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Author's profile photo Marko Maric

Driving SME digital transformation

Digital transformation is a fundamental modification of business processes – it integrates digital technology into all business areas and changes the way that business operates and delivers value to its customers.

This can sometimes mean adjusting the foundations on how the company runs, from long-standing business practices, to relatively new methods that are still being defined.

These adjustments may include:

  • a change in leadership methods
  • a different way of business thinking and a different approach
  • the encouragement for innovation
  • introduction of new business models
  • the digitization of assets
  • use of technology to improve the experience of the organization’s personnel

What are the drives for SME digital transformation?

Most assets that initiate the drive for SME digital transformation fall under survival and competitive advantage goals.

Top reasons for a small or medium enterprise to invest in the digital transformation are:

Cutting operational costs is also at the top of the list for driving digital transformation. In 2017, over 70% of what the IT government spent in the U.S. went towards operating and maintaining legacy systems.

Leading a digital transformation

The digital transformation is not a finite process.

“Things today aren’t changing linearly; they’re changing exponentially. It’s not good enough that you were fast last year. If you’re not faster this year, you’re going to fall increasingly behind. Agility trumps everything else,” as David Bray says.

This is why business leaders must adapt and comprehend this process as a continuum, and adjust their leadership style in this manner.

They need to become digital leaders.

This transformation does not just mean a more tech-savvy and tech-focused management style. It represents a new culture that drives digital transformation through mentoring, enabling innovation, and controlling more processes.

For the digital transformation in SME to be successful, a clear digital strategy must be defined. The lack of a clear strategic approach is the most common reason why, despite investing in new technologies, many SMEs are still at the risk of falling behind in digital transformation.

Digital transformation expectations

Before engaging in digital transformation, every SME needs to do an internal assessment of its own needs and problems, ones the implementation of new technological processes can resolve, or improve. Business leaders should chart out the best paths to success in order to see which areas are the first in line for the implementation of new technologies.

In a study done by the SMB Group, main goals that are expected of digital transformation are:

  • Improved workplace productivity
  • Improved decision making
  • Improved customer experience
  • Adding a new sales channel
  • Improved new employee recruitment
  • Improved development of new products and services
  • Entering a new market
  • Creating a new line of business
  • Automation of repetitive manual tasks
  • Support for changing regulatory requirements
  • Automating physical systems

In the same study, they have cited that 58% SMBs plan to fund their digital transformation initiatives from existing IT budgets, and 34% say they don’t have enough funds to reach their goals. This is another indicator that the digital transformation needs meticulous planning and long-run strategy to prove worthwhile.


Digital transformation is a continuous process which is unique to every organization. Business leaders need to discover the area where digital transformation can prove most beneficial, and then implement a strategy that will drive a long-term change, and advancement, for streamlining business processes.

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