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Would you say digital transformation is not as important for smaller companies?
Max Young
Blog Writer
Accepted Answer Pending Moderation
Digital transformation is as important as oxygen: all digital creatures, great and small, need it. But Fat, bloated organizations sometimes labor to breath. It comes more naturally to the small & the quick.
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Comment
  1. more than a month ago
  2. BPM Discussions
  3. # 1
Accepted Answer Pending Moderation
It's not important for smaller companies...if they want to remain small and smaller.
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  1. more than a month ago
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  3. # 2
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As the owner of what's now the smallest possible company, I can attest that you have to be "digital" first. Everything that can be automated must be automated, because otherwise it will overwhelm you.
Founder at John Reynolds' Venture LLC - Creator of ¿?Trules™ for drama free decisions
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  1. more than a month ago
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  3. # 3
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Just looked up how long ago Thomas' Friedman's epoch-defining "The World is Flat" was published: Wow 2005 apparently!

Thirteen years later I'm still not too concerned about finding a digital-first barber or cleaner, but for everything else you better be digital, especially if you don't have incumbent (aka large business) advantage.
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  1. more than a month ago
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  3. # 4
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Let's define three types of "small company":

1. Niche company (i.e. defensibly small, not likely to scale and stable). Niche could be enabled by geography or market space.
2. Small company with potential to grow.
3. Small company that will be erased by market forces.

The question concerning the importance of digital transformation is a question really only for No. 1 (In any modern market, No. 2 naturally requires digitalization to scale.)

It comes down to economics and business models. Any given market function will have greater or lesser susceptibility to and possibility of automation. Even law is becoming automated. Local craft bakeries maybe not so much. Custom precision manufacturing, in the middle.

>> If you don't automate and you could, you will be less efficient, and likely therefore enjoy lower profits.
>> If you don't automate and you could, you will be unpleasantly surprised when your previously secure market niche turns out to be not so secure, as your customers start looking for alternative digitalized suppliers and/or substitute goods and services.

As Mr. Reynolds points out above, "everything that can be automated, must be automated". We can now redefine the first of our types of small companies. There are likely no "niche companies" that can expect "business as usual". There are only "evolving niche companies" that are adding digitalization to their successful niche defense.

"A rising tide lifts all boats", as they say. But if the tide is a tide of automation, you need to be willing to be lifted. You can't be anchored under water and survive.
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  1. more than a month ago
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  3. # 5
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I think Digital Transformation is as important for SMB's as it is for big companies.

The fact is that it is much easier for a small company to become digital.
Their business processes are simpler, there are less people to evangelize and there are SaaS tools for mostly every need.
The restriction? Managerial time, and money, of course.

On the other hand, big companies face a longer path to become digital. For just the opposite factors.
The restriction? Market timing. If strong competitors goes digital faster and better, loosing market share could lead to big problems. Bankruptcy is in the horizon if the response doesn't come on time and it is effective.

Regards !
CEO at Flokzu Cloud BPM Suite
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  1. more than a month ago
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  3. # 6
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Digital transformation isn't important for any company.

Making some margin is. And for that you need some paying customers. And for that you need a product or service that solves their problem. And for that you need some process to produce that. And then, finally you might need some digitilization to improve your margin or make life easier for your customers and your self.

Customers don't buy digital. Thye buy your products and services.
Sharing my adventures in Process World via Procesje.nl
Comment
  1. John Morris
  2. 4 months ago
  3. #5552
Nice! I note though that the same thing can be said for any input - e.g. electricity or accounting or steel or labour etc.
Emiel, it is of utmost importance "how" a company delivers that product/service.
And it is this "how" that should be addressed in the answer to Peter's question.
And of course, the "how" may not directly influence the margin, but it is a massive cost driver of any overhead component. Worth discussing.
  1. Emiel Kelly
  2. 4 months ago
  3. #5554
Absolutely right John and Bogdan. I know I'm an old fashioned process crazy guy that wants to solve problems instead of implement solutions that are not solutions.

That's why I still believe process is the context to put 'solutions' in. To me digital transformation (better: transforming to digital) is still a means, not a goal.
  1. more than a month ago
  2. BPM Discussions
  3. # 7
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As a continuation to my statement from the previous question, small companies compete by being agile. And this is directly related to the "how" - if they sell relatively commoditized products/services, their only differentiator are the sales channels / ways to reach customers. If they sell customized products/services, their only differentiator is their production platform. For small companies, both sales channels and production platforms are being digitized in a highly accelerated manner because you need fast and cheap before you can scale.

But that's not to say big companies do not need digital transformation. But they do not need it as a drive to stay competitive. Big companies compete in the marketplace by throwing their weight around. And their digitalization challenges mostly stem from clashes with entities their size but outside their marketplace - communities, governments, regulatory bodies etc.
CEO, Co-founder, Profluo
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Excellent observation. Nobody cares of transformation itself, unless its results are evident and, desirably, positive.
  1. more than a month ago
  2. BPM Discussions
  3. # 8
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I still caution to differentiate between transformation and improvements/modernization. In that sense, I strongly believe that not all companies have the need to transform. All DO require to be at level with a given tech-baseline, for sure, but only a few will find themselves in the position of having to have to transform (either because they haven’t caught up to said base standards for too long or - for even fewer companies - they want to put a groundbreaking new business model into place).
New technologies are indeed of value to SMB’s, avoiding to have to spend valueable time on routine tasks.
While not all what’s new and shiny will add value to a small company (ACM, BR, AI or advanced BI may be an overkill), DMS, CMS and BPM certainly will and are, in my opinion, a must have for any company- especially small ones, allowing them to invest time and efforts on sharpening their competitive edges.
NSI Soluciones - ABPMP PTY
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Very valid point. Transformation and ,especially, disruption are quite frightening approaches from a business viewpoint. Steady evolution is much less risky and desirable whenever possible.
  1. more than a month ago
  2. BPM Discussions
  3. # 9
Accepted Answer Pending Moderation
Digital deliver with all the advantages often discussed in this forum is just as relevant for small business as the larger ones. Indeed those SMEs with ambition really should be planning to scale their systems and digital could should be priority. The cost in now very low and with adaptive capability any investment becomes future proof.
I am now preparing to take on global start up which will from day one start build of digitally lead operational systems. We will take on board basic local accounting systems which will both be fed and feed these scalable digital systems which will based upon a shared service allowing one central view with local control and customization.
Comment
  1. John Morris
  2. 4 months ago
  3. #5556
David, sounds like you are initiating an amazing programme ...
  1. more than a month ago
  2. BPM Discussions
  3. # 10
Accepted Answer Pending Moderation
Major companies are not easy to transform digitally due to inertia of a large structure and deeply rooted traditions. Diverse IT landscape and distributed faculties make it especially difficult and expensive to migrate established business routine.

On the contrary, smaller companies can quickly transform their operations into digital field due to limited footprint and simpler workflows. For the same reason, an effect of innovation appears much quicker, is easier to measure and correct depending on obtained results.

Smaller companies simply cannot afford being inefficient, unlike their bigger counterparts, which have at least a temporal security belt of size and established market share. Quick technical and operational optimization offered by digital tools is the primary factor of growth for an emerging business.

Digital transformation offers to smaller companies unique competitive advantages by effectively replacing costly manual operations by affordable and adaptive automation of business processes. Digital operations in smaller companies are also much easier to control due to limited scale and complexity.

All these factors explain explosive growth of digital automation in smaller organizations far superseding respective evolution of large corporations and creating key competitive advantage of modern small business.
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  1. more than a month ago
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