For the second year in a row, technology is the number-one investment priority for CEOs of small and midsize businesses (SMBs).
By Joe Galvin
In a recent survey of 1,267 CEOs, our team at Vistage Research found 61% of these leaders plan to increase their technology spend in 2019 compared with last year, predominantly on business applications.
CEOs’ top four reasons for investing in technology:
- Streamline operations (63%)
- Improve employee productivity (54%)
- Get ahead of competitors (41%)
- Respond to customer demands (41%)
As these CEOs understand, technology can create a real competitive advantage. So why is it that many SMBs struggle to realize the full potential of their investments in technology?
It could be because 49% of them haven’t developed a digital-first technology strategy. For the 51% that have, it may be because they don’t know how to leverage that technology to meaningfully transform their businesses.
If you fit either one of those descriptions, here are some insights from our report on what you can do to change that.
Three steps to getting started with digital transformation
Step 1: Rethink analogue processes
Digital transformation is about more than buying technology. It’s about adopting a digital-first mindset—saying goodbye to analogue, human-optimized workflows and designing new ones around the capabilities built into systems and applications.
How could you reimagine interactions with your customers to create better brand experiences? Where could you automate repetitive processes or mundane tasks to improve accuracy or give employees more freedom to create, connect and collaborate? Tackle questions like these in small groups, with the people involved, and you may be surprised at the solutions that emerge.
Step 2: Revisit system integration
The process of selecting, integrating and implementing technology is challenging. Almost half of CEOs (47%) rely on external IT consultants or contractors to support the multitude of decisions they face.
All your systems and applications—from CRM to ERP to billing—need to be seamlessly integrated so they can provide a single view of your operations, people, customers and finances. Only then can digital transformation really take shape.
Step 3: Realize a change-management strategy
It’s natural for people to resist change, especially when it could threaten or expose how they work. Make it easier for your employees to adapt to new data or workflow systems by developing a change-management strategy based on these eight tenets:
- Seek alignment among senior executives. This helps coordinate communications about changes so employees can understand and embrace the new system.
- Set clear standards and expectations. Defining expectations from day one helps everyone feel informed and accountable.
- Outline milestones and metrics. Create a roadmap that clearly defines dates, utilization assessments and business metrics.
- Develop a buy-in strategy. This encourages key stakeholders and cultural leaders to become ambassadors for the broader organization.
- Establish a marketing-communications strategy. Every project phase should have its own overarching message of strategic value.
- Train your employees. Provide professional development for every employee to advance their competencies and skills. As best practices emerge, share them.
- Reach for quick wins. Establish a sense of momentum by making these visible and continually sharing progress towards the end goal.
- Recognize key employees. Doing this along the journey reinforces desired behaviors and helps unlock buy-in beyond management.
While these tried-and-tested steps will get you off to a great start, true transformation is never easy. But with a long-term perspective and the right mindset, you’ll stand the best chance of success.
5 truths about digital transformation
- Get used to this pace: Technological advancements will only get faster. Blockchain, artificial intelligence and 5G networks are already ushering in the next seismic wave of change. While you’ll always be under pressure to keep up, a clear strategy will help you to direct your investments well.
- Expect to spend: It’s not a good idea to short-change investments on business-critical infrastructure, applications and IT talent. Accept the fact that quality technology comes with a cost—the alternative is automating chaos.
- Transformation will be hard: IT projects will usually take longer, cost more and be harder to complete than you think. The shift to digital-first thinking and transforming ingrained processes will test you, your team and your employees in unexpected ways.
- IT carries risk: Using data to better manage your customers, employees, operations and financials does come with risks. Cybercriminals are working relentlessly to exploit vulnerabilities in your digital security. A digital business is all about your data, so protect it as vigilantly as your cash and investments.
- It’s still about people: Technology can do amazing things. But it’s only powerful when it equips leaders and managers to make better decisions, enables workers to be more productive, and facilitates deeper connections with your customers. These are the things that propel a digital-first company into the future.
Joe Galvin is the Chief Research Officer at Vistage.