Digital transformation is essential for all companies, from small to big. We describe digital transformation as incorporating digital technologies into all aspects of a business, resulting in fundamental changes in how companies function and provide value to customers. Beyond that, it is a cultural shift that necessitates companies constantly challenging the status quo, experimenting often, and being comfortable with failure. This usually entails abandoning long-standing business processes on which businesses were established in favor of relatively new methods that are still being defined.
Much before COVID-19 became widely spread worldwide, one of the most potent factors reshaping the global economy was the digitalization of companies and their operating models. Information and communication technologies (ICTs) have progressed steadily since the early 2000s. Their increasing connectivity rates have aided the advent of cloud and mobile networks, revolutionizing how businesses use computing resources and interpret information.
If there were any remaining questions about the importance of digital transformation to business survival, the coronavirus has put them to rest. Most communications with consumers and employees must take place remotely in a contactless environment. Except in exceptional cases, working digitally is the only way to remain in operation during mandatory shutdowns and restricted activity. The virus intensified these already-established patterns mentioned previously.
The pandemic has posed a challenge to businesses in a variety of industries. These companies have been forced to change their internal operating processes and have been under intense pressure to sell their goods or services across digital channels. Companies have undergone significant transformations and have adopted strategies focused on emerging technology in a short period. Now, it is either go digital or go dark.
The Effect of Covid-19 Over Businesses
The pandemic is a wake-up call for companies who have been hesitant to accept the digital transformation and are now woefully unprepared. These digital laggards are now struggling to transition their operations and workers to a virtual world, on top of the burden of potentially health-compromised staff, a rapid and drastic decrease in demand, and complete economic instability.
Businesses that had established and implemented digital strategies before the pandemic can now outperform their less competitive rivals. That is not about underestimating the COVID-19-related difficulties they are currently facing, regardless of their existing degree of digital maturity. Going digital isn’t a once and all-cure for anything that ails companies in the current economic climate. They do, however, have far more resources at their disposal to not only survive the storm but to emerge more robust because of it.
In the recently published report, SMEs Digital Transformation in the EaP Countries in COVID-19 Time: Challenges and Digital Solutions, 43 respondents from 6 countries have been asked several questions about digitalization in their business. When they’ve been asked whether digitalization helped SMEs during Covid-19 or not, all respondents, regardless of their country of residence or the industry in which they operate, agreed that digitalization assists SMEs in surviving under COVID-19 conditions (100 percent of respondents).
However, a considerable proportion of respondents (20.8 percent among those who completed the online survey and roughly the same proportion among those who participated in the interview) stated that those who had already used them before the crisis could begin using online tools to turn their businesses faster. Just a few could rapidly “reconfigure” the company when the business model was not centered around digital devices.
The vast majority of respondents (87.5 %) agree that the government should assist SMEs in adapting to digitalization. Many skeptical of such state assistance indicate that it often comes with time-consuming bureaucratic processes that make it virtually impossible to receive. The possibility of state support in the form of digital services piqued people’s interest the most.
According to the respondents, when it comes to the challenges, the biggest obstacle is a lack of understanding of using digital technologies and incorporating them into business activities. SMEs, unlike large corporations, do not have the resources to recruit experts to introduce and monitor the usage of digital technologies. In most cases, SMEs are unable to channel financial and human capital toward digitalization.
Advantages of Digital Transformation
Increased transparency is one of the first things that comes to mind. Digital transformation let big data analytics to provide organizations with real-time information, greater visibility, and insights into their operations, especially the performance of their people and properties. When everyone on the team has access to all of the data, they can more easily exchange ideas and status reports and start brainstorming. It also prepares the groundwork for more productive collaboration.
Collaboration is also easier in digital. With the help of digital technologies, you can begin to see trends and understand why some strategies are more successful. For example, digitizing the lead generation activities (as many inbound companies do) increases sales and marketing effectiveness. Sales receive a list of leads, and marketing can analyze and decide the targeted audience based on the lead results. Based on a customer’s previous experiences with your organization, you can evaluate and review customer-related data and customize their experience accordingly.
Organizations become more agile as a result of digital transformation. Businesses will increase their agility with digital transformation to maximize speed-to-market and implement Continuous Improvement (CI) techniques by borrowing from the world of software growth. This allows for more rapid progress and adaptation, as well as a path to improvement.