Digital transformation is changing how business gets done in virtually every industry – and for small businesses, it presents an unmissable opportunity to solve problems, engage customers and do more with less.
Digital transformation is more than just moving your existing processes from analog to digital. For savvy business owners, it’s a chance to use digital technologies to reimagine how you do business, and optimise your processes for the digital age.
Neil Glentworth is the founder and chair of information and data management firm GWI, a team of independent advisors that specialise in unlocking the value of information and data for government, business and communities. Known for his deep understanding of digital technologies and his practical, no-nonsense approach, Neil says it’s well past time for small businesses to embrace their digital potential.
“Most people don’t like change,” he says, “and they like to hang on to their old ways of doing things. But there’s a quote from Eric Shinseki, a retired United States Army General, that I live by – if you don’t like change, you’re going to like irrelevance even less.”
Not sure where to start? Here are Neil’s tips for getting on the front foot of digital transformation.
Identify your pain points
The starting point for every business undergoing a digital transformation should be an internal assessment to identify what you can do better. What’s your biggest pain point, and how can you use digital technologies to solve it?
“It starts with solving a problem,” Neil says. “It’s that simple. That’s why, when businesses go digital just for the sake of going digital, it never works. You have to find the biggest pain point, the problem that causes the most difficulty for your business and the weakness that most urgently needs to be addressed.
“Once you’ve identified the problem, you need to be willing to make an investment in solving it, and be open to learning new things.”
Neil points to the example of Cannings Free Range Butchers, a Melbourne business that did away with cash in their stores and began accepting EFTPOS as the only means of payment in 2014. Owner Sam Canning made the decision, which was controversial at the time, after identifying that balancing tills and getting to a bank during business hours were consistent problems for his business. Canning also identified hygiene concerns around handling cash.
“Come COVID, they were laughing,” Neil says, “because they already had their contactless payment procedure in place. But that’s an example of a business that identified their pain points and used digital technologies to remove a headache.
“Digital transformation isn’t just about what you’re willing to start doing digitally – it’s about what you’re willing to stop doing. A lot of people go digital but keep trying to do things the old way as well, and it only works if you stop doing the thing that isn’t working.”
Optimise the customer experience
Digital transformation can be a great way to reduce friction. Essentially, that’s any part of buying your products or using your services that makes the experience less convenient for your customers.
“Waiting in a long queue is an example of friction,” Neil says. “Why would I physically queue for something when I could book it online? Why should I go to the post office and stand in line to certify a document when I can do it all digitally?
“Today’s customer expects to be able to have what they want, when they want it. And when they see that someone else can offer them that instant satisfaction, they expect you to be able to do that, too.”
Consider the ways that banks have changed how they interact with their customers over the course of our lifetimes. From bank tellers handling the majority of transactions in person at the local branch, to the ubiquity of ATMs, and eventually the introduction of mobile banking apps and payment systems that allow people to make purchases without even reaching for their credit card, customers have grown accustomed to increasingly connected and convenient service in a relatively short period of time.
They expect that same level of frictionless service when they’re ordering a pizza, checking the weather, booking an Uber or shopping for the types of products and services you sell. So as a small business owner, you need to ask yourself – are you doing everything you can to make life easier for your customers, or are you still making them jump through needlessly inconvenient hoops that could be streamlined digitally?
“Hotels are a great example of an industry that’s ripe for digital transformation,” Neil says. “When I get onto an aeroplane, the customer experience is digital from start to finish – I don’t have to produce a piece of paper or open my wallet to find my credit card. But when I land and check into my hotel, I still have to go through the rigmarole of pulling out my credit card and signing a piece of paper to check in. And yet the risk for the hotel owner is smaller than the risk for the airline.
“So in the course of that trip, I’m dealing with one industry that’s made the experience as frictionless as possible for me, and another industry that’s making things harder for me than they need to be. One of those industries has transformed digitally, and the other one is way behind.”
Another advantage of digital transformation is the opportunity to personalise your interactions with your customers. An Accenture study found that 83% of consumers are willing to share their data to create a more personalised experience, and 91% of consumers are more likely to shop with brands that provide offers and recommendations that are relevant to them.
Digital technologies enable you to do this, gathering customer data with initiatives like digital loyalty cards and fostering customer retention with personalised emails and SMS messages that continue the conversation after purchase and present customers with offers and recommendations that are likely to appeal to them.
“Regardless of what type of business you own,” Neil says, “you can develop a more loyal customer base because you can create a more intimate feeling by personalising your digital interactions. And with a more loyal customer base, you get less lumps and bumps in your cash flow and a more predictable revenue stream.”
Change is the only constant
When you embark on your digital transformation, it’s important to realise that there probably won’t be a crowning moment of glory when the heavens open up and you realise your transformation is complete.
In reality, a true digital transformation is never complete, because technology is always evolving – your ‘new normal’ should be a constant state of digital innovation and adaptation.
“When people talk to me about the digital economy, I tell them there’s no such thing,” Neil says. “It’s just ‘the economy’ now. You have to scan the market and stay ahead of what your competitors are doing, just like you always have.”
At the same time, digital transformation doesn’t have to mean throwing the baby out with the bathwater. While Neil is adamant that businesses should replace traditional processes that aren’t working with digital alternatives, he’s not advocating for a fully digitised society.
“You’ve got to be mindful that there are some businesses that rely on being tactile,” he says. “At the end of the day, there is no substitute for shaking somebody’s hand and looking them in the eye, because people buy from people.”
Ultimately, digital transformation is about making the most out of all of the tools that are available to the modern business.
“If you’re starting your digital transformation journey now,” Neil says, “then you better hurry up. Now’s not the time to bury your head in the sand – now is the time to embrace change, create efficiencies for your business and give your customers what they want.”
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