficiency gains.

Step 5: Training your team and ensuring ongoing support

Implementing a digital transformation requires bringing your staff along with you and exploring together the mindset required to achieve it. They’ll also need to understand the core technologies that you propose to integrate into your business and learn how they are fundamental to your business model.

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