How Startups and SMEs Can Approach Digital Transformation

Technology has drastically changed the way businesses operate. Where end-to-end transactions required days of lead time in the past, today, they can be completed in mere minutes. But despite a digital transformation becoming a strategic necessity, UK startups and SMEs are transitioning slower than their counterparts abroad. To illustrate, a survey of 1,000 British businesses revealed that one-third have no plans to make emerging tech investments until 2025.

That said, it can't be denied that a digital transformation is vital to survive the long game. An SBIR study found that it enables sustainability, increases competitiveness, and allows the customisation of products and services. This is vital for smaller enterprises, as it allows them to widen their market share while optimising operational costs. Indeed, 54% of European SMEs identify digital innovation as a necessity to stay ahead. This then begs the question: how can UK business leaders get started?

Transforming the leadership

Digitally transforming a business requires a transformation in the leadership itself, as it is essentially about cultural change. To pull this off, LHH’s insights on executive coaching indicate that effective leaders should be adaptable, empathetic, consistent, and perceptive. Such leaders are capable of rising to the occasion, no matter the challenges. As these qualities are not always innate, leaders are seeking leadership development and coaching programmes to harness and hone them. With these skills in place, they can objectively assess their current business models and processes to see where innovations are needed.

This ensures that neither leader nor business falls behind: while leaders grow their skillsets and perception of what it takes to scale, their businesses can continue to develop. Case in point, when asked about the viability of their business models, Deloitte found that 64% of top executives saw the need to develop new digital businesses to stay relevant. The trend is no surprise. Beyond streamlining operations, our post on the benefits of a Digital Transformation for an SME emphasises how increased agility and flexibility are by-products of a successfully transformed business helmed by leaders who knew how to embrace the change.

Improving the team

With all these in mind, let’s talk about the team. Transforma Insights reveals digital transformation is a spectrum, not a linear journey. On the one hand, there is digitisation: the first inklings of embracing digital initiatives. On the other, there is full-scale transformation: the arrival of a fully-realised digital integration. The digital journey of a business can exist on various levels simultaneously, with one aspect further along than the other.

At such a juncture, leaders are well-positioned to upskill existing team members or recruit those already equipped with the necessary skills. While it may be easier to simply hire the talent needed, interestingly enough, HBR’s assessment of learning as a company culture posits that upskilling is more valuable. Employees often already possess skills that can be easily transferred or retooled for another role. Addressing skill gaps by implementing internal programmes makes a case not just for future-proofing but for increased employee security and satisfaction in the present as well.

Implementing the transformation

Now, to formally embark on your digital journey, start small. Assess where you are and select the appropriate technology to address your needs based on this. To avoid unnecessary costs, stick only to those operationally necessary. Then, align with your team and train them accordingly. For instance, if you find that your target market is mostly online, it will pay to focus on e-commerce transitions. Meanwhile, if your business deals with a multitude of files and data, it will be wise to explore cloud solutions.

The international initiative Women in Digital Business (WIDB) advises that you anticipate the learning curve, especially since the end goal is to build an ecosystem that’s efficient and scalable. In this way, you can be prepared to pivot when needed while keeping your vision intact. When done successfully this digital transformation can target SME pain points and help optimise growth, brand building, and operations in this competitive digital-first era.

Return on investment

Digitally transforming businesses is a long-term investment–one that pays dividends over an indefinite period of time. Though success is not always guaranteed and the journey arduous, those who embrace the risk will find that it levels the playing field, especially for smaller startups and businesses. Increased efficiency, communications, and connectivity provide a competitive advantage where there previously may not have been one, and this better positions the business for success.

Article by: Janna Bricks

For: www.meritec.co.uk