Stepping up digital transformation is critical to SMB survival

We are at a point in time where the question of executing a digital transformation plan is not a matter of if, but a question of when and how.

SMBs are a critical engine of the South African economy. Across the country, they represent more than 98% of businesses, employ between 50 and 60% of the workforce across all sectors, and are responsible for a quarter of job growth in the private sector.

As the marketplace becomes increasingly global, they are under enormous pressure to remain competitive and stay ahead of the curve, a business imperative in a post-pandemic world. While COVID-19 accelerated digital SMB digitalisation, many continue to lag behind larger organisations in their adoption of digital technologies. Digital adoption by SMBs is to a large extent still confined to basic services.

Lack of information and awareness, skills gaps, insufficient capital or outdated technology are among the factors holding them back. Given the extraordinary number of tech buzzwords that seem to proliferate daily, it’s hardly surprising that digital transformation can seem overwhelming – distributed cloud, hyper-automation, quantum computing, cybersecurity mesh, multi-experience, everything-as-a-service. Yet there is enormous value for SMBs in stepping up digital transformation investments. Doing so is critical to survival.

Becoming customer-centric with digital transformation

"Digital transformation is a customer-centric strategy. It equips SMBs to embrace the rapid pace of change. And it is not just about technology. Digital transformation is about customers, strategy, people, culture and being equipped to make the most of the rapid advancements in technology." Gary Pickford, Chief Commercial Officer, Tarsus Distribution

SMBs stand to benefit from new digitally enhanced practices and tools which create unparalleled opportunities for them to overcome the barriers they typically face in innovating and growing. Those that have taken the digital leap are seeing value in stepping up investments in digital transformation and are at it more holistically and strategically.

Emerging digital technologies enable greater product differentiation, better integration of supply chain systems and new business models that enable shorter time to market. They also enable a reduction in transaction costs associated with market activities as a result of access to information, communication and networking, boosting performance and productivity.

Starting with the basics

SMB owners are often unaware of the benefit potential new digital tools could offer for improving their business. They shouldn’t stop in their tracks when they hear “digital transformation” because they think it is beyond their resources. Instead they need to find technology partners who can help to set them on the path to the future through simple solutions like SaaS productivity tools, mobile access to business-critical apps, or tracking sales and marketing analytics.

The increasing availability and simplicity of automation tools makes it much easier for SMBs to embrace evolving technology enthusiastically. The result includes increased employee productivity, faster lead conversions, and better insights from customer or product data. This in turn facilitates accurate and timeous decision-making – the difference between win or lose for SMBs.

Reference:

https://www.mckinsey.com/featured-insights/middle-east-and-africa/how-south-african-smes-can-survive-and-thrive-post-covid-19

ENDS