4 Digital Transformation Best Practices for Small and Mid-Sized Businesses on a Budget

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November 29, 2022 Business

Digital transformation has become a business necessity in the digital era that we are living in. Businesses across different industries are adopting the use of digital technologies to improve workflows, processes, practices, and models. This is done with the goal to improve productivity, enhance customer experience, streamline processes and add value to various areas of the business. Fintechs in particular embrace digital transformation to respond to the customers changing needs as well as gain a competitive age in this digital age.

The good thing is that digital transformation isn’t reserved for big corporations. Small and medium-sized enterprises can experience exponential long-term growth by enhancing business performance through digital transformation. However, the process can feel overwhelming when you put finances into consideration. But, it doesn’t have to be. SMBs with a limited budget can adopt digital transformation cost-effectively with these four best practices.

Integrate technologies with existing systems

If you want to digitize money management in your business, integrating an online bank account into the existing accounting software would be less expensive than investing in new software altogether. Integrating an online bank account from one of the best payment service providers such as Airwallex or Statrys allows real-time transaction synchronization. This gives you a real-time status of your account and improves the accuracy of the business account records. In addition, digital payments lead to enhanced cash flow. This is especially beneficial when you receive or make cross-border payments in multiple currencies. What integrating an online bank account with your existing accounting software does is centralize money management into one system that is easy and cheaper to maintain.

Having multiple disparate systems only makes your business technological system more complex and locks data in silos. This is because these systems have different formats and so they speak different languages. However, integrating new technologies with existing systems makes communication between different systems in the organization seamless. It also makes collaboration and upgrades less complex and cheaper. Your best practice in integrating technologies with existing systems is to identify technologies that your workforce is familiar with. This makes the process cost-effective in that money and time for user training are reduced.

Understand your goals and priorities

One of the major misconceptions among small and medium-sized businesses about digital transformation is that they have to digitize every process and workflow at a go to be successful. Another misconception is that they need to adopt every new technology that emerges to remain competitive. The truth is that investing in every other new technology that promises better results can make you waste a lot of money on upgrades that don’t add any value to your business. Likewise, digitizing everything at once can be unnecessary and expensive.

The best practice is to understand what you hope to achieve with digital transformation. After identifying your business goals, list them according to their priority. The goal is to address the most pressing needs that will bring more value first before moving to the next. For neo-banks, enhancing risk management could be more important than optimizing operational efficiency. Thus, incorporating data analytics tools could take priority over automating some employees’ tasks. Adopting such a step-by-step approach allows you to utilize money and resources in a phased way. This ensures that you don’t strain your budget and resources unnecessarily.

Make insights and data-driven decisions

Before deciding on the technologies to invest in, it is important to make well-informed decisions. Moreover, that starts with understanding the needs of the people and parties involved. For starters, gather insights from all the departments involved with the target technology. For instance, if you are planning to invest in a new sales and marketing tool, seek to understand the pain points of the users. This will unlock valuable insights into which features will add the most value to the department. In addition, it is important to get views from the top management and key decision-makers. Digital transformation starts with key stakeholders’ buy-in. Besides getting their approval, getting their views could lead to cost-saving suggestions.

Another tip is to make decisions that are backed with data. For instance, if you want to invest in technology that helps you improve customer experience, data can help you understand your customers’ needs. This way, rather than investing in expensive technology that doesn’t meet the objectives, the insights gathered help you narrow down on technology solutions that your business truly needs. So, improve data collection and analysis by unifying systems to break down data silos. In addition, invest in low-cost data analytics tools such as Tableau, Zoho analytics and Microsoft Power BI among others.

Work with an expert

Digital transformation without a dedicated IT team can be quite overwhelming. Unfortunately, hiring an in-house IT team can be a far-fetched dream for small and mid-sized businesses operating on a limited budget. However, you can look for a reliable technology partner to help you implement your digital transformation strategy.

A technology partner that has extensive experience working with SMBs can deliver your strategy cost-effectively by taking the guesswork out of the way. They will analyze your technology needs against your existing infrastructure and recommend solutions that are not only compatible but also those with high ROI and greater savings. For instance, a technology consulting company working with Fintech such as neo banks can suggest developing a new app. This creates a new revenue stream while helping improve the customer experience at the same time. In addition, an expert can help you avoid hidden costs to ensure that you remain within your budget.

Another area that an expert proves valuable is in determining digital project costs and creating a long-term budget. Even when you have to accomplish short-term goals, having a full picture of the long-term goals is equally important. Having a budget in place allows timely budget adjustments and allocations, which saves money and resources in long-term project implementation.

Conclusion

Digital transformation in the digital age is crucial for businesses of all sizes if they are to remain competitive. However, for SMBs on a budget, it can prove daunting and overwhelming. The good news is that these businesses can take a cost-saving approach to adopt digitization and evade being left behind. The approach can start with understanding the organization’s goals and gathering data and insights to inform decisions. Additionally, investing in technologies that integrate with the existing infrastructure and working with an expert brings greater savings.