Digital Transformation & SMEs – FAQs Answered
By Dattatreya R.Kulkarni Posted May 8th, 2018 | Benefits of SAP Business One, Management, SAP Technology.
Going Digital! Digital Transformation! Digital Economy!
These phrases are used very commonly today. However, there are questions in the minds of many business owners that still remain unanswered especially in the Small and Medium Sector. Here is an attempt to answer some of the most FREQUENTLY ASKED QUESTIONS.
Question 1: What is ‘Digital’?
Answer: There could be different interpretations of ‘digital’. For some, it could be using computers in their office, for some, it is about using internet for marketing and for some it is about conducting business very differently using the modern technology. However, for a business to be truly digital it must see to it that digital technology is not just used in all its processes, but it should also have a fundamental rethink about how customers can be serviced most appropriately in today’s digital world. Mere transformation of existing processes to digital may not necessarily mean that the company has achieved what it must to achieve its goal leveraging digital.
Question 2: What does digital transformation mean?
Answer: In general terms, digital transformation can be defined as the integration of digital technology into all areas of a business resulting in fundamental changes to how businesses operate and how they deliver value to customers. It is also a cultural change that requires organizations to continually challenge the status quo, experiment often, and maybe accept failures from time to time.
In other words, digital transformation is more than simply using digital technology. It is a strategy to completely overhaul an organization’s business model. For example, a company might leverage digital transformation strategies and tactics to overhaul its supply chain or renovate the way customers interact with the company say with the use of customer portals, mobiles apps and so on.
Question 2: What does digital transformation mean?
Answer: In general terms, digital transformation can be defined as the integration of digital technology into all areas of a business resulting in fundamental changes to how businesses operate and how they deliver value to customers. It is also a cultural change that requires organizations to continually challenge the status quo, experiment often, and maybe accept failures from time to time.
In other words, digital transformation is more than simply using digital technology. It is a strategy to completely overhaul an organization’s business model. For example, a company might leverage digital transformation strategies and tactics to overhaul its supply chain or renovate the way customers interact with the company say with the use of customer portals, mobiles apps and so on.
Question 3: What are the major components of digital transformation?
Answer: Digital transformation can entail any number of technologies, including ERP software, HCM systems, eCommerce, business intelligence, mobile applications, analytics, internet of things along with a host of other possibilities. It should be noted that digital transformation typically entails a flexible and creative use of potential technologies without being contained by any one type of technology. Digital strategies are typically heavily driven by an overarching business strategy rather than by the IT department’s need to upgrade current systems.
Question 4: What is digital marketing?
Answer: Digital marketing is a broad term that refers to the promotion of products and services or brands through one or more forms of electronic media, for example, TV, radio, the internet, social media, electronic billboard etc.
Question 4: What is digital marketing?
Answer: Digital marketing is a broad term that refers to the promotion of products and services or brands through one or more forms of electronic media, for example, TV, radio, the internet, social media, electronic billboard etc.
Question 5: What role does Social Media play in Digital Marketing?
Answer: One can’t think digital marketing without social media in today’s world. Social media can strengthen many potential marketing goals using several tactics. Through social media, you can simply acquire new clients also. Some of the key benefits of Social Media Marketing:
- You get to see your target market close and personal
- You can respond to a problem immediately
- Increased brand recognition
- Improved brand loyalty
- Improved customer insights
- Tool to research your customers
Question 6: How is ‘digital’ different than the concept of ‘paperless office’?
Answer: Being paperless and being digital are not the same in the true sense. Companies can potentially become digital in their core operations but still not become paperless if their employees continue to take printouts of certain documents from time to time. In some cases, documents are printed for signatures and then scanned and uploaded onto a server. In a paperless scenario, all workflows are fulfilled electronically. Documents are signed digitally and electronic storage systems are used for additional security.
Question 6: How is ‘digital’ different than the concept of ‘paperless office’?
Answer: Being paperless and being digital are not the same in the true sense. Companies can potentially become digital in their core operations but still not become paperless if their employees continue to take printouts of certain documents from time to time. In some cases, documents are printed for signatures and then scanned and uploaded onto a server. In a paperless scenario, all workflows are fulfilled electronically. Documents are signed digitally and electronic storage systems are used for additional security.
Question 7: Where does an ERP stand in the picture?
Answer: An ERP system serves as the backbone of your enterprise IT system. It captures business transactions across multiple departments electronically. It not only helps in bringing in more transparency in the operations but also helps in improving the productivity of your team and overall cost reduction. A world class ERP system also makes it very easy for other software applications that a company may use to exchange data with it in both directions. In other words, a good ERP system serves as the central platform that keeps your entire digital footprint glued together in a meaningful way. However, it should be noted though, that by design, ERP implementation programs have a goal of achieving incremental business improvements.
Question 8: How do Small and Medium Companies benefit from ‘digital’?
Answer: A business, irrespective of its size, is a part of a very large network of organizations that are interconnected, providing or receiving products or services from each other. Whereas some companies service the end consumer, some service other businesses. Digital technology if used appropriately by all businesses in this network has the potential to increase efficiencies across the board leading to improved margins for businesses and hopefully better service and lower cost to the end consumer.
An SME is an integral part of this network and has tremendous potential to benefit from the digital transformation, which in itself is a journey. Being an SME, the owners face certain unique challenges when it comes to investing or even planning to invest in this journey. Whereas each company would be at a unique position with respect to its readiness to go digital, it’s imperative that they start taking action to move forward and take baby steps at the least.
Question 8: How do Small and Medium Companies benefit from ‘digital’?
Answer: A business, irrespective of its size, is a part of a very large network of organizations that are interconnected, providing or receiving products or services from each other. Whereas some companies service the end consumer, some service other businesses. Digital technology if used appropriately by all businesses in this network has the potential to increase efficiencies across the board leading to improved margins for businesses and hopefully better service and lower cost to the end consumer.
An SME is an integral part of this network and has tremendous potential to benefit from the digital transformation, which in itself is a journey. Being an SME, the owners face certain unique challenges when it comes to investing or even planning to invest in this journey. Whereas each company would be at a unique position with respect to its readiness to go digital, it’s imperative that they start taking action to move forward and take baby steps at the least.
Question 9: Where do I start the ‘digital journey’ for my company?
Answer: Businesses typically evolve through three digital business innovation maturity stages:
- Engaging in digital transformation
- Executing on digital transformation, and finally,
- Achieving digital transformation
As a first step you can:
- Assess your maturity across the digital business innovation elements to identify your starting points.
- Build a roadmap of next steps and deliverables for digital business innovation success using a consistent framework across all relevant business units.
In particular, for an SME that does not have any unified IT system to manage its processes, the starting point could well be the implementation of a world class ERP system.
If you would like to know more about how SAP Business One is the right ERP solution for SMEs please click here.
Please click here to know more about the myths about SAP solutions especially making rounds in the SME sector.
Question 10: What do I need to do to make my digital transformation successful?
Answer: Successful digital transformations require a host of strategies and methods. These include strongly defined business process management, a comprehensive organizational change management strategy, firm executive sponsorship and technological creativity and objectivity. Because these types of initiatives entail more risk and change than a more technologically-driven initiative, the people and business process aspects of the change are particularly important. It is important to invest in the right resources and activities to make these projects successful.
