Small businesses that invest in digital transformation will be more responsive and agile

Why Small Businesses Need to Accelerate Their Digital Transformation

Emily GregorLast updated on January 2, 2024
8 min

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In the early days of digitalization, companies that were pacesetters quickly learned that accelerating digital transformation gave them a competitive advantage. Digital tools are easy to integrate and they’re user-friendly. What’s more, they’re affordable and cost-effective.

Despite the advantages of implementing digital tools, many small businesses are lagging behind in hopping on board with digital transformation. Companies that are hesitant to embrace digitization may struggle with sustainability as competitors take the lead. Simply put, it’s a matter of survival in today’s marketplace. The pandemic and other changes within the market make it necessary for small and midsize businesses (SMBs) to accelerate digital transformation.

Read on to better understand digital transformation—and why SMBs need to accelerate it—and get a glimpse of what the future holds in the workplace.

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What Is Digital Transformation?

Digital transformation is more than adding a few digital tools into your current workflows. It requires a new view of reality as it pertains to how your company functions now and its potential for operating better in the future.

Much like it sounds, digital transformation means adopting digital technology in place of traditional manual processes. The “transformation” part of the term refers to how the right digital tools and processes can transform your business—in a positive way!

Companies that integrate digital technology into all areas of their businesses fundamentally change how they deliver value and meet their customers’ needs.

Digital transformation initiatives require an overall cultural shift within your business. It requires you to ask questions, experiment with tools and workflows, and maybe experience an occasional failure. When digital tools don’t work as you expect them to, it’s an opportunity to learn how to do things better, so that’s not a bad thing either!

If that’s not enough to convince you to accelerate digital transformation, let’s take a deeper dive into what you have to gain by moving in that direction.

Why Small Businesses Need to Invest in Digital Transformation

Whether small businesses were ready for digital transformation or not, the pandemic forced many businesses to give it a try. Only a tiny percentage of small businesses are in the advanced stages of digital transformation. Maturity in digitalization plays a huge role in growth for small businesses. If the projections pan out, small businesses that digitize their operations will be on an unprecedented upward growth path for the near future.

To get a better pulse on why small businesses need to accelerate digital transformation, let’s look at where small businesses stand and how the front-runners are faring since making the switch to digital tools.

A recent report by Cisco gives us a clear picture of the digitalization landscape and how the pandemic has evolved it.

  • 72% of small businesses are accelerating digitization because of COVID-19 and the need to operate a remote workforce or better engage with customers.

  • Only 24% of small businesses are in the most advanced stages of digital transformation.

  • A mere 4% of small businesses are in a digital native stage.

  • Around 26% of small businesses have made little or no effort to accelerate digital transformation.

What can we glean from those stats? When the need for change is strong enough, small businesses make a greater effort to embrace change.

With that in mind, let’s look at how the leaders in digital transformation have fared. The Cisco report research shares the following insights.

Digital Transformation Leads to Growth

  • Small businesses contributed 48% ($17 trillion U.S. currency) to the GDP of the U.K., the U.S., Germany, France, and Canada.

  • The research indicates that small businesses that digitize processes could increase GDP growth by an additional 5.6% ($2.3 trillion U.S. currency) by 2024.

  • Small businesses using digitization successfully generated increased sales that have helped them recover from losses due to the pandemic.

  • Leading small businesses have seen greater growth by up to eight times.

Clearly, it’s prime time for small business growth. Digital transformation makes that not only possible but lucrative.

While small businesses that are slow to digitally transform their operations are just trying to survive, businesses that are reaching a level of maturity in digitalization are working on being more resilient to changes within the marketplace.

Cloud technology is the pillar for digitalization. For small businesses, it’s the key to responsiveness and agility. When you put it all together, now is the right time for small businesses to accelerate digital transformation. With the right technology vendors, technologies, and expertise, small businesses can better navigate the current environment and whatever lies ahead.

How the Pandemic Has Impacted the Customer Experience

There’s no question that the recent pandemic has taken a heavy toll on businesses and consumers alike. It changed the way people across the world live, work, and play. It’s forced business owners to reflect on how they’ve been operating versus how they could better meet the needs of their customers.

For consumers, the pandemic forced them to shift their priorities toward what they need, what motivates them to spend money, and how they purchase goods and services. Adding to that, today’s consumers have new and different expectations for how they differentiate a good customer experience from a substandard one.

