Business strategies are not as simple as they used to be two decades ago. The evolution of the internet has drastically changed business norms. As long as they have internet access, a remote country becomes accessible and a potential market for your business. With the internet, the entire world could be your potential market. This globalized market has driven an inevitable need for businesses to have some form of digital presence to survive and have a slice of the market, irrespective of business size.
However, digital strategy has been misinterpreted as a barrier to job creation. Certain pockets of leaders within the business community still feel that the old ways of “hiring more is better” than spending on digital solutions when the need to expand business capacity arises. When decisions need to be made between subscribing to an automation solution versus hiring another cheap headcount, the decision will tend to lean toward the latter. This is not surprising, as the conventional wisdom that they are familiar with was not wrong. However, times have changed, and access to better business tools is easier than ever. So, while digital strategy is not about causing job losses, the transformation toward digital strategies could most likely mean evolving the role and responsibilities of an employee as innovation picks up and businesses can now achieve more with manageable headcount. Such developments are welcome in countries with a high proportion of highly educated workers, as job roles become more challenging, requiring decision-making skills rather than simply performing repetitive tasks. These are common challenges in countries where educational opportunities are becoming more accessible, as employees will not want to perform menial tasks for low pay given the significant investment they have made in their education. Hence, it is imperative to explore the important role of digitalization in business strategies and augment the perspective of SME business owners relating to digitalization as part of building sustainable business strategies.
This article aims to crystallize the concept of what digital strategy is all about, identifying common key challenges and roadblocks that prevent many SMEs from digitalizing as well as the path forward. It also intends to shed light on how digital strategies such as omni-channel operations for certain sectors will be fundamental to a sustainable business model, effectively supported by critical business enablers.
So, what is a “digital strategy”? To start off, digital strategy has many ways to be defined. A business strategy, simply put, refers to a business plan laying out action plans to be undertaken during a defined period of time on how the business is going to improve its business outcomes. As a result, a digital strategy is concerned with how a company can improve its performance through digital means, i.e., by implementing a digital solution or solutions. To achieve these, we will have to fundamentally focus on these three broad questions that will lead to improved business outcomes:
These questions seemed basic but tend to be forgotten as businesses run and decisions are clouded by many circumstantial situations, which tend to lead to inefficient decisions being made. The solutions to these questions come in three forms as well, and we shall look into them: the range of products or services being provided to the end customers; the means of communicating and engaging with the targeted market of customers; and how the business is being operationalized.
What It Is: Digital products are basically products or solutions that can be accessed or acquired through digital means.Businesses that seek ways to embrace digitalization have benefited significantly from selling their solutions to a global market. Imagine serving the needs of just 0.1% of a global market of more than 8 billion people. This is as good as attempting to serve the needs of an entire nation for some. We have seen how businesses have benefited from offering such digital strategies through the likes of Udemy, Netflix, and Xero Accounting, among many other examples of how conventional business services and products have evolved to be made available digitally.
For SMEs: While not all products can be transformed into a digital product or solution, SMEs should not see these challenges as prohibitive and should capitalize on this trend. Training providers, for example, could convert training materials into digital content to leverage global learning communities. Entrepreneurs with good product ideas that could benefit consumers or businesses should leverage on developing applications by pitching their ideas to venture capitalists hungry for the next great business ideas in which to invest.
Next: 02 of 04 – Digital Marketing Channels (check in next week!)
