What’s the Scope of Digitization for Startups?
Technology has transformed our lives – no leaf is unturned though. Business operations have become efficient, buying decisions are well-informed, and entire industry vertical is transformed as and when enterprises are adapting seamless integration of new technologies with their regular processes. From healthcare, automobile, education, to transportation and beyond, the shift to consumerism through digitization offers following benefits:
- Streamline business processes
- Improve level of efficiency
- Deliver smooth customer experiences
- Innovative solutions
- New product pipeline
- Streamlined processes
- Team of skilled members
- Strong, reliable operational systems
- Benefits from experience
- Diverse in professions
- Excellent internal knowhow
- Good networking skills
- Cheaper products/services than popular brands
- Higher fixed costs
- Limited top management
- Lack of resources
- Unclear strategy
- Reworking business plans at regular intervals
- Lack of aggressive promotion strategies
- Less recognition
- New supply chains
- New markets
- Availability of skills and expertise
- Flexible business model
- Integration of new technologies
- Interactive website design to attract customers
- Exchange rate
- Reduced demand
- Finance-related issues
Benefits That Digitization Offers to Startups
Globally, around a billion devices are connected today; this number is expected to reach up to 50 billion devices by 2020. Opportunity awaits every industry vertical – energy, retail, arts, entertainment, real estate, financial services, education etc. The Internet of Things (IoT) is soon emerging as the next wave of technology innovation – Internet of Everything, i.e. connecting people, processes, things, and data across the globe thus creating unlimited opportunities to explore. Technology is bound to transform every industry; why should startups be left behind then? Possibilities are limited by imagination; IoE will revolutionize business processes significantly.
With IoT, networking technology is accessible at remote locations; it has made the unthinkable possible. However, a huge challenge posed in front of companies is building the appropriate infrastructure. Major problems faced by startups include scalability and changes in data management processes along with standardized cross-platform infrastructure that is highly secure.
Interconnected network of devices, machines, and objects enable small businesses to generate, analyze and report intelligence data, increase efficiency, and develop a strong, reliable business model. IoE creates value at reduced costs, improves productivity, generate new revenue objects, and enhance customer experience.
Startups can garner benefits like improved supply chain, innovation, and asset utilization. However, the need of the hour is a robust, secure network infrastructure providing convergence of diverse networks, upscaling to meet increased demands, advanced data analytics and integration of new BI applications for increasing productivity without compromising on security levels.
Business agility requires deployment of IT solutions to store and manage remote data over cloud. IoT has given rise to new operational efficiency, data security, distributed control and intelligence, quicker decision-making processes, better revenue generation, and improved business opportunities.
Digitization and connectivity will lead to enhanced customer experiences, better asset utilization, and a clear business strategy that will in turn result in development of global economy.
Startups can learn from the best practices of digitization employed by some of the successful companies around the world.
> Work Backwards: Digitization allows enterprises to redefine the fundamental principles governing a business process; automated decisions eliminate manual processes. Digitization begins by designing a future-state of the current process without any consideration about present limitations. For instance, reducing the turnaround time from days to few minutes. Current limitations need to be challenged thus leading to innovation.
> End-to-end customer experience: Digital transformation of certain specific stages of the customer journey may improve particular efficiencies however it is not enough to deliver a seamless customer experience. Process digitization involves transformation every function of the overall customer experience. Involving the end customers will offer the much required impetus to think beyond conventional wisdom.
Cross-functional abilities will result in providing an all-purpose solution to customers thus enhancing a better end-to-end user experience. It will thus challenge the tradition system of status quo. Groups including members having different skill sets lead to better communication, brainstorming activities, true team effort thereby resulting in smoother innovation.
> Higher Capabilities: Developing in-house capabilities creates a Center of Excellence that hugely contributes to the goal of digital transformation. Skilled team members are able to implement digitized processes quickly. However, many enterprises are looking for hiring external talent for addressing the need of new roles and skill sets. For instance, companies outsource certain activities like web designing, data analytics etc.
