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Key takeaways:
Small businesses that enhanced their digital capabilities in the last three years are significantly more optimistic about the future of their business than those that did not enhance (63% vs 48%).1
Perhaps you’re looking to grow your business, become more efficient, or you have a website or a small following on social media, and you’re wondering how to reach more customers. Or maybe you’re just starting your business and want to find ways to stand out from your competitors.
Regardless of where you are on your business journey, embracing digital technologies can help improve your business's efficiency, expand revenue and improve customer service.
Here are some key things to know about digitalization: what it is, its benefits and how you can start a digital transformation.
Digitalization is the process of using digital tools and technologies to update your business model and provide new types of value.
A whole host of ways to digitalize your business are available to expand your business successfully, like utilizing accounting software, improving the usability of your website and automating marketing tasks.
Digitization vs. digitalization
While they may sound similar and are both paths to business digital transformation, digitalization is not the same as digitization.
Digitization involves converting physical data or documents into digital files, like scanning a photograph to your computer or converting a video tape into digital video. It helps with data storage, accessibility, and sharing and is the first step in digital transformation. Digitalization, much broader in scope, is an ongoing process that integrates digital technologies into all areas of your business.
Netflix is a popular example of a company that harnessed innovative technologies to transform an industry. It began by distributing physical DVDs, then a decade later, adjusted its model to include digital distribution by offering streaming services. Netflix completely digitalized the rental space by using customer-driven data to create personalized recommendations that enhanced the subscriber's individual experience. Other companies, like Blockbuster, went bankrupt due to their inability to keep up with change.
While we may not all aspire to turn our businesses into Netflix, it is helpful to understand how this familiar model utilized digital technologies to vastly enhance growth.
Research shows that businesses that embrace digitalization have higher customer growth than those that don’t, increased revenue and improved efficiency.2
QUICK FACTS
Many small businesses that have enhanced their digital capabilities in the past three years have been able to:3
- Provide better service
- Reach more customers
- Achieve higher revenues
- Reduce overall costs
- Keep up with higher demand
- Innovate faster
Let’s examine how:
- Enhance customer experience: Today’s tech-savvy customers expect a strong online presence. Your website is a representation of your business and often a customer’s first impression. Make it user-friendly, easy to locate, attractive, and keep it up-to-date.
- Become more efficient: Automating tasks like bookkeeping and social media or adding a chatbot to simplify customer service can all reduce time spent on manual responsibilities. This frees up creative time for you and your employees to take on bigger, more exciting projects and can improve work/life balance.
Scotiabank has partnered with some market-leading cloud-solution providers such as Intuit Quickbooks, Xero and ADP to help you digitalize your business. Visit our Partnership Hub page.
- Scale your business: Digitalization can help you to expand and scale your business. For example, moving from a retail location to an e-commerce store allows you to sell your products or services to people worldwide.
- Improve company collaboration: Enhance your team’s communication with digital collaboration tools like Slack and Zoom or implement online tools like Miro to simplify brainstorming activities. These tools make it easier for team members to chat, collaborate and innovate.
- Expand your hiring options: Digitalization allows people to work from anywhere. This can help expand the talent pool you can choose from.
- Save on office space: If you have shelves full of client files, digitizing your paper documents can help free up space. If you're paying to store your documents, it can also put money back in your business account.
- Increase safety: Implementing cyber security measures can help protect your website, payments and customer data.
- Help with sale or transition of your business: If you plan to sell your business in the future, it will be attractive to potential buyers if your business has adopted digitalization.
According to a recent Scotiabank report, 45% of businesses say that is it critical to modernize their business through digital transformation to help with the sale of their business.4
Overall, 71% of small businesses have enhanced their digital capabilities in the past three years with the most common ways being:5
- Upgrading software (36%)
- Upgrading hardware (35%)
- Upgrading digital security (25%)
The right digital technologies for your business will vary based on your goals. But here are some tools and tech to consider:
Customer relationship management (CRM). CRM software tracks your customer interactions, such as through marketing emails and calls. If you’re working with multiple apps and programs, a CRM can store and organize your customer data in one place.
E-commerce. E-commerce allows your customers to purchase your product or service over the internet, and platforms like Shopify and Squarespace make it easy to set up an online shop. These platforms can facilitate everything from payment processing to security.
Explore accepting payments from your customers in-store, online or on-the-go with exceptional payment processing from Scotiabank's preferred payment processor, Chase Merchant Services.
Inventory management tools. This software can help you keep track of products across multiple sales channels. You can set alerts if inventory is getting too low, analyze data and run reports.
Payroll software. Say goodbye to spreadsheets and hello to simple software solutions. These technologies can reduce the manual workload of tasks like payroll processing and decrease the chance of errors.
Scotiabank has also partnered with ADP and Xero powered by Flinks to help you automate your payroll processing needs. Get online payroll services with top-rated payroll software and expert support when you need it.
Marketing automation. Attracting and engaging customers requires a solid digital marketing strategy. You can use marketing software to automate social media posts and also track customer engagement so you know which methods are working.
Security software. Installing anti-virus software on company computers and mobile devices can help protect your data. If you have employees working from home, you can also use a secure Virtual Private Network (VPM). For more tips on how to get cyber safe, see the Government of Canada’s guide.
While digitalizing your business may seem intimidating at first, you can take it one step at a time.
Start by looking at your business to find where there are simple opportunities to optimize. A great first step is building a strong online presence with a website and/or social media accounts. If you need to increase sales, consider implementing an e-commerce platform. If you’re sitting on a mountain of paper, several programs are available to digitize your files and records.
Investing in technology and digitalizing your business takes time, but by embracing a digital culture, you can keep up with the times and take your business to the next level.
