It’s been estimated that 75 percent of small and medium business (SMB) decision-makers understand that using digital technology effectively is key to business success, especially in today’s digital era. Finding the right solutions can help a company overcome new challenges, course correct, and better prepare for unexpected changes in business and market conditions. Here are some digital transformation examples to help you see how to empower your people and prepare for the future.
It has become more evident over the past year that investing in digital transformation pays off. SMBs in the process of digital transformation initiatives were much more likely to report year-over-year revenue increases than SMBs still in the planning stage, or those with no plans. Those who are already executing digital transformation are also more likely to see revenues rise faster than their peers.
Some SMBs find it difficult to develop and execute a digital transformation strategy. They might see the “digital transformation” as confusing and over-hyped. Does it mean completely overhauling the technology environment, or moving everything to the cloud? Or does it mean doing what we do today but faster? Is it just about moving from paper to digital processes?
Most SMBs confront many other challenges, even if they have a good understanding of the term. At the top of the list are concerns about integration, security, and just figuring out what works best. Resistance to change and the recurring “lack of” issues – lack of time, money, skills, prioritization, and staff – also get in the way.
How can CFOs overcome these hurdles and help their organizations forge a successful path forward?
There is more to digital transformation than just swapping out different technology solutions. It requires a shift in how you think about, operate, and manage your business to make it more relevant and valuable – and ultimately, to improve performance.
SMB Group defines digital transformation as “how businesses use digital technologies to create new or modify existing business processes, practices, models, culture, and customer experiences to meet changing business and market requirements.” To put it simply, digital transformation is a catalyst for businesses to rethink the structure, purpose, and culture of the business.
We often focus on the business models and business processes first, but it is important to keep in mind that people are the driving force to overcoming digital transformation challenges. The top three drivers to invest in digital solutions for SMBs are keeping up with changing customer expectations, improving employee productivity, and improving external collaboration with suppliers, customers, and partners.
This means that digital transformation initiatives must support improvements for people, not just the process. You can cultivate creativity and growth by helping your employees work smarter not harder, ultimately giving you a competitive edge. Focusing on making work more intuitive and efficient means that employees can spend less time on repetitive and monotonous tasks. They gain more time to better serve customers, think more strategically, and focus on revenue-generating work.
Digital transformation will always be a work in progress – not an endpoint. Businesses and technology strategies must adjust accordingly as conditions change.
The COVID-19 pandemic made this fact more evident. When the pandemic hit home in March of 2020, businesses had to address three main challenges very quickly: how to create safe physical workplaces, how to adjust millions of workers to be productive in remote settings, and how to serve customers virtually instead of physically. There were also unanticipated supply chain disruptions, furloughs, and layoffs to deal with. As time goes on, companies must deal with even more new issues, including hiring difficulties, creating long-term hybrid work environments, and figuring out how, and when customers will return to pre-pandemic behaviors.
The goal of digital transformation is to improve business results, which almost always involves the CFO. Financial professionals must go beyond keeping up with the latest management practices and mastering financial basics to provide effective guidance. They need to serve as strategic advisors to help decision-makers evaluate options and to better understand implications.
Successful digital transformation initiatives start by taking a fresh look at what’s going on in the business, and with employees, customers, and competitors. Perhaps it’s more difficult to recruit and retain employees, or revenues and profits are dipping. Maybe you will miss out on a great opportunity to enter a new market because there are too many workarounds. Or maybe a competitor has introduced a new business model that is disrupting your business. Discovering and zeroing in on specific problem areas can help you set goals to grow and sustain the business.
It is crucial to be able to communicate effectively and work collaboratively across the organization and engage people at all levels. While leaders must be on board to move ahead, employees must buy in to implement new business practices. Partners, suppliers, and customers can also provide valuable input into what’s working, what’s not working, and what changes need to be made.
Client-server software and spreadsheets can help you analyze what has already happened in the business but are often clunky and brittle. On top of that, decision-makers need more than a look in the rearview mirror. CFOs need real-time information and analytics capabilities to steer their business forward. It helps inform overall strategy, and identify, interpret, and execute in response to new trends and opportunities.
Modern, cloud-based financial systems, such as Sage Intacct cloud-based financial management software, are designed to deliver these capabilities. Data only needs to be entered into the system once, ensuring that all users have access to the same, up-to-date information. These solutions are built with open, flexible technology, making it easy for customers to integrate solutions and new capabilities into the core financials program.
The framework facilitates vendor innovation as well, allowing them to embed new technologies into their solutions. For example, vendors can augment their solutions with A.I. (Artificial Intelligence) and Machine Learning to create and enhance predictive analytics and business modeling capabilities.
Using an extensible and flexible platform is key, as it enables you to prioritize changes and add new solutions in an integrated and cohesive manner.
Here are some examples that illustrate practical ways to get started and build momentum for a digital transformation:
Digital transformation is really about business transformation. It is powered by technology, but the right business strategy is at the core of any digital transformation initiative.
Accounting and finance are the system of record for most businesses, pushing executives to increasingly rely on financial teams and CFOs for insights and guidance. CFOs with more comprehensive, accurate and timely financial information are better equipped to understand, predict, and respond to new marketing, employee, and operational requirements. These CFOs are more adept at helping their companies successfully navigate through change.
The modern CFO needs to look for a “whole product” solution - curated, stress-tested, and optimized by a solution provider with deep industry experience that can close the gap in the critical last-mile functionality and get you the insights that CFOs need to transform finance and accounting into a strategic business asset that uses data to challenge the status quo. This whole product solution should be available as-a-service, whether that be software subscriptions, outsourced finance operations, or even technology implementations, consulting, and development.
If you'd like to go more in depth, our eBook, How Can You Transform Finance & Accounting into a Strategic Business Asset? is available for instant download. Find out everything we’ve learned from supporting our incredible customers for more than a decade (most of whom are still with us) and a guide for finance and accounting leaders at all organizations to establish what they should expect in the future.