There are several challenges that need to be considered as firms race ahead to jump on the digital bandwagon.
More often than not, organisations need to ensure they have clearly charted out their future business strategy and value proposition with due consideration given to:
- Identifying the N5 - new businesses, new products, new channels, new processes, and new people,
- Equipping the value chain to ensure we can deliver on our digital promise of:
- People, and
- Ensuring we are willing to let go of the past, shrug off legacy, and decommission obsolescence, and
- Foremost ensuring we have the right skills, competencies, and leadership in place to take the firm into the future. We need future-ready leaders who can solve tomorrow’s problems.
Digital technology is ever present. It is powerful, capable, and can add significant value to an organisation’s upside. However, this works provided the organisation has done its “homework” on how to utilise it effectively. Annually, millions of dollars of information technology (IT) spend is written off not because the technology was not capable, but because it was not utilised properly. Too often there is an over-reliance on technology to solve issues that have more to do with strategic visioning, governance, empowerment, delegation, autonomy, and compliance.
The digital age has further enhanced the importance of creating a resilient, agile, nimble, and future-ready firm: one that is not constrained by red-tape as well as obsolete policies and procedures.
The SME Opportunity
The digital landscape presents a huge opportunity for the small-and medium-sized enterprises (SME) sector. This includes new venture capital backed start-up firms as well as more traditional firms that have been around for a while. Owner-managed firms in particular have the most to gain. Their biggest advantages are control and size.
- The fact that a vast majority of SME firms are owner-managed lends a high degree of control and ease of decision-making. Unwittingly, while this form of unilateral practice has been traditionally viewed as demotivating for the workforce in times of crisis (and opportunity), this is a huge advantage,
- This speed of decision-making facilitates speed of response and execution to meet present or anticipated challenges. There are no constraints in terms of management committees/task-forces/and a lot of bureaucracy typically associated with larger commercial and multinational setups,
- Hence adoption of new technology can be seized and acted upon to begin with, without much delay. There are tremendous cost advantages and revenue potential in employing technologies that harness the power of:
- Internet of Things (IoT),
- Robotic Process Automation (RPA), and
- Intelligent Automation (IA),
- These technologies allow rapid scale-up possibilities and the ability to serve many more customers at far lower costs across a variety of channels,
- Gone are the days when you required a global presence for distribution. Thanks to the IoT and collaborative business models and strategic alliances, markets and customers can be served internationally. As more and more products and services become accessible online, the requirement for multiple brick-and-mortar sites has become minimal. Thanks to the Cloud, storage and service has become simpler and cost effective,
- The size advantage of an organisation is crucial. Manageable headcounts can be trained, equipped, upskilled, galvanised, and deployed in much lesser time. This adds to agility and nimbleness. Global transformation programmes of large multinationals with thousands of employees usually take months or years to implement—often with the post-facto realisation that technology, customers, and the world in general has yet again moved on!
The SME Challenges
The greatest challenges for SMEs is to change their mindset. Change begins from within and owners must rise to this challenge. There are a few very specific objectives that need to be achieved.
Have a Vision for the Future
The first is to convince yourself that the digital world presents opportunities to identify specific business segments where you can add value as well as understand customers and all the stakeholders in the value proposition.
Transform and Invest in the Workforce
The bigger objective is to shape your organisation to deliver peak performance as a status quo/business as usual. This can only be achieved by transforming the workforce into a creative, innovative, resilient, enthusiastic, and future-ready team that delivers.
It is not about age and not about millennials alone, but about the mindset. This necessitates a radical change in the view of the workforce not as a cost-centre, but as an engine for growth. Hire the best and the brightest, and reward and recognise them appropriately.
Get in tune with the gig economy where possible. There are thousands of very capable senior, mid, and junior professionals available for hire on contract. Take advantage of their knowledge, skills, and ideas. Mix and match. Be flexible.
Indeed, some of the most innovative and dynamic software and technology and social media firms of today all began their journeys as humble start-ups/SMEs.
Mr Salman Ali Hyder is a globally accomplished management consultant with over 25 years of experience advising clients on strategy, growth, and digital transformation. He received his Bachelor in Economics and Bachelor in Electrical Engineering from MIT, and an MBA from the University of Chicago. He is also an Associate Trainer with SIM Professional Development.