What is Digital Transformation?
Digital transformation is directly related to the changing digital economy with individuals, businesses, and society becoming interconnected in real-time, supported by technology. Think of the advanced capabilities that are changing the nature of business:
- Hyper-connectivity — the result of anytime/anywhere communications
- Unlimited computing power available though diverse platforms
- Cloud computing, with easy access to hosted software and services
- The proliferation of sensors and mobile devices, providing new and continuous streams of information as well as ways of accessing them
- Advances in cybersecurity that support reliable access and use of key information, minimizing internal and external vulnerability
Almost all small businesses (firms with 10-99 employees) and midsize firms (with 100-999 employees) have some of these digital transformation resources in place: collaboration software, powerful computing and communications resources, cloud computing. But effective deployment and integration are needed to bring your firm to the next level of business performance.
Customer Acquisition, Revenue Growth, and Efficiency are Top Priorities for Small and Midsize Firms Worldwide
Around the world, small and midsize firms of different sizes and from various industries identify similar business priorities as most important. Looking in detail at faster-growing firms (those with 10%+ annual revenue growth) shows them to be especially ambitious in identifying multiple priorities such as driving revenue growth, improving productivity, and, above all, getting new customers. Many of these goals are interrelated and many are supported through advanced technology. The natural question is: What approach to the acquisition and use of technology can best support business objectives?
Practicality Drives Resource Choice for Small and Midsize Businesses
The most widely used software applications are also the ones both small and midsize firms implement frst: collaboration, CRM, ecommerce. The drivers behind selection are obvious: the greatest need and the most immediate impact. Midsize firms are more likely to note partner or customer influence. While the basic forces for technology investment are typically internal in nature, outside encouragement is important as well. Keeping an eye on the needs and demands of the changing competitive environment is always a good idea as you refine your technology investment plans.
Exceptional Results: 70%+ Say Expectations Met or Exceeded for Key Technology Investments
Between 73% and 87% of small and midsize businesses surveyed indicate that their expectations regarding technology investments were met or exceeded. This high level of success naturally paves the way for additional investment. In theory, building a successful portfolio of different technology components implies slightly lower marginal improvement for each additional investment. In reality, the effective coordination of new resources can bring greater performance impact than the sum of the parts: providing greater customer insight to bear on ecommerce engagement, for example.
Coordination and consolidation of internal processes and external customer and partner engagement can help leverage the impact of technology investment.
Senior Management and IT Management Lead in Initiating Technology Purchases
Influence on technology acquisition decisions is divided between senior/LOB management and IT, with the influence of IT staff growing with company size. The real takeaway is the collaborative nature of the process, at least for more successful outcomes. Delivering near-term tactical benefits makes building consensus for acquisition easier. Ensuring that purchases meet the needs of multiple constituencies is also key to success. Being attentive to outside advice – from software vendors, cloud service providers, or other technology partners – can be an additional source of guidance when used with care.
On-premise Versus Cloud Preferences Evenly Divided
Cloud resources, which are hosted and accessed online, are an increasingly important part of how small and midsize businesses obtain technology. Over half of small businesses and three quarters of midsize firms worldwide use at least one cloud-based resource, and cloud engagements continue to grow. Fast-growing firms show the same level of cloud interest as small and midsize firms in general – all find cloud resources increasingly appealing.
Cloud Drivers and Inhibitors are in Transition
While cost savings drew initial interest in the cloud 5-10 years ago, the key reasons for using cloud capabilities today are convenience and ease of integration. Security is still a concern but less so than in the past. Management, control, and performance issues are all potential concerns whether firms are fast growing or not.
Midsize Firms More Likely to Indicate Transformation Progress, But There’s Work Ahead
The majority of small and midsize firms say they are on the road to digital transformation, although for many the acquisition of key resources and their coordination is still at an early stage. For most firms, the awareness of the opportunity in aligning and leveraging technology assets is where real benefit can be found. Coordinating and updating customer information across CRM, financial, and other applications can improve internal efficiency and the quality of a customer’s experience, for example.
