Embracing the future: How small businesses can digitally transform operations
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Posted: Wed 11th Sep 2024
When it comes to the world of technology, terms like digitisation, digitalisation and digital transformation often get thrown around interchangeably.
However, they each represent distinct stages in the journey of leveraging digital tools to improve and revolutionise how small businesses operate.
Digitisation: The first step
Digitisation is all about converting analogue information into a digital format.
Think of it as taking something physical, like a paper document, and turning it into a digital version that can be easily stored, accessed and used by computers.
For instance, scanning a paper document to create a PDF or converting an old photograph into a digital image file are common examples of digitisation. It’s the foundational step that makes everything else in the digital journey possible.
Digitalisation: Enhancing processes
Once you have digital data, the next step is digitalisation. This is where digital technologies are used to improve or change business processes, making them more efficient and creating new growth opportunities.
Digitalisation goes beyond just converting information into a different format, it involves integrating digital tools into existing workflows.
Using software to automate a manual data entry process or implementing a customer relationship management (CRM) system to manage customer interactions more effectively are both examples of digitalisation. The goal here is to optimise what you’re already doing by using digital technology.
Digital transformation: Rethinking business
Digital transformation, a term with varied interpretations, generally refers to the continuous process of increasing digital maturity by integrating digital technologies into business practices to foster a digital culture.
For some small businesses, digital transformation can be understood as the strategic use of digital tools to enhance operations while preserving the fundamental aspects of their business model.
At its most comprehensive level, digital transformation can go beyond just optimising existing processes, it may involve reimagining how a business functions, delivers value and interacts with customers in a digital-first world.
This involves adopting new tools and technologies while continuing to provide the same core services or by introducing completely new products or services.
To illustrate this, consider two examples:
Example #1
A small construction services company could undergo digital transformation by integrating project management software, digital collaboration tools and real-time communication platforms. These tools would streamline project scheduling, resource allocation and client communication, allowing the company to manage projects more efficiently. While the core business — performing physical construction work — remains unchanged, the company enhances its operational efficiency and customer focus through digital means.
Example #2
A small retail business might choose to maintain its physical store but enhance its operations by developing a personalised e-commerce platform that syncs with in-store inventory. This would provide customers with a unified shopping experience, whether they choose to shop online or in person. In this case, the business isn’t altering its fundamental model — selling products — but is transforming how it delivers value through digital channels.
In today's business environment, adopting digital tools is no longer optional but essential. For some small businesses, this might involve significant changes in how they operate, while for others, it could mean incorporating new digital solutions that enable them to deliver traditional services more effectively and with greater value to their customers.
Each of these stages builds upon the previous one, starting with digitisation as the foundation, then digitalisation to optimise processes and finally, digital transformation to reshape how the overall business operates.
Watch this webinar to discover how embracing digitalisation can give your small business a competitive edge:
Factors influencing digitalisation in micro businesses
For small businesses, a variety of enablers and inhibitors often influence digitalisation. Common perceived barriers include a limited understanding of the technology sector, the high costs associated with implementing new technologies, the significant time commitment required for staff training and a fear of failure.
On the other hand, the key drivers pushing businesses towards digitalisation include a forward-thinking mindset, support from industry consultants and mentors, the availability of training programmes and informal exchanges within business networks. A growth mindset is essential for adopting digitalisation and having a positive attitude towards technology can make a significant difference.
Real-world use cases of digitalisation
The following are real-world examples of how some Irish SMEs have leveraged digital tools in their business practices.
1. Solar panel company
Challenge: This company was collecting on-site surveys on paper and then transcribing them into Excel in the office. This process was inefficient, prone to errors and caused delays.
Solution: A web form was developed to mirror the survey process, complete with a defined workflow, validation and mandatory fields. This allowed for automated data collection and reduced the reliance on paper, leading to significant efficiency gains.
2. Environmental consulting firm
Challenge: The firm was managing projects manually using Excel. The process was unwieldy and it was difficult to restrict access to sensitive data.
Solution: By introducing a cloud-based project management tool (monday.com), the firm was able to streamline its processes, moving from Excel to a more secure and efficient system.
3. Retail seller of children's jigsaw puzzles
Challenge: As sales increased, managing stock across both an online Shopify store and offline B2B sales without a digital stock control system was becoming increasingly difficult.
Solution: A digital order form was created that pulled data from Shopify using webhooks, automating the stock control process. This system reduced discrepancies, saved time and was particularly beneficial for the small business’s limited resources.
4. Timesheet system for site workers
Challenge: The company was using manual, printed books to track hours, which were then transcribed and sent to the accountant for payroll — a time-consuming and error-prone process.
Solution: A digital timesheet system was implemented using Google Sheets, allowing for automatic data entry, overtime calculations and summary reporting. This greatly sped up the process and reduced the likelihood of errors.
5. Manufacturing company (promotional apparel)
Challenge: The company was using an outdated accounts package and many paper-based systems, leading to inefficiencies in their admin workflows.
Solution: They were introduced to Zoho Invoice, a cloud-based solution, which after a successful test with the free version, streamlined their administrative processes.
6. Facilities management services
Challenge: The company struggled to manage work orders manually across four different systems, leading to errors and inefficiencies.
Solution: Robotic Process Automation (RPA) was implemented to automate the tracking of work orders. The bots performed tasks in a fraction of the time it took human workers, reducing the risk of errors and saving significant time.
Benefits of embracing digitalisation
Using technology does require a shift in thinking, but the benefits can be substantial.
It can relieve pressure on staff, leading to a happier and more productive workforce. For administrative teams, it can remove the burden of repetitive tasks, fostering a more collaborative and efficient workplace. Embracing digitalisation can position a small business for long-term success in an increasingly digital world.
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