Updated: Mar 22
Even before COVID-19 the digitization and digitalization of business were well underway.
The pandemic serving mainly to speed up that uptake by necessity rather than by choice.
Prior to diving into why your small business needs to keep up and go digital, it’s instructive to define digitization and digitalization because there is a distinction.
Gartner, a global leader in IT advising, distinguishes them as follows:
Digitization – the process of changing from analog to digital form… without any different-in-kind changes to the process itself.
Digitalization – the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.
Scanning a document would digitize it.
“Imagine factory works putting down their hammers and lathes and instead of using computer-controlled equipment” is how IT industry analyst Jason Bloomberg describes digitalization in Forbes.
In essence, digitization is a part of digitalization and both are needed to future-proof your business.
Enhance Efficiency & Agility
Streamlining your operation through digitization can be a boon to your company’s efficiency.
Something as straightforward as digitizing documents can really pay dividends in terms of your agility as a business.
On that point, Keith Krach, the former CEO of DocuSign, writes, “converting paper documents to digital ones increases operational efficiency, improves workflow, and enhances customer relationships and public perception of a company. More importantly, digitization ensures that, should paper documents become lost or damaged, their electronic counterparts will remain accessible.”
Being able to access information from anywhere, in a decentralized fashion, means your responsiveness and adaptability aren’t hamstrung by an inability to get the information or documents you need.
As those efficiencies add up and the organization of resources improves, businesses big and small can see gains and improvements in their output.
Whether it’s incorporating cloud-based software as a service (SaaS) tools like Salesforce or HubSpot for your customer relationship management (CRM) or Trello for project management, migrating your workflow to digital serves to remove barriers and smooth roadblocks.
Digitizing makes your data more accessible and easier to search and transfer. And less friction in the process leads to greater productivity.
Schneider Electric adds, in a report on the benefits of digital transformation, “digital technology enables businesses to do more with less. From IoT [internet of things]-enabled tracking to automated production lines, data analytics to predictive maintenance, businesses can achieve greater yield with less energy and fewer materials and workers”.
Lower the Cost of Doing Business
As a natural byproduct of making your business more efficient and productive, incorporating digital tools into your workflow can also help to bring down the cost of doing business itself.
Going back to SaaS tools for a moment, they go well beyond CRMs:
Social Media Management – Hootsuite
Business Analytics and Data – Google Analytics
Team Collaboration – Asana
Accounting – QuickBooks
Hibox, a digital task and project management tool, sums it up nicely on their blog, “SaaS tools work on the pay-as-you-go principle, meaning you will only pay for a monthly subscription fee. Companies can choose the pricing plan according to their current needs and scale it up and down over time. This is what makes SaaS tools attractive to small businesses that carefully invest their limited budgets into new technologies.”
On top of that, you can realize savings by leaning more heavily into digital marketing.
The Right Tools Empower Employees
When you equip your team – be it 5 people, 50 or 500 – with the tools they need to succeed you tap into their full potential by alleviating some of their frustrations.
Moreover, digital tools aren’t necessarily static and many can evolve, scale and grow right along with your business.
Creating a smoother and more interconnected system, in turn, empowers your team.
As the CEO of Cyberclick, David Tomas, told CNBC, “we know how big companies work – I mean, it’s hard,” he added. “It’s a lot of processes, miscommunications, too hierarchic.”
One of the opportunities brought by digitization, Tomas explained, was to make “flatter” companies with new ways of communicating and “having the chance to change the way we work.”
Create a Better Customer Experience
What’s the point of going digital though? Why bother with all the effort?
To serve the customer better and keep them coming back. Back-of-the-house enhancements do turn into front-of-the-house improvements.
Your business is about solving a problem or fulfilling a need for people and technology is there to help improve the delivery of that as well as the experience a customer has with you.
Take payments, for example, with many stores already making the transition to online stores, it became important to offer a diversity of payment options for shoppers.
Cash is no longer king, at least temporarily. Even when we get back to business as usual, consumer behavior looks to have already shifted towards contactless payments.
A recent global survey by Mastercard found that:
46% have swapped out their top-of-wallet card for one that offers contactless
79% say they use contactless payments
80% of contactless transactions are under $25, a range that is typically dominated by cash
That’s just the beginning though, mobile payments – already the norm in countries like China – are rapidly gaining momentum in the US with 25.3% of Americans actively using mobile payment services back in 2018.
This is to say that customers will soon come to expect that digitization from your business.
And that’s just one facet of the customer experience.
Not all elements of your business need to undergo a thorough digital transformation and it certainly doesn’t have to happen overnight. However, it is important to understand the digital landscape and which tools you can incorporate to improve your business both today and in the future.
DISCLAIMER: The information provided through Fighting For Small is intended to provide general information only and should not be considered legal, tax, investment, financial, or other advice. You should seek professional advice before making any decision that could affect your business. All product names, brands, trademarks, and registered trademarks are the property of their respective owners. Use of these names trademarks and brands does not imply endorsement.