Three ways to profit from digital disruption
Virtually every business has been transformed by technology. With the power of smartphones, Wi-Fi networks and cloud computing, businesses no longer need physical shopfronts, and customers want around the clock access to services. This ‘digital disruption’ offers significant opportunities for companies.
For example, in their recent book, Changing Shape: Institutions for a Digital Age, Lindsay Tanner and Martin Stewart-Weeks discuss a Melbourne stockbroker that has outsourced basic data and aggregation work to India – tasks that are completed during Australian business hours, at lower cost and to high standards.
In our view, every business can profit from digital disruption – especially small to medium-sized enterprises (SMEs). However, in our experience, much of the material on digital disruption and digital technologies has focused on large businesses rather than SMEs.
So, to help SMEs succeed in the digital era, we have revisited a useful Deloitte report, Digital disruption: Short fuse, big bang? Here, Deloitte set out nine strategies (or levers); we’ll focus on the levers most relevant to SMEs.
Lever one: Managing people
Digital tools can make it easier and cheaper for companies to recruit quality staff. For instance, Deloitte uses a combination of LinkedIn, Facebook and Twitter to harness professional networks and find new employees. This approach has helped Deloitte cut its recruitment spend, and to find employees that are more engaged and stay longer.
How are you currently managing your recruiting efforts? Are you exploiting the potential of social media such as LinkedIn to source new staff?
Also, digital technology means that workers no longer need to be physically present to access training courses and complete vital tasks. This can improve workforce productivity and offer the flexibility some younger employees crave.
Lever two: Managing overheads
Digital tools also allow companies to reduce administrative costs and redirect funds to core business tasks.
For instance, by using cloud computing, SMEs can cut down on their information technology infrastructure spending and only pay for the services and functions they use. You don’t need to maintain banks of expensive hardware that sit idle for large chunks of time.
Deloitte also discusses how companies can use digital tools to run marketing and advertising campaigns at lower cost and with greater flexibility. For example, SMEs can quickly scale campaigns up and down, and track their effectiveness through easy-to-use analytics.
Lever three: Managing risk
When it comes to digital disruption, risk comes in many forms. First, there’s the risk of doing nothing and failing to embrace new technology. Second, all businesses need to invest in robust security arrangements and protect against cyber threats. Without a flexible approach to risk management, SMEs may suffer – rather than prosper – in the digital era.
We recommend you take a look at the report and think about the role digital technology plays – and could play – in your business.
At Macleay Partners, we use digital tools to help clients manage challenges and enhance their operations. You can see an example here. If you have any questions on how your business could profit from digital disruption, please contact Macleay Partners Director Justin Ward at firstname.lastname@example.org or on 0420 305 345.
P.S. If you liked this post, you might also like Getting ahead in the cloud: a quick guide to cloud computing or Turning around a business with Xero.