Written by Riva Lesonsky
Digital transformation for businesses is not a short-term endeavor.
Digital transformation is a hot topic today, but what does it mean for small and medium-sized businesses? Eric Lamarre, Kate Smaje, and Rodney, senior partners at global management consulting firm McKinsey & Co. Semmel plans to publish a book in June about how companies can “build their strengths and become more flexible by harnessing the power of AI, enhancing customer experiences, and driving business activities.” It is. Increase profitability through an evolving transformation process. ”
They were recently interviewed for McKinsey's “Author Talks” series. And while much of the content covered is aimed at large enterprises, there is much that small business owners can learn about harnessing the power of digital transformation.
Smadje said he wrote the book after seeing customers “struggle with what it really takes to successfully complete a digital transformation.” The reason for this is that “the 'method' is extremely difficult.”
The role of AI in digital transformation
Semmel said on “Author Talks” that everyone is talking about generative AI right now, and that companies need to think about how to “get value out of AI and put that value into business.”
That advice also applies to small businesses. Understand what AI can do for your business and stop worrying about how others will use it. Of course, you need to monitor your competitors' activities and understand industry best practices. But you need to deploy AI in a way that makes sense for your business. No, that doesn't mean firing staff and replacing them with AI tools. “We need to think about where humans are in this loop in a more fundamental way,” Smadje said.
And like any marketing method you deploy, you need to measure, adopt, and scale your AI practices, Semmel says.
Digital transformation is an ongoing process
Digital transformation for businesses is not a short-term endeavor. Smaje said: “What bothers me about the term digital transformation is that it has the connotation that it ends at some point. [But] I don't think this is the end. This is a journey. It's a muscle that you constantly build to get better. ”
Business leaders need to be technology leaders
To truly transform a company, technology needs to be “fully integrated” into the business, and “business leaders need to be technology leaders,” says Semmel.
He distinguishes between companies with an “old IT culture” and companies with a new digital culture. He explains that companies need to create a “digital culture” that focuses on: There is Digital, I don't do digital.
“Do something new”
When asked what the most important part of digital and AI transformation is, Semmel said companies will focus on “where the money is and how do we reimagine the business to truly create value?” says there is a need. According to him, it's not about “taking a bunch of processes and running them better.” Instead, you should be thinking, “How can we, as a business, make more money by doing new things?”
But Smaje says that's not enough. [it doesn’t] No problem, unless there's a way to actually serve it. She said everyone “spends so much time thinking about 'what to do' that they miss the fact that ultimately someone has to use the technology.” Ta.
In another McKinsey article, three senior partners wrote: It is a permanent state that operates on the basis of learning and adapting faster than competitors. But that is only possible if CEOs act as digital guardians of business transformation. ”
What small businesses can do Get used to it Digital
It may sound easy for the large companies that McKinsey typically serves, but small and medium-sized businesses also need to become digital companies. In a blog on its site, Salesforce acknowledges that “with the demands of small business ownership, you may wonder if you have the ability to tackle digital transformation.” However, he adds that optimizing your digital presence is “not as difficult as you think” and is essential for small businesses to reach customers and drive growth.
Small Business Digital Transformation Research shows that small businesses that engage in digital transformation experience eight times the revenue growth of small businesses that do not engage in digital transformation.
Before moving to digital, it's important to understand exactly what digital transformation means. Salesforce explains:
- Digitization was “the transition from analog to digital, such as converting paper records to digital scans.”
- Digitization has introduced “new efficient tools into old business models,” such as “introducing records management software into businesses.”
- Digital transformation is “the use of technology to disrupt business models, reimagine a company's image, and appeal to customers.”
Driving digital transformation for small and medium-sized businesses
If you're ready to embark on your digital transformation, here are some tips from Salesforce.
Think about your company. What could be done better? Conduct an internal assessment of the biggest gaps and where changes need to be made. And be sure to involve everyone in your company in the evaluation. There are many free assessment tools online that can help you “identify your current level of digitalization, compare your digital maturity with your peers, and discover opportunities for improvement.”
Prioritize your plans. After the assessment, discuss with your team the biggest challenges facing your company and how technology can help solve them. Sometimes it's as simple as adding a chat tool to your site to improve customer service.
Analyze the data. According to Salesforce, data analytics is “the practice of examining large, diverse datasets from a variety of sources to derive insights that inform a company's decision-making.” For small businesses, that data may come from his website or Facebook. pages, Instagram accounts, emails to his campaigns, and even receipts.
Data analytics can help you understand how customers find you, what they buy or don't buy, when and how they shop, what devices they shop on, and more. You can then identify customer patterns and customize your marketing and sales practices to suit them. For example, if you know when your customers will be shopping online, you can grab their attention by setting up slots to post on social media at those times.
Consider getting outside help. Does this still seem too much for you to handle? Consider hiring a consultant to review and understand your data or to ensure you invest in the right technology.
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Benefits of digital transformation
Digital transformation for your company may seem like a daunting task, but it has many benefits, including:
- Increased efficiency and productivity: Digital tools and technologies streamline business processes, automate repetitive tasks, and, as mentioned above, provide real-time data and analytics. This improves operational efficiency and allows employees to focus on revenue-generating activities, increasing productivity.
- To expand your market reach: Digital platforms and online marketplaces allow you to reach a wider customer base outside your local market.
- Save money: Adopting digital solutions can reduce operational costs. Automating manual processes can reduce overhead (requires fewer employees). Using cloud-based services costs less than investing in expensive hardware and software. Also, digital marketing, especially social media, is usually much cheaper than traditional advertising methods.
- Become more agile and flexible: Digital technology allows you to respond quickly to market demands, implement changes, and try new ideas.
- Enhance collaboration and communication: If your business is virtual or hybrid, digital communication and collaboration tools for tasks like video conferencing and project management are especially important.
Digital transformation is a never-ending journey
As you begin your digital transformation, remember what a senior partner at McKinsey wrote: “Digital is not a destination.” It is rather a never-ending journey. By embracing digital transformation and adopting innovative technologies, you can deliver superior customer experiences that strengthen customer loyalty and enable your company to scale and grow.
Yes, there are challenges along the way, but the potential benefits make it all worth it.
About the author
Rieva Lesonsky is CEO of GrowBiz Media. SmallBusinessCurrents.com I've been covering small business and entrepreneurship for more than 30 years.Sign up with her to get more insight into her business trends free ocean current Newsletter.
