Going Digital: What Does it Mean and How Can it Help Your Business Grow?
Digital is rapidly changing our everyday lives, our jobs, how we run our businesses and manage our money. However, many SMEs are confused about what digital actually means and how becoming more digitally confident can help their businesses.
Not gone digital yet? You’re not alone!
On the financial front, failure to solve the ‘digital skills gap’ could cost the UK economy up to £50bn per year in lost growth, a new report from AND Digital has warned. Skill shortages hinder the productivity gains expected through the use of digital technologies in up to half of all firms (e.g. in manufacturing), and in others where employees need to be re-trained due to the automation of manual jobs. Sixty-one per cent of respondents to AND Digital’s survey said that their growth expectations would be at risk if their digital ambitions did not materialise.
The digital skills gap refers to the lack of digital skills in the existing workforce, which falls short when compared to what it is estimated will be needed in coming years. AND Digital’s report estimates that a UK workforce of eight million individuals proficient in digital skills is needed to help close the gap.
Up to 38% of the UK’s small businesses lack even the most basic of digital skills, according to findings from the third annual Lloyds Bank UK Business Digital Index. The survey of 2,000 small businesses found that business owners with high digital skills were twice as likely to report an increase in turnover as those with the least, while 69% of respondents admitted a need to develop their digital skills.
Accelerating the take up of digital technologies by small businesses will boost national growth, increase productivity through a better skilled workforce, and help meet the needs of a fast-changing digital economy. Modelling by Lloyds Bank showed that if all small businesses unlocked their digital potential it would create more than £85bn in additional revenue for the UK economy.
So, there are many individuals, businesses and communities that aren’t sharing in the benefits of digital yet. Despite evidence that better digital capability drives sustainability, profitability and growth, it’s been found that a quarter (25%) of small firms do not consider digital skills to be important to the growth of their business.
But for those like you who DO want to take your business to the next stage, big benefits can be achieved through improving your skills and then adopting digital technologies.
What’s holding you back?
- Lack of time: Business owners said that they did not have time to look at all the different options and were frustrated by the lack of clear, accessible and trusted advice.
- Lack of digital skills and confidence.
- Costs of hardware, software, ongoing maintenance and staff training. Some prefer to outsource digital services rather than ‘lose time’ learning skills in house. (Though we would ask – how can you brief someone and manage their performance if you have no idea what you’re talking about?)
- Outlay if you are operating in sectors with very low margins you need to be sure that your investment will provide identifiable returns.
- Fears about significant disruption in adopting technology and changing processes, and/or about protecting their business from fraud or scams.
- Not knowing what technology to use or buy – there is a gap in people’s motivation to do more digitally, starting with not knowing what they should be doing.
- Not finding suitable support. Some found it hard to know what training they needed, or to find support that was flexible enough to fit around their business.
So – what does ‘going digital’ actually mean?
Digitisation is driving change so quickly that businesses that don’t embrace digital risk losing out to competitors who do, being left behind and maybe even going out of business. Going digital is simply about building the digital skills, motivation and confidence to apply technology to achieve your business goals.
Over two years after the first lockdowns were introduced, companies worldwide are still struggling to establish a new normal. Tech can play a crucial role in rebalancing, reconstructing, and reinvigorating small and midsize businesses.
Here are some business tech trends for 2023 and beyond:
1. Social media & influencer advertising
Small businesses are continuing to adopt social media advertising in 2023. While influencers are often considered social media advertisers, social media advertising also encompasses areas like pay-per-click marketing. The ability to create unique and differentiating content that engages customers through social media channels is paramount in today’s growing digital landscape.
Social media influencers and personalised marketing are becoming viable avenues for connecting with customers and showcasing products. Businesses must have dynamic, strategic marketing plans, which for B2C business in particular, means working with influencers.
Social media marketing can help you connect with your customers and develop a niche within your industry. Working with genuine influencers means understanding your business’s needs and doing your research on who’s influential within the industry. Influencers may quickly fall from favour, since audiences can be fickle. Look for individuals who don’t court controversy – ideally ones with an established track record of working with other SMEs.
2. Increased focus on cybersecurity
The shift to new working practices has spawned new forms of fraud, with malware evolving in response to greater virtual communication and the rising domestic use of workplace hardware.
The CyberEdge 2022 Cyberthreat Defense Report (CDR) provides a breadth of insight into cyber security in countries all over the world. It found that in the UK, 81.4 percent of organisations had experienced at least one cyber attack in the year prior to the study, compared to 71.1 percent in the previous annual findings.
Well over half (73 percent) of UK organizations dealt with a ransomware attack, a 15 percent rise on the previous year. While only a small portion of companies paid the ransom, ransomware attacks can still be very expensive to fix. Indeed, Sophos found that the average cost for UK organizations was $1.08 million. However, this is still a substantial decrease from the $1.96 million reported in 2021.