Modern startups must consider its importance and choose their digital transformation strategy very carefully. If you wish outsource certain activities to reduce operational costs, you must hire a well-trusted and reliable service provider. More importantly, you must also gradually impart those skills to your team members to incorporate the necessary technologies in a way that they are implemented across multiple processes thus maximizing your economies of scale.
> Become A Fast-Mover: Conventional IT solutions are delivered successfully years after the kickoff of the project. Digitization helps in delivering improved performance within a shorter span, say, 12 weeks. Using low-cost offshore resources is a viable option. Such resources, available online, are used with pilot customers along with development of a robust IT solution simultaneously. It mitigates risks of delay and accelerates the overall production process.
Decision-making can often hamper the process of becoming a fast-mover. Digital transformation of your startup must be supported by all stakeholders along with major decisions taken by different project heads.
> Deployment of IT innovation: Startups approaching digital transformation need to think beyond traditional deployment due to fundamental changes in organizational processes. For example, if you are in telecom industry, your customers can apply for your services through stores instead of self-service kiosks. Automation of banks may opt for reviewing automatically approved credit applications.
It is easier for you to roll in another unit/department to exclusively handle digital processes; you can hire more employees in the unit when the volumes increase. It ensures quicker and easier transition to automated processes without modifying old behavior much. Migrating the complete business process will end up in recruiting a good team size for the digital unit.
Digitization of processes requires a complete transformation of their value proposition to offer ultimate customer satisfaction. Your business model and starting point can determine how much value is at stake however you can arrive at a rough cost estimate with a comparative analysis and cost allocation to end-to-end business processes.
Transforming Leadership with Digitization
“Be a yardstick of quality. Some people aren't used to an environment where excellence is expected” - Steve Jobs
- Encourage personal interaction: Digital transformation helps business leaders interact easily with the team members.
- Better decision-making: Integrating new technologies has made data analysis simpler enabling quicker and better business decisions.
- Globalization: With IoT and cloud-based services, enterprises have team members spread across greater geographical distances. Skype calls, blogs, video chats, etc. enables leaders communicate with the entire team at once.
- Refinements to the management style and team: Startups are recognized by the distinctive management style adopted by the enterprise. A new wave of thought process is exhibited in the innovative leadership styles implemented in a startup. Every team member possesses a different skill set which brings about a change in the operational business model as well. Think differently – the mantra for startup success.
- Interesting methods of supervision and control: Routine activities are no longer mundane for a business leader. Digital transformation has equipped entrepreneurs with improved tools and better ways of reaching out to their target audience as well as measuring overall business performance. Conference calls are conducted over Skype to assess the team’s performance.
- Cultural differences: Operating on a global scale requires business leaders to equip themselves with skills to overcome challenges posed by cultural differences. Digital transformation has led to problems of remote management. Entrepreneurs need to learn foreign languages to address the needs of a global team.
- Communication of clear business strategy: keeping pace with ever-changing change management requires entrepreneurs to keep team members updated about organizational changes. Recruitment of people with new competency skills must be encouraged to increase healthy competition among employees and reduce monotony.
Collaboration: The Way Forward in Digitizing Startups
Digitization is changing the nature of competition in the business world; incumbent enterprises are at risk of lagging behind. Startup organizations must respond appropriately to the challenge of digital revolution.
Digital transformation is revolutionizing the office functions, interaction among employees, and other business processes. Thus, enterprises will constantly demand for robust collaboration of multiple platforms to deliver a viable IT solution to customers. Social platform is quickly emerging as a tool for business innovation. It will soon gather momentum to become a valuable business enabler. Enterprise collaboration demands availability of reliable IT solutions available across multiple platforms. Startups need to evolve their business model in a way that it becomes their Centre of Excellence (CoE) to address specific customer needs.
To gain competitive edge, enterprises which are engaging in continuous innovation can survive only employees interact with each other and at all levels to deliver a unified customer solution. Involve your employees in decision – making processes to motivate them to work harder and come out with better outcomes.