Markets change, economic conditions shift, but the fundamentals of growing a business seem to remain more or less the same from year to year. As the old business proverb says, you can increase your revenues by doing one of three things:
- Increase the price each customer pays for your product
- Increase the number of customers
- Increase both the price each customer pays AND the number of customers
But wait a minute… what about disruptive innovation? How does this basic formula account for the technological changes that can sweep through an entire industry quicker than you can order a sandwich from Uber Eats?
It doesn’t, and neither does any business growth strategy that fails to include a digital transformation strategy.
That’s why any growth strategy worth its weight in paperclips must integrate a plan for evolving the business digitally. Especially in the wake of COVID, if you aim to expand, you must also aim to optimize every aspect of your company using digital solutions.
What is a digital transformation strategy?
A digital transformation strategy (DTS) is a plan for enhancing each business function by implementing digital technologies that will improve efficiency and foster growth.
Think of your DTS as a wide-reaching campaign to make every part of your company better. Digital transformation isn’t simply an e-commerce add-on to your website, a new set of data-gathering tools for Marketing to play with, or a set of robots for the production floor. Depending on your business and the growth outcomes you’re targeting, digital transformation could include all of these initiatives or none of them.
A DTS examines all the activities you do in your business and asks, “How could digital technology take this to the next level?”
For instance, you might analyze all the processes your Accounting & Finance team performs and discover that digital solutions could automate invoicing, reduce the need for duplicate data entry, and enable you to predict which repeat customers are ready to buy from you again. You might also scrutinize your customers’ journey, end to end, and find that digital marketing, automated email responses, and e-commerce solutions could make their experience more satisfying and memorable.
The list goes on and on. From accounts receivables to zero-waste policies, digital transformation enables you to streamline business processes, boost revenues, and build up resilience to handle whatever new changes the future may bring.
How do you align digital transformation with your plans for growth?
For small and medium-sized businesses, business growth strategy typically aims to achieve one or more of the following four goals:
- Gain greater share of the existing market
- Develop a new market
- Create a new product or service
- Take advantage of new marketing channels
Digital solutions can, and should, contribute to success on each of these fronts. In fact, if they don’t play a starring role in your growth plan, the chances of success are limited. As your competitors make their plans, you can be sure they’re using every weapon at their disposal to gain an edge. And these days, the most powerful weapons are digital tools.
The good news is that you don’t need a 20-person IT department (or even a CIO) to implement digital technologies to grow your business. You just need to ask yourself a few strategic questions so you can incorporate digital transformation into your overall plans for advancement.
How can digital solutions help gain greater market share?
Digital solutions that automate business processes or production save time and money. Unspent funds can then fuel marketing efforts.
What’s more, new technologies can offer new ways to find prospects, nurture leads, and convert leads into paying customers. For example, a CRM (customer relationship management system), combined with email marketing software can enable you to stay in close contact with a prospect with little manual effort. Add-ons to LinkedIn can help you identify potential customers and analyze their personality before you even interact with them.
How can digital solutions help develop new markets?
Digital technologies make it possible for you to prospect in a new market halfway around the world without every leaving home base. Video conferencing, for example, has revolutionized the way export partnerships develop.
New tools for creating, scheduling, and monitoring social media posts also enable companies to grow a global reach. Your entire team can be sleeping while your content marketing makes a splash somewhere in another time zone.
And let’s not overlook the way AI is facilitating cross-cultural communication. AI-driven translation platforms now enable you to upload a message in your native language and receive a version in another language within a few hours.
How can digital solutions create a new product or service?
One of the biggest barriers to innovation is the lack of time. When teams get tied up in the nitty-gritty of daily operations, there’s little space for daydreaming and toying with possibilities.
Implementing digital solutions to streamline everyday activities buys breathing space so creativity can flourish. Once you’ve freed your team to get inventive, you can encourage them to invest in digital play, experimenting with technologies that could lead to novel offerings. Google models this approach: it expects all employees to invest 20% of their work time engaged in creative projects they feel will benefit the company.
How can digital solutions take advantage of new marketing channels?
Digital solutions can not only take advantage of existing marketing channels—they can also open up new marketing channels that may not have been available last year or last week. For example, you may be able to feed automated ads to digital signage across town or explore social media advertising. The rise of digital events, such as virtual summits and online conferences, is also spawning new opportunities for various forms of advertising and sponsorship.
Why you need digital transformation to survive growth
Business growth is exciting, but it also brings many operational challenges—often more quickly than expected. When that happens, you may find yourself unprepared to deal with a surge in market demand, gaps in your supply chain, and a lack of skilled staff.
Incorporating a digital transformation strategy into your business growth strategy sets you up to sail into success smoothly. It ensures that you consider efficiency, talent development, and new technological developments as part of your growth plan rather than accidental spinoffs.
We’re living now in an age of persistent disruption, and the best way to keep up with the onslaught of change is to embrace it head on. In an age of uncertainty, weaving a digital transformation strategy into your business growth strategy is the surest way to set yourself up for enduring prosperity.
 Murphy, B., Jr. (2020, November 1). Google Says It Still Uses the ’20-Percent Rule,’ and You Should Totally Copy It. Inc. https://www.inc.com/bill-murphy-jr/google-says-it-still-uses-20-percent-rule-you-should-totally-copy-it.html