Digitalization transforms the way businesses bring together customers, data, and processes. Small businesses that embrace digitalization can expect to see average revenue gains of 26%, according to a recent study.
Digitalization is a buzzword for businesses today, but it is also a long journey that can be met with some resistance from employees and stakeholders alike.
Still, small businesses that have forged ahead are optimistic about the impact of digitalization on their bottom lines.
They expect digitalization to help them raise revenue by an average of 26%, and save an average of 22% in costs, a study by the Association of Small & Medium Enterprises (ASME) and Microsoft Singapore found. 1,057 owners and key IT decision-makers of small businesses in Singapore from 23 industries, ranging from education to logistics and healthcare were surveyed and they felt that digitalization helps them create value in these 4 areas:
1. Engaging customers
A significant portion of consumers are savvy digital natives, and their numbers are quickly increasing. Naturally, businesses with an online presence have the upper hand at appealing to this key group.
But digitalization goes beyond creating a website, Facebook or Instagram profile for your company. The magic of digitalization comes with the data it collects. Digitalization generates insights to help businesses understand their customers and gauge the effectiveness of marketing campaigns.
This is invaluable for small businesses with modest marketing budgets. Advertising in the online space is more affordable than in a traditional newspaper or magazine. It is more targeted as well. Businesses can select the type of customers they would like to push products to, based on age, location, and preferences.
The web data that is collected from customer interactions with your online assets can also translate into valuable information as to who your customers are and what they like about your business.
2. Optimising processes
When asked to name the top benefit of digitalization, a third of the study’s respondents said they wished to increase the efficiency of their business operations.
There are a myriad of accessible cloud services in the market that can help businesses manage workflow, easily access data and consolidate key applications. These programs were previously only available to larger organizations that could afford the hardware and internal IT teams.
“Thanks to the cloud, what was formerly reserved for big companies with big budgets is now available to businesses of all size,” said Mr. Gerald Leo, Director for Commercial Partners and Small Medium Enterprise Group of Microsoft Singapore.
3. Transforming products and services
Digitalising could open an owner’s eyes to new revenue streams and improvements to current products, based on direct feedback from customers.
These insights could secure a business’s longevity as it enables you to meet changing customer expectations. By staying attuned to your customer’s needs, you can increase customer satisfaction with service improvements.
When it comes to transforming products and services it might be something as simple as using accounting software to automatically generate an invoice. The next level could involve adding an e-commerce function to your business website or improving a product with an app.
4. Empowering employees
Employees’ time can be freed up from manual processes so that they can channel more efforts into activities that can help grow the business. Employees and managers who are resistant to digitalization may simply need guidance. Without training and know-how, going digital may seem like an arduous task, especially for older employees.
In-house programs and briefings to explain why digitalization is necessary can help soothe nerves.
Small businesses can also tap on grants, such as the Infocomm Media Development Authority’s SMEs Go Digital program. They should also visit the SME Digital Tech Hub to familiarise themselves with new technologies, such as artificial intelligence.
Digitalization is a unique journey for every business. For businesses that have not taken the first step, it is never too late to start.