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Small Business Ideas : How Small Businesses Can Overcome the Top 6 Challenges of Digital Transformation

Small Business Ideas : Digital transformation. It’s certainly a current buzzword and something that businesses have been grappling with for a number of years already. And as technology continues to evolve, the “goal posts” continue to be moved for companies to stay as current and as competitive as possible.

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Just what is digital transformation? In short, it is moving your business operations from manual to technological solutions. The simplest example would be one of the oldest. Instead of manual bookkeeping and accounting, a business chooses to purchase an accounting software program, ensures that its bookkeeping department is trained, and thus streamlines all of that business function.

But digital transformation has become much more complex in recent years. It’s no longer just a matter of adopting software solutions to streamline business operations. 

In fact, digital transformation will never end. Ultimately, it will impact operations, employees, suppliers and contractors, and customers. And it will continue to rapidly expand. Any business that ignores this phenomenon will cease to remain relevant.

Looking at the Challenges of Digital Transformation for Small Businesses

Some digital transformations are simple and will not disrupt the normal operations of a company. These include such efforts as buying new software to track inventory or adopting a new program that will improve personalization of customer service efforts. These transformations involve some training of some employees but not a large disruption or huge cost.

Digital Transformation of Businesses in COVID-19 times

Other transformations are far more comprehensive and can mean big changes. These will take time, effort and can be costly. For small businesses, these changes will have to be prioritized and weighed against the cost.

Let’s unpack the six major challenges that small businesses face as they look at digital transformation.

  1. The Challenge is Long-Term

Technology does not stand still. As a small business owner, you must accept this and the fact that your competition is probably trying to stay abreast of the latest improvements too. 

You will have to monitor transformations in your niche. How do you do this? If you have the in-house resources, you will need to designate an individual to perform this function, to identify transformations that are bringing results to others, and to determine if they are feasible for your company. 

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Barring in-house resources, it would be wise to contract out such services. You can thus be presented with options and the resultant costs in time, effort, and money. With solid information, you can make more informed decisions rather than “guess and test” measures. 

Here’s a short example. You run a small online travel agency. Rather than compete with the “big boys,” your niche is customized and personalized vacation packages with intimate settings. The big boys have all moved into augmented and virtual reality consumer experiences. Is this a technology that would be valuable to your potential customers? If you have data on its effectiveness, then you can better make that decision.

  1. Developing a Plan for Scope and Degree

Now that you understand the long-term nature of digital transformation, it is time to develop a plan. Whether you have done your own self-study or have the results of a study you have commissioned, you now have some recommendations.

These recommendations will fall into categories based upon importance, feasibility, cost, and short vs. long-term. You will need to place all of your options into categories as you make decisions about where to begin.

There will be some quick short-term transformations that can be implemented immediately – newer software initiatives that will quickly streamline parts of your operations with minimal disruption. There may be more intermediate transformations that will occur in phases – moving to cloud computing, for example. Such a transformation will involve major IT changes and plenty of staff training. And then, there are other transformations that will be even longer-term, developing and implementing some major shifts in the business itself.

Any plan must also be flexible, for newer technology can easily change your priorities.

The other challenge as you plan is to find the balance between doing too little or too much. Too little won’t bring satisfactory results; too much has the potential to disrupt too much of your short-term and necessary operations.

  1. Bringing Employees Along

There are really two challenges here.

First, employees tend to be “set” in their ways of doing things. They are comfortable with the old ways, even though they may be mostly manual and labor-intensive. Change to an unknown is always difficult. Add to this resistance the fear of job loss that may occur through digital transformation, and you can have a workforce with low morale and no motivation to “go along.” 

Getting staff “buy-in” will require some leadership, some empathy, and the willingness to listen to their concerns. Keeping them in the loop from the very beginning is critical.

Second, there is the training that must occur as new transformations are adopted. There will obviously be skill gaps. They may vary by department; they may be far over-reaching across the entire organization.

