Are you one of those people who thinks adopting the latest tech fad will lead to the complete digital transformation of your organization? Unfortunately, that’s not digital transformation—and that’s a mistake many small businesses make.

Many small businesses lack a clear understanding of the differences between digitization, digitalization, and digital transformation and they make only a few projects or functions “digital” without a clear vision of how the organization should be digitized as a whole.

One study reveals that 91 percent of executives agree on what digital transformation is, in theory. However, 35 percent say the lack of a clear transformation strategy is a key challenge in achieving their business’s full digital potential.

In practice, digital business transformation occurs when businesses leverage available data and connectivity opportunities to influence the ways they are competitive in the marketplace. In digital transformation, there is a shift from placing value in an organization’s assets and operational processes to placing value in the information those items generate.

A quick look at the differences between digitization, digitalization, and digital transformation

Digitization

DEFINITION: According to Gartner, digitization is “the process of changing from analog to digital form, also known as digital enablement.”

EXAMPLE: A user scans an image, which is converted into a digital format such as bitmap, which can be accessed electronically across systems.

Digitalization

DEFINITION: According to Gartner, “digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.”

EXAMPLE: A new employee at a telecom company needs a mobile phone, SIM, and wireless subscription for work. In the past, the employee would have to request the items from HR, which would then ask the fleet manager to fulfill the request.

With digitalization, as soon as the person is hired, HR is automatically prompted to order the necessary items so that from the first day, an employee has everything they need.

Digital transformation strategy

DEFINITION: Gartner defines digital transformation as “the process of exploiting the latest digital technologies and practices to create a new sustainable digital business model.”

EXAMPLE: A company collects personal information about many customers and realizes it can use that information to create an identity verification product that other businesses (e.g., insurance businesses) can use to verify customers’ information.

Businesses that focus only on digitizing individual projects and not implementing a full-fledged digital transformation strategy will stall their revenue growth, decision-making, process improvements, and employee productivity levels.

Small businesses must understand the distinction between these three terms, but more important, they should not be overwhelmed at the idea of digital transformation. Even with limited resources and technologies, it’s possible to accomplish digital transformation that improves your culture, employee morale, and customer satisfaction.

This article looks at the three strategic practices that small businesses should follow to gain long-term business benefits. We also discuss how to use collaboration software to drive this transformation.

Practice 1: Develop and sustain a healthy digital culture

Case in point: Management guru Peter Drucker once said, “Culture eats strategy for lunch.”

Your company culture and business strategy are dependent on each another. That’s why you should focus on how the overall company culture supports your digital strategy.

Many factors affect the company culture, but internal communications is one of the biggest. As companies digitize internal communications, it’s important to establish digital ethics that regulate this communication within teams and departments.

Gartner suggests the following universally applicable guidelines to address the ethical dilemmas that businesses face:

The guidelines Gartner suggests using to address ethical dilemmas at work

Here are a few suggestions for helping your employees understand digital ethics:

  • Monitor and screen the standard of communication in your organization.
  • Define clear do’s and don’ts for internal and external communication.
  • Incentivize employees for sticking to the established cultural ethos with frequent rewards or recognition.

How collaboration software can help

Here’s how you can leverage collaboration software capabilities to promote a healthy digital culture:

gamification iconGamification

Collaboration and social intranet platforms offer preconfigured gamification components that can encourage and reward employees who do something admirable. These apps offer features such as points to recognize good behavior. They also offer badges for completing missions, which appear on profiles indicating their progress or level.

You can also set up leaderboards to track employee progress, motivating them to adhere to ideal behaviors with rewards and recognition. This could also result in employees becoming internal advocates of change and inspiring their peers to perform better.

Additional benefits of establishing and maintaining digital ethics

  • Improved vendor and customer relations: Establishing a strict code of conduct across the organization promotes integrity and trust. It can also help you maintain healthy interactions between your employees and with customers.
  • Improved interpersonal relationships: Following ethical standards in all communication increases respect among employees. High ethical standards can positively influence employee relationships.


Practice 2: Focus on improving customer relationships

Case in point: By the year 2020, customer experience will overtake price and product as the key brand differentiator.

Customers are the backbone of any organization. How you engage them heavily affects business growth. That’s why, when aiming for a complete digital transformation, you should focus on customer engagement and empowerment.

Here’s how your business can achieve these:

  • Improved communication with customers across all channels through cross-departmental alignment.
  • Access to knowledge and databases that help employees provide better customer experiences.
  • Use of customer interaction analytics to form clear-cut action plans for all communication touchpoints.

