DIGITAL TRANSFORMATION FOR MICRO AND SMALL BUSINESSES
DIGITAL TRANSFORMATION FOR MICRO AND SMALL BUSINESSES
For every country, micro and small businesses act as a backbone for its economic growth. Micro businesses have nine or fewer people and investment in plant and machinery is limited to about US $ 34,000. Whereas that for small business can exceed US $ 34,000 up to US $ 6,83,000. These can be either manufacturing enterprises or service enterprises. This sector has emerged as an extremely vivid and dynamic contribution to the Indian economy.
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This shift has led to alterations of business rules for companies. Customer experience has been prioritized and digital transformation strategies have been deployed. Digital transformation basically changes how enterprises work, and deliver value to customers, by combining digital technology with all areas of the existing business.
“Real transformation requires real honesty. If you want to move forward – get real with yourself.” – Bryant McGill
Successful implementation and deployment of services with the help of digital transformation includes up to date technology, vendors and support spanning across the organization. On one hand, big enterprises have the benefit of hefty budgets and easy access and ability to operate through technology, contacts with vendors who can help in the transformation of their businesses. However, giving digital transformation a priority is not just for enterprises, it benefits micro and small businesses too.
According to a digital transformation study, it was observed that around 50% of small and medium businesses surveyed said that they are planning to indulge in activities that will aid in adopting and transforming their businesses for the coming digital time. Around 75% of the companies surveyed agreed that digital technology was having quite an impact on how they did business.
Many businesses draw inspiration from each other and try to adopt similar kinds of models to suit their own business. In the coming chapters, we will see a case study of how Audi transformed the way in which companies sell vehicles as they came up with a showroom concept called Audi City.
Speaking of consumer expectations and the way they have surged up, small and micro enterprises have the same urge and outlook toward change as that of the large businesses. However, there are some challenges that are faced by small enterprises when it comes to bringing these thoughts to fruition – Let’s see if these challenges are boon or bane for them.
Time and budget constraints
Most businesses are dealing with complex solutions and, hence, they would need heavy budgets and typically have more time and trials to get it right.
However, small businesses don’t have access to a high budget and time. They can’t put all their money in for one transformation. There are consequences that follow. Hence, they keep it simple which is actually beneficial. As a result, they tend to focus on the necessary areas to integrate digital technology in spite of going all in to transform all the areas of business.
People and Work Culture
Hierarchy of management is missing in small businesses. Micro and small businesses contain a limited set of people (usually owners and workers). There is no scope of hiring leaders who foster digital transformation and put the energy into these initiatives to build a better work culture and ramp up the workspace with energy. Many micro and small businesses lack executive and managerial support that is required to drive transformation.
Consultant Connect
Often big enterprises are seen to be bringing and engaging reputed consulting firms to provide them with the path way to drive transformation. Smaller businesses may not have the same connections or budget.
In wake of these challenges, some small businesses choose to stand still. However, with the modern age the customer has also modernized. With around 80% of customers who give utmost importance to experience as much as delivery of actual products and services, digital transformation is more like a requirement rather than an option for all small businesses.
Henceforth, possessing a relatively simpler digital transformation strategy that focuses on bringing the most value to the table and dealing with the right vendor would do the work for you. It can be the catalyst to fueling small businesses to bring in successful change.
You know what can be a key decision strategically? Leveraging vendors so that they can help small businesses to transform. As a micro or small business, looking for vendors who understand digital transformation and are customer centric – it helps in ultimately achieving the same output. Here are some key characteristics to look when you seek a vendor -
Industry Expertise
If a vendor does not understand your business, then his solutions might affect your business adversely. Vendors should know their audience. That way the approach followed by them will be stitched according to your business needs which could ultimately bring success to your company.
Helps Build Consumer Connect
A vendor should be familiar with the right platform to provide small and micro businesses with powerful customer insights and their needs. If the insights are data based then it can help include running better loyalty programs, optimized workflow etc.
Access to Modern Technology (Like Artificial Intelligence, ML)
If a vendor invests in machine learning algorithms and crunch the data to get the useful information it can help turn customer data into personalized experiences. This can enable small businesses to be ready for the digital era.
Has a Vigorous Set of Integrations?
Look for vendors who have levers into other commonly used tools and services. This will make sure that a business is successful in migrating the whole business and assembling it to cater to its digital customers.
Prioritizes Customer Care
Say a small business finds a vendor who prioritizes customer care while they deal on their own platform, it is highly likely that they will be successful in guiding small business through the transformation process that will not only build a strong customer care practice but also be a factor in driving the change.
