According to UOB research, two of every five SMEs who embraced digitization activities in 2020 enjoyed greater revenue growth the following year. Even in a difficult business environment, they recorded productivity and efficiency gains ranging from 22 to 49% across various industries. SMEs need to speed up their digital transformation to widen their market share and improve upon customer experience.
Benefits Of Digital Transformation In SMEs:
Smaller firms now have unparalleled opportunities to innovate, expand globally, and prosper due to digitalization. The Internet of Things (IoT), data analytics, and cloud computing, when used together, boost a company’s simulation, prototyping, decision-making, and automation capabilities.
Increased Savings And Reduced Costs
Digitizing information-intensive operations in SMEs reduce up to 90% of the costs. Human errors cost businesses a lot of money. Numerous activities associated with sales, marketing, promotions, advertising, and operations can be costly if errors occur. Such errors are reduced by up to 90% when tasks are automated.
Digital transformation enables firms to upgrade legacy processes, streamline operations, improve security, and boost profitability. You’ll save a significant amount of time, allowing you to free up resources and concentrate on your main business goals. Your organization will be better equipped to run more efficiently, save costs, and improve communication with clients simply by automating the time spent on mundane tasks.
Digital transformation supports a digital culture by giving team members the necessary tools adapted to their business requirements. These tools not only make it easier to collaborate, but they also help the entire organization go forward digitally. This transition in digital culture is critical for firms to remain viable. It necessitates team members’ upskilling and digital learning to reap the benefits of digital transformation.
By implementing digital transformation, SMEs can improve their speed-to-market and embrace Continuous Improvement (CI) methods. Rapid innovation and adaptability provide new opportunities for businesses to experiment and develop new products.
Products, processes, and business models are three significant aspects of innovation. Access to insightful data is one way that digital innovation can improve efficiency and production. For example, knowledge of your technology’s performance can assist you in determining whether it’s operating properly and predict possible issues.
Because they value the positive impact of innovation, firms can continue to grow with increased productivity while staying one step ahead of the competition.
Improved Customer Service
Customers today expect online-first interactions, speed, omnichannel experiences, and the convenience of mobile-first communication. The digital revolution delivers better transparency, less information asymmetry, new consumer benefits like new products and services, greater ease, more choices, new experiences, and cheaper pricing for customer commercial interaction.
According to a Gartner report, over ⅔ of companies are competing based on customer experience. Digital transformation in SMEs significantly influences customer experience because of improved data management, streamlined procedures, more empowered people, and integrated technology.
Data unlocks customer insights. SMEs may establish a customer-centric business plan by better knowing their customers and needs. These insights can assist promote business growth by combining structured data (personal customer information) and unstructured data (social media analytics).
A successful digital transformation prioritizes data strategy, management, privacy, and integration to make informed business decisions. The extent to which organizations may now acquire, retain, and analyze data has been altered by technological advancements. As a result, many companies now have enough data to use advanced analytics to make better, more efficient decisions.
Costs Involved In Digital Transformation In SMEs
The global investment forecast in the necessary technologies and services for digital transformation is $2.3 trillion by 2023, according to International Data Corporation (IDC). The costs for SMEs vary according to their digital transformation strategy choice.
When SMEs digitize their business processes, they frequently outsource solutions, partly to compensate for the lack of internal competencies and, more importantly, to save money. Digital platforms, for example, (e.g., social networks, eCommerce marketplaces, etc.) are useful for optimizing specific functions at a cheap cost (e.g., business intelligence and data analytics services).
Similarly, SMEs rely on external consultants or the security-by-design aspects of the products and services they use to manage digital security concerns. They also source artificial intelligence (AI) solutions from knowledge markets and use Computer Central Software as a Service to leapfrog to new AI systems.
A common mistake SMEs make is introducing digital solutions to limited aspects of their businesses. Digital transformation must be an all-encompassing process to achieve its intended results. If you limit digitalization to only a few functional areas of your company, it’s likely that, despite the initial expenditures, it won’t provide the full value.
Digital Transformation can not be inexpensive. SMEs should monitor the total cost of ownership of the technology their company will rely on for many years.
However, focusing on reducing costs and the returns on investment simultaneously can ensure that your investment does not go in vain.
DEHA Makes Your Digital Transformation Journey Easy.
Digital transformation is necessary to keep your firm ahead of the competition. Companies that have automated inefficient procedures and incorporated technological approaches to business operations can better engage their customers today. With our digital transformation consultancy, DEHA can assist your firm in making a smooth transition. Get in touch with us today.