“For those who still believe that digitization is about creating social media sites or developing a responsive website, here is the truth: Digital technologies will disrupt value chains, organizational structures, operational processes and revenue models. And they will change every industry and every company. Managing digital transformation will decide which businesses will survive and which not” (Torben, 2016).
Digitization through leveraging digital tools and technologies is having a profound effect on how business is currently being conducted. It has already had a significant disruptive influence on many industries and is threatening to disrupt many others. The stakes are clearly high and some industries are more vulnerable than others. However, there are steps that organizations can take to increase their rewards and to decrease their risks. Digital transformation is the journey an organization takes in order to ‘digitize’. It can be defined as follows: “Digital business transformation is organizational change through the use of digital technologies and business models to improve performance” (Wade, 2014, p.3).
In a 2013 study of senior executives and management, it was found that achieving digital transformation within two years was critical to their organization’s survival (Capgemini, 2013). However, this transformation – from adopting a small number of digital applications to becoming a truly ‘digital enterprise’ – is a real challenge that most organizations are struggling with (Doherty et al, 2015). Whilst most organizations will accept that they are not fully ‘digitized’, it is fairly safe to assume that most have already adopted some form of digital technology e.g. a website or social media tools (Doherty et al, 2015).
However, a lot of small firms see digitization as an issue for larger firms. This view is echoed by Brune, (2017); “SMEs tend to see “digitize or die” as a problem only for large companies. We need to make them aware of the fact that digitization is their business.”
However, given the importance of SMEs to the economy, it is fundamental that all firms – of all sizes embrace digitization in order to remain competitive and to survive.
The Innovation Value Institute can help support SMEs on this digital transformation journey ensuring they leverage digital technologies to gain maximum value for their business.