How collaboration software can help

Here’s a list of collaboration software capabilities that can help you improve customer relationships:

Cross-departmental project management iconCross-departmental project management

Collaboration software divides projects into tasks, which can be assigned to team members across departments. Cross-departmental participation gives businesses the ability to continually enhance product quality, which ensures repeat customers.

Different teams such as customer service, marketing, and product can come together to collaborate and share knowledge. Dedicated collaboration tools helps will help them create campaigns with a unified brand voice across all customer touch points. This creates a positive customer experience overall, resulting in long-term customer retention.

Document management and storage iconDocument management and storage

Collaboration software allows users to document, edit, share, and store information. The software indexes and archives documents, making it easy for customer service reps to search or refer to them while serving customers to offer the best support and answers.

This software allows SMBs to store all types of data (such as customer information, interaction notes, product notes, and sales analytics) in one place for easy access. Employees can easily search the archived and indexed documents using keywords.

Software integrations iconSoftware integrations

Various vendors offer software integrations through Zapier or an API. Users can create an IT suite with interconnected tools for CRM, marketing, storage, collaboration, and other software.

Integrated work management can streamline workflows so that it enhances productivity. It also makes it easy to manage issue tracking, query resolution, and other tasks. The expanded software capabilities help SMBs get better ROI and scale up their business.

Additional benefits of improving customer relationships

  • Improved revenue growth: Having engaged customers results in repeat business, which boosts revenue growth.
  • Positive brand image: Providing positive customer experiences leads to word-of-mouth promotion that ultimately boosts your brand image.
  • Better customer retention and acquisition: Making customers happy ensures that they stay loyal to you. They’ll be your brand’s advocates and help you acquire new customers.


Practice 3: Improve employee engagement and motivation with collaborative work management

Case in point: Did you know that only16 percent of employees say they feel “connected and engaged” by their employers? The lack of employee engagement in the U.S. workforce is a huge problem that results in a total loss of $450 to $550 billion annually for businesses.

Engaged and motivated employees are more productive and responsive.

The Gartner report “Creating Digital Workplace Execution Strategy” (full report available to clients) notes:

“Engaged employees routinely make discretionary effort and embrace new roles and responsibilities. They therefore contribute more to improved overall business outcomes, as measured by operating margin and other profitability metrics. Engagement is an important factor in ensuring the workforce embraces technical change, new ways of working and new digital duties.”

Therefore, as businesses go digital with their projects, they should consciously create a collaborative work culture that focuses on employee engagement and motivation.

Here are some ways in which they can ensure this:

  • Better communication among team members and management that keeps them updated on common projects and shared commitments.
  • Regular recognition of employees to make them feel noticed for their work, in addition to periodic appraisal cycles.
  • Launch of leadership initiatives that inform employees about organizational goals to inspire their shared commitment.
  • Smoother employee onboarding to keep them engaged right from the start.

How collaboration software can help

Here’s a list of collaboration software capabilities that help increase engagement and motivation:

communication management iconCommunication management

Some collaboration software offers chat channels to drive topic-specific communication in real time. Others offer audio-video calling/conferencing and social intranet networking for better communication and ideation. This addresses a major cause of disengagement: the lack of remote working flexibility.

The announcement feature in social intranet platforms helps employers share news about organizational changes, updates, and achievements. When employees are informed about the leadership’s vision and the organization’s growth path, they’re more invested, and therefore, engaged at work.

Recognition, rewards, and feedback management iconRecognition, rewards, and feedback management

Collaboration tools may offer in-built survey functionality to gather and save feedback from respondents in one place. You can gather insights, internal team feedback, and votes on creative assets, ideas, products, and projects.

Users can also send these surveys to vendors, partners, and customers for their opinion on products, services, and proposed improvements.

Collaborations tools can also help bridge the communication gap and improve your team’s creative output. Employees will feel heard and valued for their opinions, while you’ll be able to create opportunities to recognize individual contribution. Some collaboration software offers badges and likes that supervisors and co-workers can use to recognize employees.

Additional benefits of employee engagement and motivation

  • Better recruitment: Continuing to ensure that your employees represent and embody your company culture can improve your hiring pool. Their positive reviews help build your company’s positive market image, which attracts better candidates to your company.
  • Positive and profitable employee behavior: Ensuring that employees have a platform to provide feedback and that their opinions matters will help you increase engagement levels. You’re also promoting positive employee behavior, which has a huge impact on a company’s overall profitability.

What next?

Changing your whole business model isn’t easy. However, there are ways to ensure that your employees are on board with your plans for complete digital transformation. Here’s how you can achieve successful digital transformation:

Infographic describing how to achieve successful digital transformation

Read more about partial gamification and digital dexterity to understand how employees can be more engaged and efficient.

You can also compare the different collaboration software options here.