In one survey, one third of French businesses expect to fail within five years if they do not achieve business optimisation, and over half believe that technological development will have a significant impact on the competitive landscape of their markets. Companies which benefit from integrated digital strategies are 25% more profitable than their competitors and generate six times higher profit growth, so why does a quick glance at the state of SMEs in Europe reveals that most SMEs are in digital disarray?
More than 40% of SMEs don’t take advantage of opportunities in digitalisation
If you think technology can solve your problems then, well, you’re right. But before you go celebrating the launch of your IPO, you need to rethink how you evaluate your inefficiencies. The key to successfully implementing tech solutions that drive beneficial change and increase value is by identifying the opportunities that can grow from your problem.
Digital tools can enable automation of workflows, improve internal communication and organisation, breathe life into marketing campaigns, and provide opportunities for innovation.
As one French article put it when describing SMEs that are not using digital tools, ‘it’s a bit like stating that electricity for businesses is still optional’.
The statistics reveal varying degrees of digitalisation across European countries. Norway does comparatively well in business digitalisation, with over 25% of SMEs selling online. By contrast, only around 11% of SMEs in France benefit from revenue generated via online sales. This is well below the EU average of 17%. Experts have emphasized factors such as lack of digital skills and inability to forecast ROI as challenges to digital uptake.
77% of businesses state that lack of digital skills is the main hurdle to digital transformation
These low figures are despite proven results that technology enables growth. 70% of managers consider digital transformation as a game-changer in their company strategy.
Digital tools are enablers: SMEs based in Switzerland have described the introduction of new technologies as the most important measure for overcoming regional challenges.
SMEs are crucial to the economy. Across the globe, numerous initiatives have sprung up to back technological transformation and highlight the importance of going digital. In France, the severity of the situation has been recognised by the Government who is targeting 1000 companies to bring them financial help in a bid to encourage online presence.
On a wider scale, the EU launched an initiative to improve the conditions for the use of information and communication technology across several industry sectors (including fashion, transport and logistics, and construction). Other European-wide initiatives, such as e-Skills for Jobs, have been pivotal in driving uptake for citizens to develop their digital skills and has been imperative for fulfilling Europe’s digital skills gap. Even private momentum, such as Google’s Go Global initiative, are helping SMEs go global using digitalisation.
All companies, no matter their size, must become digitally literate to stand a chance on sustainable long-term growth. And it isn’t just about keeping up. The right technology can enable SMEs to punch well above their weight, facilitating entry into new markets and maximising efficiency in already-established ones.
Recognise your game advantage
As a small or medium-sized business you have an edge compared to your large, slow-moving competitors. A flattened hierarchy enables effective communication and allows managers to more easily offer meaningful support across business units. In turn, business units are better able to challenge management and provide actionable feedback. It can be quicker – and cheaper – to implement a disruptive digital strategy that transforms your business, leading to a revised company culture that embraces innovation, efficiency, and solution-driven IT processes.
Identify your weaknesses and opportunities
Every problem has in it the seeds of its own solution. If you don’t have any problems, you don’t get any seeds – Norman Vincent Peale
A cool website and a lively Twitter feed is just one piece on your way to solving the digital puzzle. A comprehensive digital strategy transforms the internal workings of your business too. For example, businesses can use technology to radically improve their internal processes and resource efficiency by automating workflows. What is the best way to understand which workflows in your business are the most irksome for your employees? Ask them! You can be confident that your employees will be keen to share which tasks are unnecessarily time-consuming and tedious.
From project management to AI, there is an abundance of tools available that simplify processes, foster creativity and have you and your employees out the door in time for happy hour.
Third, you need to align solutions with strategy
A study by PWC shows a strong correlation between investing in tech and profitable growth when these investments corresponded with the companies’ strengths and selling points.
The key to increasing business value through technology is through intelligent alignment of IT solutions with specific company capabilities. It is a common myth that digital transformation is simply about automating processes that are already in place. The most successful digital strategies start with an inefficiency and identify the seed of opportunity before they begin throwing some tech at it.
With management involvement and an adapted company culture, investing in digital can radically change your future as an SME. If you think you can benefit from some friendly digital guidance, why not get in touch and see how we can help?