4 Reasons Why Digital Fears Could Lead to Small Business Failure
In an article written by Mr Sachin Dev Duggal, Co-Founder & CEO, Builder.ai for SMEStreet, the digital transformation is well explained.
Article by Mr Sachin Dev Duggal, Co-Founder & CEO, Builder.ai
Having a business today without an online presence is like owning a plant and refusing to water it. Post COVID-19, it isn’t alarmist to say that small businesses who procrastinate with digital transformation due to their fears of digital will struggle to stay competitive.
According to Cisco’s 2020 Small Business Digital Transformation study, 46% of small businesses with the highest level of transformation were thriving and transforming during the pandemic. Meanwhile, 44% of those lagging behind in digital initiatives may have to shut down soon.
But many small businesses around the world remain apprehensive of the change and this holds them back from being digitally minded and digitally successful. Let’s look at some of these fears.
They worry digital transformation means disruption
The benefits of going digital are proven: higher efficiency, faster processing times, better collaboration across teams, fewer errors, lower operational costs, greater customer service, the list goes on. However, if these benefits aren’t conveyed to individual employees and teams, this can cause resentment in those being impacted – fear of changes to their job, being replaced by machines, learning new skills or new ways of working. Left unchecked, these fears result in significant organizational resistance to change and threaten any ongoing transformation efforts.
They aren’t sure if it’s worth it
The Cisco study also found that three-quarters of small businesses were still in the early stages of digitization. Accelerating the digital competencies or maturity of half of these small businesses could be an economic booster: contributing an additional 42 percent growth or $2.3 trillion USD to the GDP of these markets, while their economies could increase by 5.6 percent by 2024.
But not all small businesses can afford the resources necessary to transform and naturally, they aren’t sure if digitization will be worth it. These businesses can look at market trends, customer preferences externally and evaluate the scope of product/service improvement and key business challenges internally to do a quick cost-benefit analysis. Every business must decide for itself whether digital transformation makes sense for them. And if it does, they need to determine the speed and magnitude of transformation they prefer. I do hope they choose a digital future.
They feel helpless at the lack of a digital roadmap
A lot of small businesses don’t feel like they have enough digital expertise or guidance to build a digital roadmap. While it isn’t advisable to jump into software development unprepared, delaying the inevitable only exacerbates the situation. In reality, the majority of a digital strategy is dictated by your business, its needs and vision alone, so there’s no reason for dilly-dallying. Benchmark current processes, account for each one and prepare for a long-term adoption of digital intelligence (as well as the skills and jobs both inside and outside the company) you’ll need to make the entire process a success.
Additionally, most no-code/low-code development platforms today make the process of building software quite simple; small business owners and founders don’t need to be expert coders to take their business online anymore.
As technology transformed businesses last year, we’ve started to see what late Stephen Jay Gould termed as a “punctuated equilibrium” in evolutionary biology, something that has been stable for a long period of time gets disrupted rapidly until it settles into a new balance or equilibrium. Innovations have flooded the market and rapid market shifts have left businesses no choice but to evolve until they find new stability. But this evolution can’t happen if small businesses don’t let go of their digital fears.
Here are four reasons a refusal or delay in digitizing could lead to failure for small businesses:
1. Missing out on effortless revenue: Having an app or website means that customers can engage with a business anywhere, anytime. That means, small businesses don’t have to worry about the time and resource limitations – or excesses – that come with hiring traditional web development agencies. Why spend more in overtime pay or electricity bills when products and services could sell themselves through a digital platform?
2. Unhappy customers due to poor products/services: Customer needs change over time but businesses often won’t realise it, until they begin to rapidly lose customers. Enter the power of data. Data, captured through millions of devices, helps you gain valuable insights like service feedback and customer preferences to continually improve your products and services. This data can also help small businesses offer customized recommendations to boost sales and add that “wow” factor for customers.
3. Paying more for less efficiency: A lot of manual day-to-day operations are redundant, painfully slow and resource-intensive. But businesses that aren’t digital yet have no choice but to pay staff extra to perform tasks that could easily have been automated. These tasks, such as managing deliveries, stocking products and bookkeeping, can easily be automated – saving hundreds of man hours every month and helping employees to focus on more critical tasks that impact the business.
4. Losing market share to digitized competition: Today’s customers expect to be served anytime, anywhere, in the format and device they choose. Since it’s their journey that dictates business strategy, small businesses who can’t keep up with these always-connected customers lose business and eventually, market share to digitally mature competitors.
According to a recent study by IDC, two-thirds of the CEOs of Global 2,000 companies will shift their focus from traditional, offline strategies to more modern digital strategies to improve the customer experience before the end of the year – while 34% of companies believe they’ll fully adopt digital transformation in 12 months or less. This threatens the future of small businesses across the globe. Unless they fight back and go digital.
Today, companies are leveraging technology to open new markets, make employees and processes more productive and create new competitive advantages on top of the more obvious benefits like higher efficiency and lower costs. They’re working towards the digital future. But this future will be incomplete without small businesses, who are the true backbone of the global economy. Here’s hoping that they’re ready to take that digital leap of faith, before it’s too late.