Encouraging Ways to Drive Consumers to Digital Options
The vendors who constantly challenge and support businesses to drive change are an asset to the enterprise. Simply, remember the why. Digital transformation makes sure that micro and small businesses can continue to deliver value to customers while keeping their changing behaviors and needs in mind.
Digital transformation for them begins with a strategy and a well-defined path, but success comes with having the right vendors, the right team on board to drive the transformation.
Analyzing Digital Transformation In micro and Small Businesses
In this run of digital transformation, it is also important to allocate work and look at who is in charge of what responsibility. It is better if the transformation is led by the owner or the manager. Many small and micro businesses are currently looking at identifying their challenges, risks, and customer expectations. The requirement analysis helps them to accurately define achievable goals.
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The management can be in charge of digitalization areas and come up with new technologies that can contribute to change and explore new scalable business models. Once that is done, the knowledge and training is transferred to the others who are a part of the enterprise.
Once the business model is fixed, it doesn’t mean that the work is done. People have to operate on those business models. Ease of customers and training of employees is something that is required. Fostering a learning culture in the workspace can drive transformation at a faster pace. Skilled employees can educate the current employees, to create a stock of required abilities and skills and to find gaps.
“It’s not about perfect. It’s about effort. And when you implement that effort into your life. Every single day, that’s where transformation happens. That’s how change occurs. Keep going. Remember why you started.” – Anonymous
It is vital to create an awareness of digital and the environment used to support it. Using IT to develop an enterprise, to measure its impact on sales and performance is something that is being done in many enterprises.
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For instance, there is a small photographer who has a team of three workers with him who are involved in video editing and filmmaking. They used to operate in Mumbai and had made a huge customer base because of good photography skills and affordable budget.
For them to keep track of their customers was getting difficult when they decided to advertise it among them. They didn’t have a maintained customer book with contacts or such to reveal wedding discount offers. That’s when it hit them that they should invest in some tools that help maintain the customer and sales data.
Collaboration with consultants and guiding the small and micro business owners and making them familiar with current trends and demonstrating their importance based on real time examples happening around us can pique their interest even more.
“Embrace each challenge in your life as an opportunity for self-transformation.” – Bernie S. Siegel
Government support if given to such enterprises can help fasten their growth and boost their confidence. With financial and technological aid from government agencies and other similar institutions, micro and small businesses may be able to get better assistance for their transformation process. Along with this, external support of research institutions can help them follow the initiatives better.
The Ministry of MSME and SIDBI had jointly established the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) in August, 2000 in order to implement the credit guarantee scheme. The corpus of CGTMSE is contributed by the Government of India and SIDBI in the ratio of 4:1.
It is quite clear that the requirements of micro and small businesses in the digital transformation process can vary. It is necessary to privatize the content by means of size of enterprise (whether micro or small), and the industry sector. All the processes like marketing, finance, sales, manufacturing, accounting and human resources can be complemented with new technology. Digitization in businesses requires changes with respect to strategy and work culture both to be implemented in a radical way.
Stages of Digital Transformation in micro and Small Businesses
There is a different level of digitization in micro and small enterprises – one which are completely unaware of digital transformation who lack strategy and have no digital competencies available with them. They do not yet offer any digital products or services, and all in all are lacking awareness of the need of digital transformation.
Then there are others who have conceptual understanding. They have some idea about what they want, offer some kind of digital product, have started on their way to digital transformation but they miss digital strategy.
When small and micro enterprises actually implement these digital changes they are at a defined stage who are able to combine experiences achieved from pilot experiments into partial strategies. At this stage, a culture of digital thinking is being rooted in the enterprise.
“Change can be hard. It requires no extra effort to settle for the same old thing. Auto-pilot keeps us locked into past patterns. But transforming your life? That requires courage, commitment, and effort. It’s tempting to stay camped in the zone of That’s-Just-How-It-Is. But to get to the really good stuff in life, you have to be willing to become an explorer and adventurer.” – John Mark Green
Then the profitability of these partial strategies and the effects of the pilot implementations are judged and are used to shape an overall strategy for change. At this point in business, when they come up with a specific digital strategy, then the enterprise falls in the integrated maturity stage. Post which if the business model is aligning with the existing process and customers are getting benefited out of it, it is said that the transformation has emerged successful.
ABOUT THE AUTHOR
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| MR. PRAKASH ARYA |
Enthusiast, Strategist, Keen Planner and Strong Charisma, these are some of the motivations with which I associate myself. I describe my self as an eProfessional, who evangelizes digital media as Entrepreneur, Mentor, Management Consultant, Speaker and Writer and Domain Knowledge Expert. In my phenomenal more than two decades of long career, I have played varied roles and been an eSpecialist in the sphere of Digital and Online Communication as well as in eBusinesses in different organizations in India and abroad.
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