For every transformation being contemplated, there must be a plan in place that:

  • Identifies the skills gaps of every employee who will be impacted
  • Plans comprehensive training that occurs either before and/or during the implementation phases
  • Provides continued follow-up re-training based upon trainee feedback and identified weaknesses.

Obviously, this is a budgetary matter too. No transformation should be contemplated unless the funds are there to do it right and provide employees with the skills they need.

  1. Speaking of Budgets

For small businesses, this is always a big factor. And it will certainly figure into any transformations you are contemplating. As you develop your priorities, weigh them against their relative importance. Money should be allocated accordingly. And if you are unable to do it all at one time, then identify the phases in the order in which you can.

There are a couple of positive outlooks relative to budget challenges:

  • Much of the technology that performs major digital transformations has become considerably less expensive than when first developed. Moving to the cloud, for example, was once an expensive proposition and one that had to be accomplished by IT specialists. Today, it has become far more competitive, the transitions are far simpler and more streamlined, and in-house or contracted specialists can accomplish the transformation quickly. 
  • Consumer-driven businesses have access to some great transformative technology that is also now relatively cheap and easy to incorporate. Use of augmented reality is a prime example. There are now inexpensive tools to incorporate it into websites to give consumers grand experiences – virtually trying on clothes or eyeglasses, “painting” their rooms, placing furniture, taking real-time tours of possible vacation spots, etc. 
  • There is no lack of freelancers and transformation companies that can perform digital transformations at increasingly more reasonable pricing. Most will work within your budget (the sector is becoming highly competitive).
  1. Security Risks

Anytime a company moves into digital transformation, the Internet will be involved – IoT, cloud computing, automated systems, machine learning, employee use of remote devices, etc. – there is the looming issue of security. The more entry points there are into business systems, the more opportunities for hackers. While big security breaches become huge news (Target, Dept. of Defense, IRS, etc.), small businesses do not often take security risks as seriously as they should. But hackers actually love small businesses because security is less strict, and they can get valuable information on customers.

Employees and customers themselves pose the biggest security threats. Beyond ensuring that you have the latest technology in place, it will be important to “train” both employees and customers to avoid the “bad guys?” Who among us has not received an email, call, or text supposedly from Amazon or some other company we have patronized that warns of a breach of our account and needs for us to confirm our information?

  1. Bringing Customers on Board

Many digital transformations will impact your customers. Consider customer service changes as an example. More and more, companies are putting into place greater levels of self-service customer service. Younger customers tend to appreciate this rather than stand on “hold” waiting for a customer service rep to resolve their issue. Many older customers, though, are uncomfortable with this transformation. Bringing customers along will take time, and if they do not have a streamlined experience, they are more likely to go elsewhere. 

Meeting These Challenges Successfully

Digital transformations run the full gamut from the very simple to the very complex and from the very inexpensive to the pricey. The one truth is this: they are not going away, and any company that intends to remain competitive has no choice but to embrace the changes that ultimately their customers will demand. 

As you strive to meet the above six challenges, keep the following in mind:

  • Your ultimate goal is to meet the needs and wants of your customers and to make their user experiences as pleasant as possible.
  • You want to make your employees’ work life as pleasant as possible. Low morale and high turnover will not assist with successful transformations.
  • Hire experts when you need to. In the long run, contracting out services will be less costly than adding permanent in-house staff.
  • Think big but start with what is reasonable. You want to have big dreams about growing your business through transformations. Identify what is “doable” right now, get it done, and move on to the next steps. 
  • Stay flexible. New and exciting technological advances can pop up at any time, and there may be one or two that should be moved up to a top position. 

Above all, understand that digital transformation is not optional. It will become a permanent part of your small business life from this point forward. Embrace it, study the research, listen to the experts, and choose those transformations that will best grow your organization.

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Small Business Ideas : Author Bio: Bridgette Hernandez is a researcher and writer who often addresses the value of technological advances in a variety of niches, especially in education, as a contributor to Subjecto, a web and mobile app for students and educators. She has a continuing passion for all things digital and how technology continues to improve our lives.

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