For example, most people visit their favorite grocery store weekly. Once the pandemic hit, that ritual quickly generated fears over health concerns, so consumers looked for safer alternatives. If the regular grocery store didn’t provide online ordering and curbside pickup or delivery, it was safer to switch to one that did. Brand loyalty hinges on which companies can provide a better customer experience.

From the small business perspective, the pandemic brought new limitations that forced them to sink or swim. For one thing, small businesses are seeing a major increase in online traffic. As a result, they’ve needed to downsize in-person sales and service and scale up using cloud tools and technology. The clear way to do that is to invest in digital solutions that transform workflows to meet today’s needs and likely, those of the future.

COVID-19 provided opportunities for small businesses to reexamine how they deliver goods and services to consumers. Innovation rules the day. Does your company’s current customer experience match your customers’ perceptions of an excellent experience? If your answer is no or you’re not sure, read on for 10 tips on how to accelerate digital transformation.

10 Tips for How to Accelerate Digital Transformation

1) Create a Digital Transformation Road Map

Develop a road map for when to achieve digital transformation over the next three years. This will help you make decisions about the best tools and processes.

2) Set Up a Strategic Call Center Environment

Consider setting up a digitally equipped call center environment for sales, support, or both, complete with a modern phone system that offers a robust set of voice calling features.

3) Leverage Automation and AI

Set priorities for leveraging automation and artificial intelligence as a part of your digital strategy.

4) Explore Adding Digital Tools

Invest time in exploring the digital tools that will have the most impact now and will help you innovate and adapt in the future. Hint: Cloud-based phone systems that work in tandem with software integrations offer a total unified communications system that’s versatile and flexible for a truly digital business.

5) Hire the Best Talent

Evaluate your current talent and their ability to help the company accelerate digital transformation. The addition of CIOs might be in order. Digital tools are remote-friendly, so consider hiring the best talent from a different geographical area and put them to work in a virtual environment.

6) Research Cloud-Based Phone Systems

Explore your options for a quality cloud-based phone system vendor that leverages an open API technology. Even better, choose a vendor that will allow you to add and subtract digital tools as your needs change.

7) Follow Industry Trends and Technologies

Keep in the loop of industry trends and technologies. Digital transformation is in a state of constant evolution. To be a pacesetter, you’ll need to stay on top of new tips, tools, technologies, and best practices.

8) Start Small

Don’t be afraid to get your feet wet. Learn as you go, and scale as your company grows. The right digital tools are scalable.

9) Combine High Tech with High Touch

Leverage tools that capture data that enables your teams to customize interactions and personalize them. AI and machine learning provide a clearer view of the customer journey, making it possible to keep customers engaged.

10) Set Up a Comprehensive Knowledge Base

Leverage the benefits of a knowledge base for self-service and FAQs. Reserve the phone and other channels for more complex or nuanced problems and questions.

The Digital Transformation & the Future of Work

It’s fair for small businesses to ask what digital transformation means for the future of work. How can we quickly switch gears? What tools and processes will impact the future of business?

However, it’s less about digital transformation as a whole and more about the steps you take to improve the customer experience through technology. The most successful companies will take a long-term perspective and they’ll be willing to embrace change. To that end, industry leaders will find the right people and digital tools to transform the customer experience to match customer expectations.

In considering the future of work, small businesses need to innovate their approach to the workforce. Out of necessity, many workers have learned to adapt to a remote work environment. For employees, the digital environment has its benefits. Ultimately, digital transformation helps companies evolve their workforce. In fact, small businesses may be inclined to favor employees that can work remotely and independently.

Small businesses that rely on in-person interactions (restaurants, entertainment establishments, etc.) have faced digital transformation challenges more than others. The most innovative businesses have found ways to engage with customers using digital communication channels or by providing virtual experiences. Fitness companies like Obé use technology to bring the feeling of an elevated workout studio with personalized instruction straight to your living room.

To wrap things up, COVID-19 hit so unexpectedly that it caught individuals and businesses by surprise. It was hard to imagine how all-encompassing and life-altering it would become.

At Aircall, we understand that necessity is changing the way your small business needs to deliver a good customer experience. We’re committed to helping your small business lean into digital transformation at whatever rate makes you feel comfortable and helps elevate the customer experience. Digital transformation is possible—and it’s easier than you might think.

Published on May 12, 2021.

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