Small Business Digital Transformation: Definition and Examples

As a small business owner, you have to do more with less. You likely have fewer resources, fewer employees, and a lower budget than large corporations or the unicorns in Silicon Valley. Doing more with less is tricky (29% of business owners say it’s their #1 challenge), but it’s getting easier—thanks to small business digital transformation.

Digital transformation for small businesses can improve efficiency by automating routine tasks, streamlining operations, and reducing costs. 

Are you ready to move your business into the future?

What is digital transformation for small businesses?

Small business digital transformation is the process of integrating digital technology into your organization’s operations and strategy. 

Successful digital transformation may include:

  • Adopting new software and tools
  • Rethinking business processes
  • Harnessing AI (artificial intelligence) 
  • Encouraging employees to adapt to changes
  • Keeping your business flexible so you can make ongoing digital changes

A digital transformation is more than having a website and social media profiles. It requires you to look at every aspect of your business—from the way you gather metrics to how you pay your employees—and hone in on what you can transform.  

Examples of small business digital transformation

“Digital transformation” is a broad term encompassing a range of processes and strategies. Examples of transforming traditional processes include: 

  • Using payroll software to pay employees
  • Transforming your email marketing strategy with software
  • Using customer relationship management (CRM) software to manage customer interactions
  • Taking advantage of accounting software with machine learning 
  • Interacting with customers via text messages

Here are two companies that have been ramping up digital technology—and what they’re doing:

Nespresso: The coffee and espresso machine company has used digital technology to bring customers a seamless digital experience, better understand consumer behavior, and digitally market to consumers.

Sephora: The makeup company uses digital technology to provide the same experience across all channels, including its store, online, mobile, Instagram, and third-party partners.  

Benefits of small business digital transformation

Leveraging digital technologies in your business comes with a string of benefits that range from improving efficiency to meeting your customers’ expectations.  

1. Improve efficiency

Do you find yourself working 60-hour weeks to stay afloat? Do you work with a lean team to manage everything from sales to operations? If so, every bit of increased efficiency greatly affects your bottom line. 

Digital tools can free up your time and resources for revenue-generating tasks. Use digital tools to automate manual tasks, streamline operations, and scale your business. 

For example, full-service payroll calculates employee pay and handles tax filings and deposits in minutes—a fraction of the time of running payroll by hand. 

2. Meet your customers where they are

Many consumers expect convenience, including easy-to-use websites, seamless interactions, and quick responses. Digitally transforming your business can help you deliver an experience your customers crave.

Using digital tools, like customer relationship management (CRM) software, can also help you gain invaluable customer insight you can use for improved marketing. 

3. Make data-driven decisions

Gathering metrics can be tedious and time-consuming. Many digital tools provide real-time data and analytics so you can make informed decisions based on accurate metrics.

For example, social media management software shows you how many engagements and impressions your business receives per platform (e.g., Facebook). It might also show you the best day and time to post to optimize engagement. 

Accounting software uses your books to automatically generate robust accounting reports, like your profit and loss statement and balance sheet. You can review this data before making major business decisions, like purchasing new equipment. 

4. Reduce costs 

Time is money. Do you want to spend your time (and your employees’ time) on tasks that a digital tool could accomplish in minutes? 

You can use digital tools to save time for higher-level work, increasing efficiency and reducing your costs. 

Digital transformation challenges

A small business’s digital transformation is beneficial, but it can also pose several challenges. 

There is an initial time investment to update your business processes from a traditional model to a digital one. Switching over your information can be time-consuming, and you might hit snags when getting set up, such as misplacing information

There is also a learning curve that comes with many digital tools. You and your employees may need to take time to get up to speed with new processes.

How can I digitally transform my business? 

Digitally transforming your business can be daunting, especially if you and your team are already crunched for time. 

1. Define your goals

What is your business’s overall strategy and priorities? Revisit your mission statement and core values. For example: 

  • Is priority #1 to provide the best customer experience?
  • Do you aim to be the lowest-priced business in the market? 

Once you’ve revisited your company’s mission, you can create digital transformation goals that align with business priorities. For example:

  • Do you want a tool that will help you improve the customer experience? 
  • Do you want a tool that will help you cut costs for your customers? 

2. Set aside time for discovery 

Discovery is the process of analyzing your current processes and shopping around for better alternatives. 

You can get started by:

  • Analyzing all your current automated and manual processes 
  • Creating a budget for your digital transformation
  • Researching potential tools (start with a quick Google search!)
  • Signing up for personal demos with a team member 
  • Signing up for free trials of different products

3. Invest in new technology

After you take the time to thoroughly review potential tools, it’s time to make the leap and implement new processes. 

Invest in digital tools and technologies you and your team have fully vetted. Remember to train all applicable team members on the new tools.

4. Recognize that it’s an ongoing process

Digitally transforming your business isn’t a one-and-done process. Continually analyze the tools and processes in your business to determine if there are better technologies out there. 

You may also need to provide ongoing training for employees using digital tools, especially as tools release updates. 

This is not intended as legal advice; for more information, please click here.

Get the latest small business news delivered straight to your inbox!

Most popular blog categories