Digital Transformation

Over the last few years, the leaders of companies of all sizes (small, medium, and large) have understood that digital technology can generate a competitive advantage, as well as create value for the company. The central problem is how to incorporate this digital technology into the business model. COVID-19 made companies incorporate some “digital activities”, however, most of them only adopted modest initiatives, offering other sales and/or service channels or modernizing the available infrastructure, without promoting a significant transformation in the business model. There was only a “digitalization” of some processes and nothing more.

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Digital transformation is much broader. It deals with how digital technology will be integrated into all areas/sectors of a company, changing, in essence, how it operates and how it delivers value to its customers. It is necessarily based on the tripod: People – Processes – Technology, promoting a change in the company’s culture. As this is a huge process/project, successful companies usually make this transformation in stages.

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The international consultancies that support companies in implementing this transformation have adopted some models, the so-called Digital Transformation Frameworks. All of them have at their core: the need for internal leaders with high technological competence and who can promote a change of culture, the creation of an ecosystem (digital platform) consisting of integrated solutions, applications and internal systems, and customer-centric product and service development. Among the most widespread models we have: IBM (Digital transformation – Creating new business models where digital meets physical), Gartner (Gartner identifies six key steps to build a successful digital business), BCG (Transformation – Delivering and sustaining breakthrough performance) and McKinsey (Six building blocks for creating a high-performing digital enterprise).

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Currently, what is seen is the growing gap between large companies that have already concluded their digital transformation process or have already gone through several stages of this process and small and medium-sized-enterprises (SMEs) initiatives. The SMEs know that it is essential for their survival to begin the digital transformation process, but they face ever-increasing challenges in starting it. An article published by McKinsey “Beyond financials: Helping small and medium-size enterprises thrive” in January 2022, summarizes the government public policies that some countries are putting into practice to support these companies. One of these practices is digital transformation that is highlighted as a great opportunity.

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The idea of this article, as well as the next ones, is to show how SMEs in some industries as: education, retail, health, the environment among others, can benefit from the digital transformation process by developing projects that fit their budget. They can leverage revenue and add a lot of value to their customers.