1.Reimagined business model
From taking the offline stores online to shifting to a cloud environment and adopting a hybrid business model, SMEs have been through a lot of pressure.
While digitally mature companies weathered the storm well, other enterprises had difficulty adapting to digital almost overnight. Moreover, the nationwide lockdown and social distancing mandates necessitated production lines and distribution chains changes.
This puts the onus on business owners to pivot and reimagine how they reach their customers and serve them.
A report by MSMEx that studies the impact of COVID-19 on Indian MSMEs shows that:
- 50% of the respondents agree that they’ve yet to fully recover from the consequences of both waves of the pandemic.
- Nearly 43% of MSMEs affirmed changing their business model to survive the pandemic.
- While 56% of MSMEs focused on digital marketing and payment, 38% focused on enhancing customer retention.
Here’s an example of what the change looks like – healthcare service providers use video conversations to connect caregivers with patients. Another example is an events company that has transitioned from holding in-person events to hosting online workshops, virtual events, and webinars.
Takeaway: while digital adoption was the only choice for SMEs when the pandemic hit, it’s now the norm. That’s why, to avoid being wiped out by the next wave of disruption, organizations must not only stay informed of changes but also constantly innovate.
2.Tech Became Table Stakes
SMEs have awakened to the world of tech after the pandemic. As a result, a growing number of SMEs are emphasizing cloud adoption to enable business processes, boost productivity and enable remote working.
A report by Salesforce shows that:
- “42% of growing SMBs have accelerated their technology investments over the past year (compared to 33% in August 2020).”
- “51% of growing SMBs have accelerated their investments in customer service technology over the past year. Currently, 65% use customer service software.”
Whether it means spreading business wings outside of the current geography, enabling digital transactions, or enabling more robust cyber security practices, tech is at the heart of digital transformation for SMEs.
According to CISCO , here are the top 5 investment priority areas for small businesses:
- Rank #1: Cloud solutions
- Rank #2: Purchase/Upgrade IT infrastructure hardware and software
- Rank #3: Security
- Rank #4: Customer experience solution
- Rank #5: Collaboration solution
Takeaway: tech is the driver of digital transformation for SMEs. While it comes with a learning curve and hiccups are inevitable, the journey to the cloud is the most important change enforced by the pandemic and creates a future-proof and resilient business.
3. Data is the cornerstone of change
Every touchpoint, transaction, and interaction online generates data. However, this data is raw and must be cleaned and managed before it can fuel business and marketing divisions.
SMEs have realized the potential of data as it helps business leaders to view market trends, customer behavior, expectation, and forecast the future. Moreover, predictive strategies are becoming more prominent with the advent of data usage in SMEs. As a result, data enables businesses to make more precise, accurate decisions which was not the case in the traditional business model.
SMEs can source, clean, and manage data to make informed decisions by adopting digital transformation. These insights are helping small businesses maximize business performance. According to McKinsey :
Data, combined with analytics, can yield 15% to 20% growth in revenue.
Takeaway: data is the cornerstone of business and marketing decisions. It reveals insights into customer preference and market trends, empowering you to make informed decisions.
4. Evolving customer behavior
While online shopping was the need of the hour during the lockdown, customers have now grown accustomed to its convenience. So whether it’s a B2B or a B2C customer, expectations have risen, and the bars have been set high.
Therefore, moving forward, it’s integral for companies to focus on how well they can reach and serve their customers in the next normal.
Another facet of customer engagement is empathy. Pandemic made businesses communicate in a manner like never before. Placing human emotions in uncertain times is vital as tone-deaf companies suffer the heat of criticism from their customers.
Whether customer experience means utilizing virtual reality to try on the product before purchasing or digital transactions to inspire contactless solutions, SMEs have to take a route that leads to happy customers, even in the digital era.
Takeaway: While providing a remarkable customer experience is nothing new, doing so in a digitally-driven world comes with a learning curve. It is, nonetheless, necessary. Finally, SMEs should use data and technology to achieve this goal.
5. Hybrid working is the next normal
Hybrid working was perhaps not the first choice for either employees or employers. However, the pandemic revealed a positive side of remote working that amplified productivity and lowered operational costs, making it a preferable choice of work.
Analyst firm IDC projects that “the U.S. mobile worker population will grow at a steady rate over the next four years, increasing from 78.5 million in 2020 to 93.5 million mobile workers in 2024.”
Thus, hybrid working is here to stay. And, to support the remote workforce, SMEs should embrace tech and allow real-time collaboration and access to data.
According to a Boston Consulting Group survey on employee sentiment (conducted in the US, Germany, and India):
- An appetite for flexible ways of working has increased.
- 75% surveyed felt they maintained or enhanced their perceived productivity on individual tasks in the pandemic’s initial months.
- Only 51% of respondents felt the same about collaborative tasks.
Takeaway: Hybrid working was the need of the hour. While it possesses multiple benefits, it also takes a toll on mental health and hinders collaboration. Therefore, moving forward, SMEs must carve a path to a hybrid working environment that enables their people to work from anywhere in the world while maintaining team cohesion and collaboration.
6. Organizational resiliency is non-negotiable
Resilience and digital maturity are the secret sauce to enterprises that sprang successfully from the disruption. A report by Deloitte notes that “digital enterprises have an edge over less digitally mature competitors.” The report reveals that digitally mature companies are more resilient and better able to navigate the difficult waters.
Resilience, simply put, is the enterprise’s ability to rise out of disruption unaffected.
Digital transformation can help companies build resilience that prevents turbulence consequences of such unforeseen circumstances. Therefore, building resilience and disaster management plans ahead of time is vital. This will ensure that pandemic, or any other disruption, does not catch you off-guard.
Takeaway: it’s more important than ever for enterprises to build resilience so that they not only survive the disruption but thrive.