Digital transformation (DX) is a buzzword nowadays. What is digital transformation? Generally speaking, digital transformation refers to organizational adoption and integration of digital technology into all areas of businesses. This can be done by replacing non-digital or manual processes with digital processes or replacing older digital technologies with new ones.
There is an accelerated digital transformation in the pandemic era, because consumer behaviors and organizational processes have been disrupted. The trends that have emerged are e-commerce, digital marketing, remote work, virtual conferencing, and contact-free, socially distanced customer experiences (e.g., ordering food online with home delivery services or curb-side pickup, online banking, mobile banking).
To respond to environmental changes, organizations of various sizes need to quickly adopt digital technologies and transform their businesses process, marketing campaigns, and customer experiences. Thus, embracing digital transformation is a necessity. It’s the time for small-to-medium sized businesses (SMBs) to start the digital transformation journey.
Usually, big organizations can work with consulting firms to develop their digital strategies or have a digital transformation team in-house to facilitate the digitalization processes. Due to limited budgets and resources, SMBs can’t afford these resources. Nevertheless, SMBs still need to go digital to thrive in today’s business environments and would like to know about how to embrace digital transformation. The questions I frequently hear from SMBs are: How can we go digital? What kinds of digital transformation should we adopt? What are the benefits of adopting digital transformation? How to encourage digital transformation within our company? What is the step-by-step guide? Based on my research and consulting experiences, I would like to provide the following suggestions to SMBs.
Think strategically about digital transformation
First, develop your digital strategy based on your organization’s needs and industrial trends. Some common difficulties SMBs encounter are lacking of digital strategies and not knowing about how to start. Actually, you don’t have to follow enterprises’ approaches to adopt all types of digital transformation. You can strategically start your digital transformation journey based on your specific problems/needs by focusing on few areas first with clearly defined goals. Then, you can continuously adjust your strategy and expand the scope of digitalization for your business. For example, many companies would like to reach and engage with their customers via digital channels, such as social media and email. However, they don’t know how to send personalized emails to the right customers or prospects at the right time. If this is your major concern, you may use digital marketing software, such as HubSpot and Marketo, to automate your digital marketing campaigns. There are also other options in the market. Of course, you may also take a look at the trends in your industry. For example, how do other SMBs in your industry digitalize their business process and customer experiences? What are the popular digital technologies your business partners or competitors have adopted? By monitoring trends in your sector, you can answer these questions.
Comparing digital options — the chatbot example
Second, compare different options based on your feature needs, resources, and budget. Once you know what you want, you will need to adopt the appropriate digital technologies. You may compare at least two or three options within your budget. For example, you would like to adopt chatbot to answer your customers’ or prospects’ questions, you can search online and compare features and prices. It’s fine for some people to wait for an email reply from customer services department for several hours or one day. However, some customers would expect immediate help. That’s why AI-driven chatbot software becomes very popular nowadays. Chatbots, which are also called virtual assistants, are used in place a human to conduct specific tasks or provide information based on written or spoken requests. Chatbots can help companies with all sizes to respond to customer and employee inquiries. However, SMBs’ feature needs, budgets, setup, and installation differ from enterprises. If you would like to adopt a chatbot software, you may visit review sites to see the ratings and features in order to compare options and choose the one that is the right fit for you.
Overcoming employee resistance
Third, encourage digital transformation adoption within your company by focusing on perceived usefulness/benefits and ease of use. Resistance to change is one of the common obstacles for technology adoption, because some of your employees may be used to the ways they have done things in the past. In addition, there might be a learning curve for everyone to learn to use a new technological product. Thus, your employees may have fears about using new digital tools. Based on Davis’ (1989) technology acceptance model (TAM), perceived usefulness (PU) and perceived ease of use (PEU) are the key factors that affect organizational acceptance of modern technology. In order to encourage company-wide adoption, you may focus on the benefits/usefulness and ease of use of a specific kind of digital product.
For example, you would like to adopt digital collaboration tools (e.g., Slack) to provide a centralized place for your employees to communicate and share files in the remote work environment, you can emphasize on PU and PEU when introducing the new tool to them. Basically, digital collaboration tools foster teamwork by providing an online hub for conversations, the sharing of ideas and the transferring of files. It allows both one-on-one conversation and group discussions. Using these tools can allow every team member tracking the histories of communication at one centralized place, instead of taking a look of numerous emails in their mailbox. Compared to traditional emails, convenience, efficiency, and transparency of communication are the benefits of using digital collaboration tool. It’s also very easy to learn and to use. If you have decided to adopt it for remote work, it’s important to take time to communicate with your employees about the benefits of the new technology, as well as the easiest ways to use it.
Provide training and support
Fourth, provide appropriate trainings and support to your customers and employees. Successful digital transformation requires digital knowledge and skills. Therefore, employee and customer education are very important. Internally, you can encourage your employees to watch online tutorials, attend technology workshops/trainings, and take online classes (e.g., consumer behaviors in the online environment, digital marketing, digital skill, digital analytics classes). Or, you can have the tech savvy employees to help their team members about how to use the new technology. Externally, you can use multiple customer service channels to help your customers in the tech transition process.
For example, some banking customers are not used to online banking or mobile banking. All the sudden, they have to setup their online banking accounts or download mobile apps amid the pandemic. This makes some banking customers very nervous and don’t know what to do. Therefore, some banks use their call center and remote assistances to help their customers to setup their online banking accounts. When their customers call the call center, their staff can have the callers share computer screen with them with a remote assistance software and walk them through. For customer education purpose, you may also post “how-to” articles or demo videos on your website or organizational blog. For example, banks can post step-by-step guides (e.g., mobile banking user guide) and mobile banking demo videos online.
Identify key performance indicators to measure success
Finally, continuously evaluate the results and adjust your digital strategies. It’s imperative to choose the right and measurable key performance indicators (KPIs). As I mentioned earlier, you can focus on few areas first. If you have adopted automated chatbots on your website in order to improve customer services, your KPIs for this initiate may be chatbot activity volume, bounce rate, retention rate, chatbot conversation length, interaction rate (the number of messages exchanged as an indicator for customer engagement), goal completion rate (e.g., clicking on a call to action/CTA button, filling out a form, making a purchase), and customer satisfaction rate. Some chatbots would ask the users a question at the end of the session: Are you satisfied? Users can simply choose “yes” or “no”. If you have adopted digital marketing software to send out automated emails to prospects and customers, your KPIs could be email delivery rate, open rate, click-through rate (CTR), bounce rate, conversion rate, forward/share rate, and campaign return on investment (ROI). Overall, if you feel the initial steps for your digital transformation strategy are successful, you may expand the scope and adopt more digital technologies for your organization. The technological trends and demands are quickly evolving. Therefore, your digital strategies need to be flexible.
In conclusion, the trend for digital transformation will continue. Omnichannel marketing, cloud computing, integrated platforms (e.g., integrated customer relationship management/CRM system), robotics, machine learning and AI-driven data analytics/marketing/automation will be the mainstreams. Thus, I would encourage every SMB to embrace digital transformation in order to gain competitive advantages and thrive in the fast-paced, digitalized business environment.
Reference
Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS Quarterly, 13(3), 319-340.
Posted by Ming-Yi Wu, Faculty