In spite of government initiatives to encourage digitalization including funding support, about half of Singaporean SMEs have yet to respond positively to digitalization. And less than half of SMEs have actually started on the path to digitalization.

Let’s consider why digitalization is such an important activity that SMEs has got to be involved in. For if a business owner is concerned about increasing his revenue and doing his best to cope with getting enough employees because of the manpower crunch, then he has to be concerned about digitalization. 

In view of the fact that a quarter of digitalization initiatives failed, you, the business owner, have to have an idea of what you are doing and how that will fit into your overall business strategy. On the other hand, if a business owner does it correctly, digitalization could well lead to possible expansion of your business since you will be acquiring capabilities in your businesses which you didn’t have before.

In short, digitalization opens up possibilities that you may not think of prior to this process and that is why doing things the old fashioned way would not have helped. But that is precisely what some businesses are doing, so it seems.

What Digitalization/Automation entails

But in truth if you have been using an email autoresponder to communicate with your customers and shareholders, or if you use accounting software to make your financial controls more efficient and if you employ facebook marketing, social media and so on, you have already digitalized to some extent.

To take your digitalization further, digitalization or automation has to be business focussed and business-driven. That’s because digitalization requires expenditure on hardware and software, and you probably need external experts, consultants, to advise you as well as internal skilled manpower with various IT skill sets to make it work. A haphazard implementation without these strategic considerations can only lead to failure. Availability of subsidies is, therefore, a bonus.

To be business-driven and focussed means that automation must make a significant impact on the bottom line and lead to revenue growth. It must also be scalable in tandem with your business growth as digitalization and automation start to show results. Hence advice is needed as to what type of hardware and software is best for your type of business.

Eliminate Manual & Repetitive Tasks

For modern business tends to be complex and a change in one part of the system would have an impact on the other, hence you need to map out your business processes. A good grasp of your operational processes and how you deliver value is therefore important. 

The processes most amenable to automation would be those that are time-consuming, demanding the involvement of employees, and repetitive tasks. These are the easiest to automate with significant gains and cost savings of manpower.

Once these are automated, then automate more complex operations until your entire value chain is automated. Indeed automation can be carried through to your supply chain as some businesses have already done reducing wastage and inventory. 

Note that what you are doing is essentially the implementation of lean and six-sigma towards greater productivity, efficiency with less wastage and should, therefore, bringing you considerable cost savings.

Improve & Enhance your customers’ experience

On the outbound side, automation should focus on customer experience and be implemented in a way that includes a digital interface. You probably would need to redesign your products so that they would add a different flavour to customers’ experience as well improve your service delivery and overall productivity. Such an experience, for example, can be delivered by eCommerce.

If you are in a service industry, your business processes would be closely intertwined with customers’ interactions. Your strategy here is to deliver an optimal customer experience of your services. A redesign of your service delivery will help you to achieve this. 

A good example here is how fast-food chains and some restaurants have redesigned the ordering processes. Using an ordering process based on an iPad/tablet or a digital panel, the customer can make the choices for his order and pay for it. Because the payment is likely to be digital, you can also track the customers’ interactions such as purchases over time as well.

Beyond this, investment in a Customer Relationship Management(CRM) software will help you to understand past customer purchasing behaviour to predict their future buying patterns. This information can help you make better business decisions for the future.

Make better informed, data-driven business decisions

You would have noticed that digitalization and automation will generate a lot of data. Please do not be afraid of data. If you have data, your decision making is likely to be more based on facts which data can provide rather than plain old intuition which may be just wrong. Get help to organize your data, subject it to analysis to yield insights into your business.

You already have some data from your accounts. This is financial data. With proper analysis, you can squeeze out more information than just the balance sheet and Profit and Loss statement. If you are not getting enough information, make sure you acquaint yourself with what’s possible and pursue it.

We have already mentioned customer data analytics earlier on. There are 2 other important areas where automation can provide data to inform your business decisions.

There is data about your value chain or process data as it is about your business processes. This is where data truly means better decisions. Data here can be used to profitably match supply and demand in various business settings, predict the outcome of different policy choices, and choose the best cost of action in the face of risk and uncertainty.

Then you have people analytics which is how you manage people at work. Now you can use state-of-the-art techniques to recruit and retain great people. Data and analysis can help you with soft skills decisions on people-related issues such as recruiting, performance evaluation, leadership, hiring and promotion, job design, compensation and collaboration.

That’s why you automate

The outcome from Digitalization is not that you can automate and be more productive, or that there are tremendous cost-savings. Because everything is digital, almost everything can be documented and tracked accurately and precisely. This has important implications for strategic decision making. Your best bet is no longer a hunch or intuition or guesswork based on possible scenarios you can imagine. Now your decisions can be grounded on facts captured in the data which you have now have at hand, and which you can analyse to reveal trends and make predictive analysis.

Any reason why you should not automate and digitalize now? Do it instead of being left behind. 

Indeed, whether you’re in manufacturing or services, you can automate and digitalize your entire value chain, starting with your supply chain, your internal value chain, marketing and sales. At this point, you would be using an ERP (Enterprise Resources Planning) software that allows you to track how your value creation is doing throughout the entire chain. This allows you to keep your inventory at low levels just enough for you to run your business efficiently, cut cost significantly and optimize all your operations with increased profitability. This would be the essence of lean business systems, increasing efficiency and reducing waste.

Once you see the entire roadmap, you can go into detail about implementation where tactical considerations become important. To delve into that you need to have a good understanding of your business processes and how you deliver your products/services. Then you can automate the processes sensibly without getting into trouble.

SHARE
Previous articleUsing Design Thinking for problem-solving issues in SMEs
Next articleNew Book “Conquering Stress” Out Now
Dr Douglas Kong is a Certified Executive and Life Coach specialising in helping individuals, teams and organization to function optimally with peak performance in the workplace. He helps people by assisting them to overcome their personal performance barriers and by increasing their social and interpersonal functioning and communication skills. He is a retired psychiatrist whose past training and experience are focused on Psychoanalytic Psychotherapy, Developmental Psychiatry and Group Dynamics.