The average security spend as a percentage of a company’s IT budget ranged from 10.7 percent in France to 15.6 percent in Brazil. UK firms had the fifth-lowest spend at just over 11 percent of their respective IT budgets.
3. Artificial intelligence
Artificial intelligence and machine learning have been hot tech topics for years. For example, AI is transforming many aspects of business – from healthcare, sensor technology, stock control, to production monitoring and global distribution.
According to government research, in the UK, the IT and telecommunications (29.5%) and legal (29.2%) sectors currently have the highest rate of adoption, with high uptake in Finance and accounting, Media, advertising and sales and in Engineering. AI solutions for data management and analysis are most prevalent, with 9% of UK firms having adopted them, followed by natural language processing and generation (8%), machine learning (7%), AI hardware (5%), computer vision and image processing and generation (5%).
As more solutions integrate smart technologies, small business owners will continue incorporating them into new and existing processes in 2022. This could mean a wide range of implementation scenarios, from voice assistants to personalised customer experiences. In fact, artificial intelligence business trends already include more AI in cybersecurity, CRM systems and market research.
4. Employee monitoring software
After two years of enforced home working, remote work is here to stay, with hybrid working an increasingly popular option. As such, centralised HR information systems have become critical for businesses. Foremost among these tools is employee monitoring software, which can be used to gain granular oversight of remote workers and their productivity. Employees may perceive monitoring software as beneficial if hard work is recognized and achievements are praised.
5. Remote onboarding
As more businesses embrace the hybrid working model (and the potential savings stemming from shedding office space and freeing up employee commuting time for additional work), they will rely on technology to handle a successful onboarding process for remote employees.
Onboarding effectively is integral to hiring new employees as you get them up to speed with their responsibilities and the company culture. Without the ability to connect in person, either because of the pandemic or their location, companies are turning to software to help ensure employees are integrated quickly and effectively in the workplace.
6. 5G rollout
The adoption of 5G technology began in 2019, but the pandemic significantly delayed its rollout domestically and internationally. Still, the benefits of adopting the fifth generation of cellular capability include significantly faster data transmission speeds than 4G networks can provide.
Effectively eliminating latency will be a significant step forward in developing the Internet of Things (IoT), as 5G networks are more capable of supporting the influx of interconnected smart devices than 4G or Wi-Fi.
7. Tech-assisted shopping
Retailers have seen some of the most dramatic fallout from the pandemic. In response to lockdowns and related disruptions, major businesses have been accelerating their rollout of mobile and social media shopping to create a contactless shopping experience. Mobile payments have grown to include QR codes, mobile terminals and mobile wallets.
The benefits to your SME in adopting digital technology
Mastering digital skills also can enable a company to diversity its offering, appeal to new customers and open up new revenue streams and opportunities. Building your digital capability and realising the benefits that adopting digital technology offers will lead to the following benefits to your business:
- Increased profitability: through increased productivity, saving time and reducing cost.
- Increased market share: through the ability to reach new customers and new markets more easily, accurately measure ROI on marketing activities, and retaining more customers
- Customer transaction benefits: by doing more online, small businesses can offer a greater variety of products and services, provide faster service, save on shelf space and operational costs, and compete on price.
- Efficiency savings: through reductions in staff time spend on processing transactions, fulfilment and distribution, product build tracking, stock control and management.
- Innovating and new ways of working: by adopting new technology that enhances the offer to customers and solves more of their needs, you can develop new products and services and improve your competitive advantage. It also enables to monitor process productivity and that of your staff members.
- Enabling staff to reap the benefits of home working/hybrid model, giving them a better quality of work experience through reducing travel to work and time away from family, greater flexibility, and also reducing carbon emissions
Growth Works can help drive growth through adoption of relevant technology
Effective sales and marketing lies at the heart of successful business growth. Marketing is all about building awareness, generating leads and strong sales pipelines, differentiating over the competition, and acquiring and retaining new profitable long-term customers.
It is not possible to grow your business without acquiring new customers, but acquiring leads and nurturing them into long-term clients requires many moving parts. Investing in technological innovations that allow you to streamline this process is, to put it mildly, essential.
Your business requires methods to –
- Automate email workflows
- Maintain a record of how leads respond to emails
- Provide leads with valuable content that addresses their challenges and pain points
- Develop relationships with prospects to assist them in becoming customers
This technology gives your leads and customers a better experience while also providing valuable information about potential customers to your marketing and sales teams.
Growth Works are providing 2 masterclasses in the first quarter of 2023 to help you develop your marketing strategy and digital marketing and social media skills. Relevant technology that will help you with your marketing will also be discussed. See our events pages for more information.
We can also connect you with IT experts who can assist you with any other digital needs your business may have, from website development to production management to cyber security to Artificial Intelligence. You could also gain a Growth Works grant that would pay half of the cost of your digital transformation project. Check out our grants pages for more information.