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Why Is Digital Transformation Important For The SMEs

Digital transformation is powered by technologies like data analytics, cloud storage and services, machine learning, and artificial intelligence. Everyday digital innovations are reimagining the enterprises; not only of the big business houses but also of the SMEs.Some common digital tools used by SMEs to prosper are company websites, search engine optimization, social media, mobile app, customer relationship management tools, and online directories.

SMEs Moving Towards Digital Transformation

Digitalization in the digital era is mandatory for any business and the SMEs are not far behind. Not only the big chunk of enterprises, but the SMEs can now also provide accurate data and keep critical records and calculations with ease. Digital innovation has enabled SMEs to introduce new products, new services, and new innovative ways of communication. Generally, SMEs are the backbone a country’s economic development; as a result, more innovation and revenue on their part means overall national progress. More mobility and flexibility through the digital transformation of SMEs make them almost at par with big companies in the market. Even at the developing stage, they look for the best digital solutions to add more sustainability. They are always looking for more digital-specific initiatives to improve operational efficiency and build better strategies.

Let’s have a look at how SMEs get more benefits from their digital engagement. 

Improved Operational Efficiency 

Digital transformation has the potential to make complete digitalization of an SME; mostly of the operational part. Operations management for small companies is a challenge, the low resource base and lack of guidance from experienced ends are the biggest hurdles. This is a major threat to the SMEs from the big players. Only digitalization can improve the quality of the present operational structure. This process can help to reduce the impact of the operational barriers and can increase competitive advantage, better operational performance, and achieve steady business growth. This magical change can be visible in the operational part of a small business house with the help of digital transformation. The systematic implementation of digital ways can shape an SME and its operations too. The increased operational efficiency results in overall development for every small and medium business. So a small business must learn and adopt digital transformation for smoother operations with lesser cost. Also, this improved process helps to create new business models and further research and development.

Artificial Intelligence

The enactment of Artificial Intelligence (AI) in small businesses makes communication smooth, simple. It has been noticed that AI was already in use by the big organizations of the world, but currently, SMEs are also taking the same path. AI has just changed the way SMEs have operated to date. So, now they can increase their production, compete and grow in this highly competitive world. AI automates the product development and operations of every business saving time and costs. Nowadays the AI even helps to understand the behavioral pattern of the customers and to build strategies of SMEs depending on that pattern. AI-enabled SMEs can easily do various things like handling various tasks in no time, fixing troubles quickly, helping more customers with less human resource presence, and identifying and fixing complex problems easily. AI has paved the way for fast logistics movement, better marketing, a smart workplace, and bug fixes in IT startups. Thus, AI is nothing but the future acquaintance for SMEs.

Related: 5 Ways Artificial Intelligence Is Improving The Web Hosting Industry

Increased Revenue Generation

Digital transformation can open new opportunities for SMEs like more profitability and better revenue growth. This change has enabled small businesses with enough cash reserves to run their daily operations smoothly. Some very common digital tools used by small enterprises to generate better revenue are: automated accounting tools, invoicing software, and sales funnel software, CRMs.

More digitalized SMEs have a chance of experiencing more revenue growth than their non-digitalized counterparts.

This happens in two ways:

  • Through the use of various digital tools like communication and collaboration tools, design tools, analytics tools, and marketing tools for executing work smoothly.
  • Digitalization brings more revenue-generating customers from new markets. Empowering the resource through technology. This can help small businesses to make more savings to generate extra revenue and boost more growth.

The extra revenue generated by digital technologies paves the way for better opportunities and lifestyles for both the companies and the employees.

Related: A Simple Way To Increase Revenue From Your Web Projects

Better Team Collaboration

Normally the SMEs try to manage stuff with a smaller team; so, team collaboration is a prior necessity for them. Presently the team collaboration has become digital collaboration, thanks to digital tools. It has been very clear to the SMEs that only digital team management can increase team productivity and improve workflows. Team management with digital tools increases employee satisfaction and keeps them more focused on work. The small and medium business houses have implemented digital collaboration in the organization in various ways like taking a strategic approach to solving problems among the team, using collaboration tools for team management, and using cloud storage solutions to store and share documents and files.

The impact of these digital policies among the team is felt in excellent outcomes like better communication and coordination, increased productivity, improved team interaction, quick access to information, and improved business execution from every desk. Digitally enabled SMEs can quickly communicate and collaborate among the team, and get the work done more effectively. Some of them even say that digital collaboration has made the work fun for them. Now they can connect from remote places and work efficiently.

Related: 8 Highly Effective Online Collaboration Tools For Your Remote Team

Higher Customer Engagement

For any business, customer satisfaction matters the most. Being in an emulous society, the customers expect the best experience from every platform they pay. Therefore, keeping the customers happy has become a challenging job, mostly for SMEs. Their digital culture has become a game-changer here and their customers have gained trust.

How does the digital transformation drive customer engagement?

The best customer experience is developed when the brand and the customers know each other and they feel a sense of bonding among them. With the digital tools, SMEs can precisely track the digital footprints left by their customers and build a better marketing and customer satisfaction strategy. Those tools help to store existing and prospective customers’ information, identify new sales opportunities among customers, attract them towards future products, and run successful marketing campaigns. Common tools chosen by small and medium business houses to improve the customer experience are CRM or customer relationship management, digital help desk, modern email marketing tools, call center software, and analytics tools to track customer activity. Over time, the customers seem to form a personal connection with the company resulting in enhancement of overall customer contentment.

Related: 10 Best Customer Onboarding Strategies For Increased Customer Engagement

Supply Chain Management

The digital transformation not only affects the performance of the SMEs but also develops a perfect ecosystem of supply chain management. The firms can break the traditional and geographical boundaries and can operate in new spaces and niches which were not accessible before. Now the firms are equipped with more tools to collect and analyze the data with digital equipment to optimize supply chain management. The research shows that companies who have digitized their supply chain management can expect better revenue growth and successful customer satisfaction.

How the digital revolution has made supply chain management smoother?

  • Now the SMEs have powerful and user-friendly analytical tools for organizing and processing a large set of data and deciding on the extracted insights.
  • The SMEs can track a larger set of audience and can keep records of all the follow-ups in a matter of few clicks.


The world has evolved a lot in recent years and digital technologies and transformation for small and medium companies are a must now. To improve business competitiveness, small and medium-sized enterprises are always trying to adopt and use digital tools more thoroughly. They have felt that technology is not only a choice but an important operational strategy. The digital transformation of SMEs has much compensated for their limited resources of human and financial. This transformation leads to better collaboration and higher employee productivity inside the organization and more successful customer satisfaction outside the organization. The transition of one SME from less digital to more digital just starts with a clear strategy and in the end becomes a pillar of success.

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I believe in creating enriching content that is readable and interesting. I work on content related to web hosting, SEO, Ecommerce and social media. Putting things across with the power of words and crafting useful content are my prime objectives.

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