How Does Digital Transformation Help Small Businesses?

Businesses have always looked at digital transformation as a subsidiary to support business growth and incorporate resilience, but is it really the case? Digital disruption is not uncommon for businesses in the UK. With the developments of digital technologies, the traditional approaches of performing business tasks have been interrupted, and most companies have to immediately react to digitalisation and quick changes in the business markets.

Digital Transformation for Small Business

Why switch to a digitally transformed business strategy?

As small businesses turn towards methods to mitigate the effects of the Pandemic, digital transformation has been perceived as the best tool to achieve risk aversions. While the ceaseless emergence of digital innovations and machine learning influences the value of existing products and services by providing new data insights, digital disruption brings novelties into the product delivery while increasing the need to reevaluate the existing business techniques.

Digital innovations take no time to plunge into the business market, but many small businesses struggle with integrating these systems into business operations at multiple levels to increase efficiency and productivity. So how does a small business achieve digital transformation?

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How Do You Achieve Digital Transformation?

First, let us look at the process of incorporating digital advancement into your small business in a way that facilitates digital transformation. Combining digital tools and automation with solid leadership and management skills paves a path for your business to undergo a change influencing business growth with inclined trends.

Artificial Intelligence

For businesses, artificial intelligence has been a valuable asset when it comes to business forecasting and planning. This is done by incorporating AI in your research for customer behaviours and market research. Gathering information regarding your existing and prospective customers can help you better understand your capabilities to fulfil your consumers’ demands and a more efficient resource allocation. This leads to a more effective operational structure and freeing up resources for you to expand or further enhance your products. Incorporating AI in your research and development is the first step of ensuring your business moves towards digital transformation.

Big Data

Business decisions, actions, and existence in the digital business market generate data offering immense opportunities for revisiting and revising the existing business policies, methods, and practices. Thus there is a clear need to embrace and integrate novel data analytics ecosystems to build the business strategies upon the rapidly developing insights and solutions derived from these ecosystems.

The data-driven businesses are growing 30% more annually than they would have before incorporating “big data” analysis to strategise in daily business practices and decision-making processes. Handling big data is one of the complex business processes as the data collected can be from multiple sources and both structured and unstructured, so it is imperative to shift towards a digital transformation led by data-driven insights; the sooner, the better.

Cloud Adoption

One of the most influential digital developments for business transformation in the last decade is, no doubt, the cloud-based services and suites. Cloud suites have allowed businesses to go global without compromising on their local responsiveness. Cloud data storage, task and resource management, implementation on multiple levels, and cloud computing armed businesses with accurate data processing, safety, efficiency, and additional approach to their potential customers without breaching their privacy.

Cloud adoption on multiple organisational levels is not complicated as it doesn’t require expensive and extensive training and is easily adaptable by even small businesses. It is a valuable opportunity for small businesses to leverage technology to deliver avant-garde services and products for the ultimate customer experience. According to a report, 94% of SMEs appreciate the security, efficiency and accuracy of cloud integration, while 82% report reduced costs as they use the cloud for improving operational efficiency.


Digital transformation is not complex but might demand ample resources, and a business, regardless of size, may find it challenging. Having an in-house IT department might not be helpful as creating digital solutions may outstretch their capabilities. By outsourcing, you can speed up the process of this digital change by getting expert advice for multiple departments and not just for technical support.

Outsourcing has also elevated the chances of digital transformation for small businesses struggling with enough cash flow. The option to outsource an expert for a particular job is cost-effective in the longer run. For instance, businesses struggling with their accounts department in any business stage, whether they have one or not, can outsource a whole accounting department at much less cost than they might spend on recruiting or training in-house employees to be efficient in the same business processes.

By outsourcing a company for a flexible time, even large enterprises can tap into resources capable of filling their technology gaps and provide them with the expertise they might lack in certain departments. Outsourced teams have the experience critical for digital transformation, with the ability to immediately mobilise strategic policies and data science.

Benefits Of Digital Transformation

Cost Reduction

As mentioned before, achieving digital transformation is not expensive if you know where and when to invest. Digital transformation allows a small business to expand virtually without considering the prospect costs of business expansion in a new market. Small businesses that introduced digital automation and cloud software to their daily business practices have observed more positive trends in terms of quality and efficiency that they might have achieved with recruiting in-house employees or manual efforts. Through just an e-commerce website, a business can increase its reach to its target audiences that would otherwise be difficult and all this while mitigating their rent, utilities, and human resource expenses.

Effective Data-Driven Decision Making

Small businesses have a much harder time recovering from bad decisions because of inaccurate presumptions and analysis. Data-driven businesses are far more likely to achieve positive results of any decisions and strategies implicated than the ones blindly following what they believe is right for their business based on outdated methodologies. A data-driven and rightly analysed decision can eliminate the risks involved in industries, including premature liquidation. With digital transformation, you get access to refined and relevant information that allows you to make well informed and statistically sound decisions that leave little to no room for errors.

Empowering Businesses

Digital transformation allows businesses to make their operations more manageable and more efficient and empowers customers with the ease of access they require. Similar to how companies can form new B2B relationships with the help of technological advancements, customers can just as quickly get in touch with the business of their choice and voice their demands. For example, a renowned apparel brand (NIKE), with the help of improved analytics and digital transformation, could connect to their customers at a much larger scale, allowing instant feedback data that assisted them in increasing product quality and gaining higher consumer satisfaction.

Focus on Prioritizing Customer experience

A great customer experience helps small businesses gain a loyal client for a long period of time. So it is imperative for businesses to focus on building up strategies to create the perfect customer experience without compromising on the quality of the product or services. In contrast, it helps a business strategies better for improved quality through data-driven insights.

Collaborative Structure

Digital transformation sometimes means collaborating with third-party solution providers to enhance the business productiveness while opening new doors to limitless opportunities. Collaborative networks are the strategic alliances made to act as a source of support and purposeful collaboration whenever a business opportunity arises.

Partnering up with the right businesses also provides you with the freedom to expand your business in multiple directions, whether you want to expand your service area, target audience, or service structure.


The digital transformation helps in developing more flexible, agile, efficient, and sustainable solutions for businesses of all sizes and various industries. And this does not mean just the technology but also how a business introduces new organisational forms or changing the business model altogether. Therefore, to extract the full potential of a business idea, it is important to explore all the options you might be missing out on because of reluctance to adapt to apparently overwhelming new technologies, innovations and automation.

For further information on making your accounting more efficient read our accounting software tools article.

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