The term ‘digital transformation’ is so commonplace nowadays that it’s difficult to remember a time when it wasn’t in our vocabulary writes Greig Johnston, CEO of Vidatec.
In recent years, numerous businesses have built solid growth strategies around digital transformation because they understand it can help them reach their target audience quickly and effectively, establish a solid customer base, improve processes and automate workflows, and enable diversification and expansion.
In the post-pandemic world of work, however, as we continue to reinvent how we connect, conduct business, and live our lives, it’s time for SMEs to ditch digital transformation and move to digital evolution.
That’s because digital transformation implies a disruptive shift, which is a big risk strategy if you don’t get it right. Instead, SMEs should adopt an evolutionary mindset and focus on the continual adoption and refinement of new and emerging technologies to improve business efficiency, reduce costs, overtake competitors, and achieve better outcomes.
Why digital evolution?
According to Harvard Business Review, of the annual $1.3 trillion spent on ‘digital transformation’ pre-pandemic, an estimated $900 billion was wasted. When the pandemic hit, and in full crisis mode, many companies increased digital spending to revolutionise their digital offering, boost their online presence, and simply survive. But without robust long-term strategies, many of these companies are now stuck.
We see it all the time at Vidatec. For example, a medium-sized leisure and tourism company invested big in a website and online booking system, but progress has stalled and booking numbers are stagnant. With digital evolution, this company could have used advanced chatbots and automated workflows to help customers book trips, find information and quickly resolve queries. This could be combined with analytics and machine learning to gain customer insights and tailor marketing campaigns for a more personalised experience. The result would likely be increased revenue, improved margins, and an optimised back end of the website – freeing up time for further innovation.
The key benefit of digital evolution
A key benefit of digital evolution for SMEs – especially those looking to scale rapidly – is that it’s generally more cost-effective because you’re evolving an existing programme, rather than scrapping it and starting again. This approach also tends to be a better use of employee time and capacity, with the added benefit that your people are free to focus on the next phase of innovation (as in the case above). This is especially important in a cost-of-living crisis when budget-holders are being driven to ‘sweat assets’.
The key shifts needed for digital evolution
With digital evolution comes a new long-term way of thinking – very different to the ‘go big or go home’ digital transformation mindset. To ensure your evolution journey is successful, your SME could consider the following key shifts.
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Shift 1 – Objective setting
Before embarking on your evolution journey, ensure there is clarity and alignment on the destination point and an understanding of the key milestones along the way. Create a roadmap that ensures everyone can remain focused throughout your journey and that you can track progress.
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Shift 2 – Mapping your digital estate
Map your existing digital estate – including platform details and technology stack – and continually revisit. The use of analytics and customer surveys can also play a key role in analysing the effectiveness of your existing technologies.
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Shift 3 – Skills development
Carry out a robust skills/gap analysis to uncover the skills required to achieve your objectives and technology capabilities. Ensure you enrol relevant stakeholders – including your HR and PMO partners – and underpin your change plan with robust communication, engagement and appropriate training and development opportunities.
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Shift 4 –Business alignment
The best way to practice digital evolution – and maximise your investment – is to break down any silos and ensure full business alignment.
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Shift 5 – Financial mindset
Finally, it’s so important to understand that digital evolution requires a totally different financial mindset to digital transformation. Digital evolution needs regular, sustainable long-term investment, over a period of time to create meaningful improvements.
SMEs everywhere must move away from the old, outdated concept of digital transformation. Digital evolution will ensure SMEs can continue to evolve at a steady and sustainable pace in service of their customers and with a people-centred approach.
About the author
Greig Johnston is the CEO at Vidatec and a former CTO. He has worked in the technology sector for over 25 years, buying and selling technology services. He specialises in helping businesses of all sizes develop digital strategies that deliver help technology leaders across many sectors mitigate risk, reduce cost and increase revenues.
