Digital transformation needn’t to be a cookie-cutter process forced upon all businesses. Here is one expert’s viewpoint.
It is no secret that small and medium-sized businesses (SMBs) form the very backbone of the Asia Pacific (APAC) economy. According to the Asian Development Bank, SMBs account for more than 98% of all enterprises and make up about 60% of the national labor markets in the region.
Meanwhile, the Asia-Pacific Economic Cooperation forum estimates that SMB contribution to GDP ranges anywhere between 20% and 50%, depending on the market in question. In Singapore, that is almost half a trillion dollars being added to the nation’s coffers alone.
That said, it is also no secret that in the face of technological disruption and growing economic challenges, SMBs stand at the center of an important crossroads. While 60% of SMBs in APAC have started to embrace digitalization, this year’s Cisco APAC SMB Digital Maturity Index found that 39% of those surveyed had no digital efforts in place at all—putting those businesses at great risk of failing to keep pace with their competitors in the industry. At worst, these companies may not exist in a few years’ time.
Or so the mantra goes.
Such situations encourage knee-jerk reactions—they scream ‘you need to be big, bold, brave and take action now, or face the consequences. Yet, if we were to go around each organization and ask each of them what transformation means, how many different responses do you think you would get?
Personally, I think the word ‘transformation’ can be misconstrued. It suggests a metamorphosis— something dramatic and radical that involves entirely overhauling practices. And that is intimidating, especially when business has been going well. Why fix something that is not broken?
Digitalization, your way and not what others say
With this in mind, maybe it is time that we start thinking about digitalization in increments. And time we stopped strictly adhering to step-by-step guides in the hope that the survivor’s bias for one business will also prove true for our own. The reality, surely, is that there is no rule books and no single definition for what digitalization should mean for any given brand. Think about it—is a florist going to go through the same process as a manufacturer?
Some of the best examples of digitalization that I have seen of late have not been big initiatives: Rather, they are examples where the business had a clear vision for the future, and had taken initial steps towards achieving that goal. Those steps could be as simple as downloading a free app to help streamline payment processes, or deploying a messenger app that helps the organization improve communications. Humble, but no less effective or less worthy of being celebrated.
So, how can SMBs come up with their own definition of what ‘transformation’ should mean for them? What are the questions they should be asking themselves?
1. What do you want? Are you looking to grow your business? Improve your speed to market? Make yourself more competitive? Expand into new markets, or perhaps just better service the ones you are in right now? Start by setting your goals, keeping your key stakeholders (your employees, customers, vendors and partners) in mind. Otherwise, you will have nothing to measure the success of your digitalization against.
2. How do you get there? Once you have settled on a direction, start developing a roadmap towards fulfilling that vision. What are the processes you could be looking to improve and, more importantly, how would that bring you closer to your goals? Everything should tie back to your core business strategy.
3. Where could I go wrong? Digitalization is perhaps one of the biggest forms of change management an organization could undergo, so it requires strong leadership. These leaders are not only responsible for setting the vision, but for helping to operationalize it and for being accountable for the success or failure of projects. When you have that, the team is far better placed to quickly move on to Plan B, and to explore alternative options. After all, when SMB resources are so limited, it is important to get things right as quickly as possible.
SMBs should remember this journey is not a sprint but a marathon—it is all about prioritizing key initiatives and investing strategically to address gaps. And while they need not travel alone, whether that involves choosing to work with partners, societies or government; only they can charter their course, and determine what success means to them. Starting small need not mean that your efforts were any less important: After all, is it not by mastering the basics that we go on to greatness?