The terms digital transformation and digitalisation have been bandied about boardrooms since the 1990s.
Big corporates have invested millions in finding ways to carve their niche into the digital marketplace, leading to a misconception that only big industry role-players can afford to invest in digitising their businesses.
The reality is that small businesses stand to gain substantial ground by injecting themselves into the digital space.
And although digital transformation may look different for a small medium enterprise (SME) than it does in the context of big business, arguably there is a case to be made for it to be considered a business imperative.
The saying, if it’s not on social media, it didn’t happen, may be tongue-in-cheek but there’s a nugget of truth in it.
Here are three essential principles in order to thrive in today’s digital economy.
By virtue of being small in size, SMEs are more agile. They are able to pivot when big corporates are a lot less agile and slower to adapt.
This advantage can help SMEs gain a significant competitive edge.
The Covid-19 pandemic accelerated the rate of digital change.
In a study conducted by Mastercard it was found that almost 70 percent of South Africans were shopping more online since the onset of the pandemic and will continue to do so.
As an SME, the idea of building an online store can be intimidating, but open-source technology like Wix, WordPress and Squarespace, allow people to build e-commerce platforms with no coding skills and minimal costs for payment plugins and other optional tools. Instead of a fully-fledged e-commerce platform, SMEs can set up a website with their product catalogue and introduce an email ordering system that can be managed manually.
WhatsApp, Instagram and Facebook Shops are also great alternatives.
Change is the only constant in the digital economy.
In December the Google Play Store reported 66 000 new mobile apps being uploaded in one month.
That’s more than two apps being created every day.
And in South Africa the value of e-commerce transactions is set to surge by 150 percent to R225 billion by 2025.
In this evolving environment, the centrality of innovation cannot be overlooked.
Dark kitchens, for example, also known as cloud kitchens, or ghost kitchens, were an innovation that provided a solution to the inability to offer in-house dining during the pandemic.
By creating a system where patrons could order meals digitally and have them prepared and delivered as takeaways, some restaurants were able to decrease their outlays dramatically and ensure that they were able to retain their staff and sustain enough revenue to remain operational.
The digital economy lends itself to collaboration where SMEs can hone their skills and become specialists in a particular part of the supply chain, rather than trying to generalise their expertise and tackle many areas at once.
Shared office spaces, for instance, are a key example of collaboration at work.
Some remote, co-working spaces allow workers to log in to a system that lists their relevant expertise.
If anyone in that space requires someone with a particular skillset, they’re immediately available.
Furthermore, we’ve seen outstanding examples of small businesses collaborating with micro influencers on social media to market their products.
Partnerships with other small businesses and entrepreneurs who are able to fill a resource or skills gap, could be the answer to surviving the notoriously difficult fledgling years as a small business.
Identify your strengths and your areas of expertise as an SME, then find ways to introduce partnerships that will be mutually beneficial in terms of profitability, knowledge sharing and long-term growth planning.
The results of working together rather than trying to go it alone in volatile economic times, may pleasantly surprise you.
Ben Bierman is a Managing Director at Business Partners Limited.