Digital Transformation: Challenges and Opportunities for Small Businesses

Estimated read time 5 min read

There’s been a lot of talk in recent years about the digital transformation sweeping through businesses and institutions. It’s a catchy term but it doesn’t quite get to the heart of the phenomenon, which involves far more than newfangled technologies and different working conditions. For many companies, a digital transformation is a new way to think about a fundamental business challenge—managing the flow of information and exchange of data throughout an organization—and how to adapt their business model to address it.

In a nutshell, the digital transformation is about how technology is disrupting what we know to be business as usual. Although it’s often used interchangeably with the word “innovation”, a digital transformation refers to a much more specific set of trends: the ability to use networked devices and real-time data to instantly adapt to changing conditions and customer needs; the use of automation to streamline operations and reduce costs; and the speed to identify new opportunities and seize them before the competition does.

The technology is the enabler, but it is not by itself a complete recipe for success. The digital transformation journey is complex, with many moving parts, so it requires a well-defined plan, strong leadership, and perseverance to see it through.

To give your organization the best chance of success, we’ve compiled a set of best practices for integrating digital technology into your business. From digital transformation mistakes small businesses should avoid, to steps you can take to improve your digital strategy roadmap, we’ve identified what you should do to best make sure your organization achieves its goals.

1. Prioritize workplace culture

Cultural norms and values are established at the top, and they diffuse quickly throughout an organization. During a digital transformation, it’s not uncommon for workplace culture to change and evolve. Some employees may be made redundant. Others may be reassigned and given more responsibility and autonomy in their role.

Prioritize workplace culture

The worst thing you can do in advance of this change is to keep your employees in the dark. Confusion, anxiety, and resentment are all potential byproducts of miscommunication. In most situations, keeping your employees in the loop can head off these negative side effects. Giving your team the opportunity to ask questions, offer feedback, and be fully informed will help them feel comfortable as your organization transitions to the new way of working.

Keep in mind that your employees may emerge from a digital transformation with more bargaining power than they had before. If you’re considering a digital transformation, it’s important to understand how much flexibility you will have in the new working environment. This is especially relevant when it comes to remote working arrangements.

Unsurprisingly, the onset of the pandemic—and the mass adoption of remote work and education arrangements—has accelerated remote work trends across a range of industries. If not managed properly, long-term work from home arrangements can certainly strain workplace culture, decreasing productivity and limiting collaboration opportunities. To avoid these pitfalls, you should be prepared to provide new types of training, work closely with your remote workers to make sure they are able to perform their duties effectively, and be ready to scale back when needed.

2. Keep your expectations in check

Look, we get it. There’s been a lot of exciting developments in the digital world over the last few years. Artificial intelligence, business automation, cloud-based computing, the blockchain! It’s easy—and tempting—to get overly excited and expect miracles from new technologies, only to be disappointed when they don’t quite work out that way.

We’re not saying that you shouldn’t expect significant changes. Rather, we’re saying that it’s important to make sure you aren’t expecting too much, and that you’re setting realistic expectations and preparing backup strategies. A new technology that fails to live up to its potential might be a disaster, and you should be prepared for that.

3. Hire the Right People

Sounds obvious right? Well, yes. But that doesn’t mean that it’s easy. Talent acquisition is one of the most difficult aspects of any digital transformation. This is especially true when it comes to hiring consultants from outside your organization.

On the subject of new hires, your digital transformation team is a great place to start. The team should have a deep understanding of the technology you’re implementing, the process you’re using, how your organization is structured, and the goals you have for the project.

Hire the Right People

Arguably the trickiest step in this process is keeping track of what you don’t know. During your organization’s digital transformation, you’ll probably come to the realization that you only have a partial understanding of a new system’s scope, or that you don’t have all the information you need to make an intelligent hiring decision. This is to be expected. You can’t know everything about every prospective problem ahead of time. The best way to get ahead of potential roadblocks is to have your veteran hires onboard early. This way, you’ll be able to identify any blind spots before they become serious problems to contend with.

The Bottom Line

A digital transformation isn’t just a new website or a new marketing platform. It’s a fundamental overhaul of how your organization works and how you present yourself to your customers. Ultimately, a digital transformation is about creating business value. Improved profitability, efficiency, and customer experiences are just a few of the benefits that can be achieved with the right people, the right process, and the right plan.

Sarah Cantley

Editorial Head at UK Blog for Business & Startup.

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