The Importance of Digital Transformation for SMEs

What matters and a strategy to make it a reality for small and medium-sized businesses

As consumer behaviour changes, small and medium-sized businesses (SMEs) need a clear roadmap for adopting new technologies. This is the core of digital transformation.

A 2024 Gartner survey of more than 3,100 CIOs and technology executives found that only 48% of digital initiatives meet or exceed their business outcome targets. Additional research suggests that market pressures are the main driver of digital transformation.

Below: what digital transformation means, its advantages and challenges, examples by industry, the main technologies, one Go Wombat project, and three steps to start.

What Is Digital Transformation?

Digital transformation means rebuilding a company's business model, operations, products and marketing around digital technologies and data.

Companies now generate large amounts of information, and digital tools collect, store and process it. With enough data, big data analytics becomes possible.

Digital transformation is not the same as automation. Automation changes one process; digital transformation covers all of a company's operations.

Take a library. A librarian looks up a book in a paper card index and then goes to the shelf. With a digital catalogue, the same search takes seconds. That changes one process, so it is automation.

Digital transformation would mean digitising the books, building an app for reading them, and studying how readers use the app to improve it and to see which books and services interest them most.

Advantages Of Digital Transformation

Statista tracks worldwide spending on digital transformation; in 2022, that spending was forecast to reach $1.78 trillion.

Customer experience improvement

Customers drive digitalisation: they compare the service they get from different companies. Digital tools let you measure service quality and understand your customers better.

Digital tools also make a more individual approach possible. Chatbots are a good example.

Digital transformation also changes how employees work and can make them more productive.

Business processes optimisation

Digital transformation can cut costs and make a company more efficient. Companies that ignore modern technologies risk falling behind competitors that adopt them.

It also makes a company faster. Make changes when you can, not when you are forced to. Digital processes let a company react sooner, make decisions on time and give customers relevant information quickly.

Advanced Capacities

Digital tools add capabilities a company did not have before. Cloud technologies let several teams work on one project and share resources. Process mining finds bottlenecks in business processes so you can fix them.

Working with data

Every company now produces large amounts of digital data. To use it, you have to collect, structure and analyse it. Digital transformation brings in technologies such as Big Data and Artificial Intelligence (AI) that make large data sets manageable.

Better Partnerships

Digital tools make it easier to work with partners wherever they are and to manage a business from anywhere. The applications and web services that connect partners can be custom-built by software development companies like Go Wombat.

To plan your digital transformation with Go Wombat, contact us.

Digital Transformation Technologies

Cloud computing

Cloud storage and cloud-based services give employees access to documents and files from anywhere.

Commoditised Information Technology

Standard, widely available IT products and services can be configured to fit your business processes.

Mobile platforms

With mobile applications, employees can work wherever they have an internet connection. For field staff, an app can replace paper forms.

Automation

Robotic process automation (RPA) uses software bots to take over repetitive, routine tasks, which reduces errors.

Emerging Technologies

Newer technologies such as artificial intelligence and machine learning, the Internet of Things, big data, the Internet of Behaviour, blockchain and AR/VR (augmented and virtual reality) can add new features to your products and help you keep customers.

Examples of Digital Transformation by Industry

Digital transformation can help SMEs in any industry.

In healthcare, it has brought patient portals, telemedicine, virtual visits, e-prescriptions, and even virtual reality for pain management and simulations.

In the hospitality industry, hotels have added mobile check-in to cut waiting times, AI for facial recognition and personalised service, and the Internet of Things for smart rooms where guests control devices.

In the insurance sector, online portals give instant quotes and let customers file claims. Predictive analytics helps insurers anticipate risks and make better decisions.

In the retail industry, augmented reality helps customers choose products, and mobile apps reach them with relevant push notifications. IoB and AdTech algorithms analyse customer journeys to help increase sales.

A live Project

Here is a project that shows digital transformation in practice: a platform that helps websites understand their customers.

What We Worked On

It is a cloud data platform built for customer insights, personalised experiences and privacy. It collects and structures data about website visitors, shows what motivates them and uses this to personalise marketing channels, from the first visit to the purchase.

Customers buy and install an app. It shows them what visitors do on their website, what they buy, which products are in more or less demand, how they behave and how long they stay.

Two back-end developers and one front-end developer from our company are involved. Go Wombat didn't create the project from scratch: our task was to improve and modify an existing product. Its main customers are eCommerce websites, which use visitor preferences to improve the shopping experience. The platform stays fully operational while we add new features and polish it.

As for server-side development, one of our back-end developers has created an extension for email marketing. His task was to write code and unit tests, create data flow, and write documentation.

Challenges

The project had no well-thought-out architecture at the start. Our developers had to agree on a unified approach and standard and build a structured architecture. This phase took a lot of time.

The front-end developer is building a new version of the script on the new standard, so customers can configure it to their business needs.

Tech Stack

Front-end toolkit:

React library, TypeScript (a superset of JavaScript that compiles to clean JavaScript output, and it is suitable for larger applications);

ESlint (a static code analysis tool for identifying problematic patterns found in JavaScript code);

Prettier (enforces a consistent code style (i.e. code formatting that won't affect the AST) across your entire codebase);

axios and axios-hook (libraries for building requests to backend);

Material UI (a library that allows us to import and use different components to create a user interface in our React applications).

Recharts (A composable charting library built on React components).

Back-end toolkit

Google Cloud Storage. A service for storing objects in Google Cloud. An object is an immutable piece of data, a file of any format;

BigQuery. Google's cloud-based big data analytics service for querying very large data sets;

Pytest. A full-featured Python testing framework. With the pytest-xdist plugin, developers can run tests in parallel and cut the test suite's execution time;

Unittest. A unit testing framework for checking code before deployment;

Falcon. A high-performance Python web framework for building large-scale app backends and microservices;

Pub/Sub (Publish/subscribe messaging). A form of asynchronous service-to-service communication used in serverless and microservices architectures;

MongoDB/PostgreSQL. Non-relational and relational databases;

Redis (Remote Dictionary Server). An in-memory, persistent data structure store for fast common operations.

If you need to improve existing software or build new software from scratch, contact Go Wombat.

Three Steps To Transform Your Business

Every business is different, and there is no single recipe. These three steps make the process smoother.

Analyse Your Business

Include all daily working processes in the Project Discovery Phase, so the transformation does not hurt your customers.

Then identify your business's pain points, the processes that need to change first. Don't try to transform everything at once.

Prepare Your Team

Your team has to take part in the transformation, and it will not work if people don't understand what is happening. Share the data and market research behind the decision; it makes your plans easier to explain.

Give each team member a clear role and responsibility in the digital transformation.

Proceed To Changes

List the applications and other software you plan to build. Even if you outsource all development to Go Wombat, you need clear requirements. Draw up a rough financial plan: how much you need to invest and how much you expect to earn. This gives you an estimate of ROI.

Once the changes start, track key metrics to see whether the software meets customers' expectations.