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Friday, October 7, 2022

SME digitalization: attend to the initial, small steps

By Song Nghi

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Digital transformation has always been a tumbling block for small and medium enterprises (SMEs) as they often aim high while having limited financial resources and manpower. Failures by some SMEs in digital transformation often stem from their overlooking “small” targets and their mechanical usage of technology.

Digital transformation is often deemed classy and trendy. When convincing SMEs to acquire  new products and services associated with digital transformation, consultants and service providers often depict a beautiful picture which often lacks details.

Don’t be too ambitious

Many SME leaders feel overly excited about digital transformation when presented a beautiful picture with numbers, charts and goals that all look achievable. Magnificence and modernity are key points associated with obtainable goals that service providers depict.

However, when taking to digital transformation, several obstacles will surface, prompting many SMEs to call it quits. To achieve high targets, one must be fully equipped, from technology to high-skilled manpower, which are not easy to obtain. The workforce readily available is not capable, while recruiting new tech-savvy staff takes time.

Next comes the disappointment as the big goals are still far from realization after some time adapting to digital transformation. This mood may prompt SMEs to cut short their investment in digital transformation instead of sticking to the initial plan. When this happens, digital transformation will get stranded halfway.

If the gloomy situation persists, the workforce will tend to return to the old way when digital transformation has not been introduced. Worse still, there are cases where SMEs and service providers trade barbs over the failure to achieve the goals. If the goals are not specified from the start, there will emerge difference between an SME and the service provider in perceiving the targets, resulting in protracted disputes.

Due to the limited resources, an SME bracing for digital transformation needs to study and envision well the goals. Attending to small targets and phased implementation will make it easier and relaxing for both leaders and employees when taking to digital transformation. Instead of setting out big goals that are vague and difficult to assess, breaking down the big goals into small targets in phases will entice all stakeholders in an SME to pursue digital transformation as such small targets can all be attained one by one. This way will psych up all with stronger confidence.

For example, when targeting digitalization and a paperless or paper-light office, it is required to set out specific goals like how much printing ink and paper will be saved. Alongside document digitalization there must be the goal of data sharing and data management.

Certain enterprises have applied digitalization but failed to achieve data sharing, whereof the business division has to knock on the marketing division for data, and to ask for graphic designs from the design division. The absence of a data sharing process may lead to a new business policy change not being updated to the marketing division, or new graphic designs for the enterprise not automatically known to both the marketing and business divisions.

A simple target like saving on printing costs upon digital transformation should also be planned and achieved. For example, for documents that need to be printed out, one should mull if smaller-size sheets can work instead of larger-size ones, if an A5 sheet can replace an A4 one, which will halve the amount of paper required for each year, let alone a smaller cost for printing ink. Small and specific targets when realized will gradually add value to the digital transformation.

Don’t totally count on processing technologies

Automation is an important target in digital transformation. Automation requires the application of technologies for different processes like customer care, marketing and sales.

In reality, certain enterprises after equipping themselves with automation tools have become overly reliant on such tools without sparing any time to analyze feedback for necessary adjustment.

Lately, an enterprise has become well known for its store chain offering bedding items that have won customers’ confidence, but its after-sale team, heavily relying on automation tools, has vexed many customers. Sales staff of the enterprise, seemingly under a pre-set scheme, have periodically made phone calls or sent SMSs to customers offering free vouchers but on condition that those customers place additional high-value orders.

This mechanical customer care activity by the enterprise has backfired. Many customers have blocked the phone calls or reported spams for being repeatedly annoyed, after they had given responses stating that they had no demand for more products, and thus no need for such vouchers. In addition, the cost born by the enterprise for this service is high, given the numerous phone calls and SMSs, plus the manpower required for such an activity, as the enterprise’s customer base amounts to hundreds of thousands.

This case is a good illustration for the half-done digital transformation that fails to deliver results, let alone being counter-effective. When investing in marketing automation, the enterprise should have assigned staff to analyze customer feedback, allowing the after-sale team to map out suitable policies to care for different groups of customers. This important step has been skipped, however, resulting in the mechanical activity to send SMSs or make phone calls.

In a similar case, an enterprise when undergoing digital transformation has acquired tools for e-mail marketing. However, staff assigned to this task are trained to operate the outward service only, sending e-mails or newsletters but not dealing with inward feedback from customers. Feedback such as whether the recipient’s e-mail is still active or not, or if the recipient click on the e-mail received are those functions available with professional e-mail marketing tools. Regrettably, data on the system invested by the enterprise are not properly dealt with. Certain enterprises spend heavily on the system but fail to exploit data from customers due to the lack of manpower to deal with such feedback after sending e-mails. There are instances of enterprises sending e-mails to addresses that have not been updated for 20 years.

As such, no matter what tools are employed and what level of automation is achieved, the important aspect is to have staff assigned for analyzing and dealing with data sent back from customers. Dealing with data will help enterprises to see where they are standing and what is needed next in the process of digital transformation.

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