A study conducted by Cisco illustrates the importance of small businesses adopting digitalization. The study covered 2,000 small businesses from eight global markets such as the United States, Canada, Germany, Mexico, the United Kingdom, Brazil, Chile, and France. It further revealed that by increasing digitalization efforts, these global markets could experience a 42% faster growth rate and increase their economies by 5.5%.
Research has also discovered that small businesses which readily adopt new technologies will on average, gain 120% more in revenue and 106% higher productivity than those that don’t. Yet among Aussie small businesses, almost one in three still delay making any decision on new technology. There is a significant adoption gap, a hesitation to consider digitalization, and one that could potentially cost the Australian economy.
Covid-19 and its impact
COVID was the shock that small businesses needed to understand the importance of digitalization. Lockdowns pushed businesses and their customers to shift to e-commerce. E-commerce’s share of global retail trade increased from 14% in 2019 to 17% in 2020. And it wasn’t just the retail industry forced to move online. Businesses had to adjust and learn to perform in a new reality.
Quick facts about digital commerce:
Before COVID-19, one in three small businesses had never made a digital sale.
Today seven out of eight businesses are selling goods and services online.
Small businesses make up 98% of Australian businesses. If they don’t adopt digitalization, they will lag and effectively impact the economy. Small businesses that embraced digital transformation saw eight times higher growth than those that didn’t.
What is digitalization?
Digital transformation or digitalization is a term you may have heard thrown around a lot. What is it exactly? Digitalization is not just about technology or complicated systems but using technology to improve the way you do business.
You can adopt digital technology to change how you do business or manage your employees. It is a cultural shift and an attitude shift for small business owners. Digital transformation needs you to take a step back and ask what needs to be changed. It demands you to be brutally honest in your feedback and requires you to push the envelope.
You adapt old business models to new technologies to collect data, identify patterns, and analyse the patterns to make business decisions.
Digitisation vs Digitalisation
Digitisation, digitalisation, and digital transformation are used interchangeably. Understanding the differences between digitization and digitalization is vital when building your strategy.
Digitisation is the process of transforming information from a physical format to a digital version. Digitalisation is the practice of utilizing technology to enhance corporate processes.
The benefits of digitalisation
A whopping US$2.3 trillion could be added to the global GDP by 2024 if small businesses advance their digital transformation journeys. Going digital allows your business to become efficient and get better results.
Reduction in costs
By adopting digital technologies and processes, you will streamline all your administrative processes and save costs. This will decrease your time and costs spent on basic tasks, leaving you free to focus on growing your business. Manual tasks and processes are slower than digital tasks since they are conducted one at a time. Inefficient processes can cost organisations up to 30% of their annual revenue. Digitalization enables you to automate processes and save time and money.
Higher productivity
When small businesses integrate digital technology for processes, they free up their staff from wasting time on manual and repetitive tasks. Tasks can be done faster and, in less time, than anticipated.
Consistency
Digitalisation benefits small businesses by ensuring consistency across all channels and tasks. Once you digitally automate tasks like customer service or sales follow-up calls/emails, you are guaranteed consistency in quality and support. With digital tools, you can also design better customer service or sales.
Transparency
Transparency in a business is important for its success. If you automate a process (finance, metrics, payroll, etc) it can offer you crucial insights.
Transparency allows your employees to see results and metrics on their work. It provides them with a guarantee that they can see verifiable data and find out any mistakes or errors if needed.
Adaptability
The market is constantly changing. It has also gone through several disruptions after the pandemic. Small businesses must stay up with the fast-paced market and changes. They should be able to respond to any disruption and adapt quickly. Automated processes and systems provide businesses with the necessary tools to adapt to any changes and disturbances in the market.
Scale Your Business in 2023
Employsure has worked with 30,000 business owners across Australia and New Zealand. We know how difficult it can be to manage employees and keep up with constantly changing regulations.
Call our 24/7 Advice Line today to get all your questions answered.