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Digital Transformation: to be or not to be for SME businesses


In many conversations with business today, it is either about cloud or digital. In the first case, the adoption today is done across all types and sizes of businesses. More than 5 years ago, cloud was called SAAS or OnDemand and was predominantly adopted by large enterprises. We have come a long way. Today it is mainstream, it is all about cloud in all sizes of businesses. Only cases where there is no cloud alternative companies look at an OnPremise solution. At SAP, we also lead with Cloud first towards our customers and prospects.

The other topic, which is the driver for this blog, is the context of digital. What does this mean? What does digital stand for? Is it that everything goes digital; i.e. my HR, my accounts, my operations, my travel expenses? The answer to the last question is of course no. The digital transformation revolves around leveraging available technologies and turning these into a competitive advantage. Many companies have been doing this over the last couple of years and we all know examples of companies that were created in a very short timeframe and became leaders in traditional industries.

What does this mean for you and your business? Changes will come around quicker and quicker. Old & dormant industries will become sexy and agile again as new players will disrupt these traditional markets too. Companies will need to be able to compete in this challenging and changing market with existing and innovative entrants. This is where technology plays an important role.

Based on studies done on the impact of digital transformation, your business could either be disrupted or you could become a company who disrupts a traditional industry. Each and every company prefers to be in the second category for the opportunities that offer potential higher revenues, higher market valuation and higher profitability.

Yes or no?

This raises the question whether this does apply to SME size companies or only for large scale companies. SME companies have an advantage over larger firms in terms of size, complexity and flexibility. They still need to innovate and it could be easier for them to adopt to these rapid changes. When small businesses don’t innovate digitally and don’t try harder, they will not survive. Therefore, it is as important for SME companies to go through digital transformation too.

How to start

As with every change you want or need to go through, the most difficult thing is to find out where to start. No business is the same and neither are the people who manage the business.  As mentioned going digital starts with making sure you have the technologies in house to make this step.

Overall, it is the combination between technologies, business process optimization and the ability of employees to have actionable insight. In other words, to have the right analytical capabilities for each and every user. The combination of these three give businesses the possibility to deliver innovation by redesigning or recreating key parts of their business processes. By doing this your business will be able to gain a competitive advantage. To help you understand where you stand as a business regarding Digital Transformation, you can check this by using the IDC maturity scape model

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