Because larger companies are able to offer personalized experiences to customers in virtually any way they choose, the current economic climate is threatening the survival and success of many small and medium-sized businesses. Many of these leaders have made substantial digital investments to help their businesses run. Even though teams are working hard to harness the data generated by these technologies it still takes longer to find answers to the basic KPI questions that are essential to the operation of the business. What digital strategies are small and medium-sized businesses missing? Two things are required to answer this question: you must understand that your leadership team needs to be able to provide specialized business analytics expertise and that your organization must change the way it makes decisions.
While digital transformation is hot, most leaders don't understand its full meaning. April Walker, a highly-respected technology executive and global C-Suite advisor at Microsoft, gave this definition to a class in Drexel University's Executive MBA program.
The current economic climate is threatening the survival and success of many small and medium-sized businesses. Larger organizations are able to offer personalized experiences to customers in virtually any way they choose.
Many of these leaders have made significant investments in digital technology to help their companies run. Although they may have implemented technology across many business functions (HR, governance, cybersecurity, customer relation management (CRM), enterprise resources planning (ERP), finance and risk), they did not invest in AI or predictive analysis. Even though teams are working hard to harness the data generated by these technologies it still takes longer to find answers to the basic KPI questions that are crucial to running a business. These include those about customer churn and retention rates, employee satisfaction, turnover, average deal sizes, and billings according to key products or services. What's worse, the reports that are finally produced do not provide insight into the reasons for the changes.
If you already have all of the above, what digital strategies do small and medium-sized businesses need? Two things are required to answer this question: you must understand that your leadership team needs to be able to provide specialized business analytics expertise and that your organization must change the way it makes decisions.
Hire a Data Scientist to Implement a Data-Driven Decision Making Culture
A study by Oxford Economics in April 2020 revealed a feeling of unpreparedness among small and medium-sized businesses across 19 countries. About half of the participants said that the pandemic caused a series of market disruptions and volatility that have affected their ability to service customers reliably, engage their employees authentically and build trust with partners. This may not surprise, but it is more telling how participants viewed their ability to access data-driven insights to help them achieve their digital transformation goals. Only 40% of respondents said that they had all the data necessary to support analytics-based decision-making. Small and medium businesses cannot offer personalized connections to customers because of gaps in data collection and analysis. According to 67% of respondents, this data shortage is giving larger companies a competitive advantage because they have more advanced analytics capabilities.
A data scientist is a specialist in business intelligence. They can help you create a business intelligence strategy that will meet your goals, increase profitability and drive success in today's digital world. They will first make sure that your data is in a good place to help you solve problems and grow your business. They will then create a technology architecture plan. This plan should be detailed and specific to your business. It will describe how your company will store its data. Most likely, it will be in a secure, scalable, and cost-effective cloud environment such as AWS or Azure.
It will include technology solutions that will ensure your company meets corporate governance requirements. Additionally, it will allow you to connect and share data across all departments of your organization with a wide range of analytical capabilities. The plan will include a data visualization layer that will enable you to quickly see your top performance metrics and accelerate your organization's decision-making to near or even real time.
Once this is in place, you and your data scientist will work together to develop processes within your organization that foster data-driven decision making culture. This will ensure that your company remains customer-centric without bias. They will ensure you are working with the correct data, based on specific goals or KPIs, and be able to identify trends and opportunities before they become obstacles to profitability. They will also use patterns to help develop strategies and activities that are beneficial for the company in many areas.
Although you might not agree with AI and predictive analysis, small and medium-sized companies should consider adopting these tools in the next few years. This is especially important as your competitors start to personalize customer interactions with AI-driven software and chatbots, and increase efficiency through robotic process automation. These technologies are being used by supply chain leaders in many industries to help them build customer-centric, strategically repositioned organizations. Leaders can go beyond the conventional ways of doing business to deliver resilient supply chains, greater levels of innovation, increased customer and employee satisfaction, as well as improvements in overall efficiency and financial growth.
Transform Your C-Suite into Digital Leaders
Our combined 60 years of experience have shown us that change is most difficult at the top. A strategic data scientist is a leader who can improve the return on investment in data and analytics. You will have success if you treat data and analytics like an asset, create business value, increase information sharing, and make sure that your organization's decision-making is data-driven. Your entire leadership team must support and align with them in order for these things to happen. They also need to be active partners in their success. Each of them will learn how to become an analytics-enabled digital leader throughout the process.
However, not all leaders are ready to be digital leaders. This simple chart illustrates the common strategic thinking processes of leaders today. It uses the 7 Ps of Marketing to create the comparison chart.
Today's top-performing leaders use the Ambidexterity Exercise Skills analysis. How can leaders position their businesses strategically? What do leaders of an analog business think about? What do leaders of a digital company think about PRODUCT? What product can we sell that makes the most profit? How can we create value to our customers? How can we see each of our businesses through a customer-centric lens and identify which analogs are worth exploring and which should be avoided? PRICE What price will customers pay? How does it compare with the competition? How can we create value for our ecosystem, and share it with our strategic business partners. Before we dive into this topic, let's first look at how our balance sheets change as we rethink strategy, culture, and talent to support a hybrid model. PROMOTION WHO is our customer? What message should we send? How can we reach them? How can we maximize network effects and bring value to the community? Before you dive in, ensure that value creation for customers is understood and the power and potential of strategic partnerships are clearly understood. This includes digital and analog customers, as well as identifying customers who value both. PLACE How do we sell our products or services? How can we scale up to reach the global market? Before you dive in, learn about value creation and how strategic partnerships can be used to build both digital and analog businesses. Also, identify the customers who are most likely to value each. What is the relevance of location and to whom? PEOPLE Which customer service model is best to meet the needs of our customers? How can our culture and talents be used to create lifetime value for our customers? What can we offer our community? Which skills and talents (either through recruitment or existing) are necessary for a sustainable hybrid business to succeed? What are our talent gaps? How can we fill these talent gaps? PROCESSES How do we create and deliver our products and/or services in a cost-efficient and efficient manner? What technical architecture plan, data strategy and experiences are necessary to create, capture and share value for our customers? How can we use our data to drive continuous innovation and improve the lives of both digital and analog businesses? PHYSICAL EVIDENCES What product does the customer get? What does our customer define as tangible and intangible? This is a hybrid business. How can we define it? HBR.org
Are your leaders primarily product-oriented, profit-driven, and aware of the external forces, especially those of their competition? Do you have digitally-savvy leaders who are customer-focused, focused on delivering value through technology and looking for business partners to help grow their ecosystem, especially against those who can offer more value than them? Are you able to have both an ambidextrous and a combination of both? You'll be able keep your core markets competitive while still winning in new areas by creating an ambidextrous culture within your leadership team. Our experience shows that a leadership team that includes both expertise areas is optimal.
It is worth taking the time to understand all these perspectives and how your company ranks on the chart. This can provide a guideline for how to start and improve your efforts to transform your company into a digital enterprise for your current and future success.
Small and medium-sized businesses have had a competitive advantage for generations through strong, loyal relationships that they have built with their customers. These relationships were built on a foundation of consistent, personalized service. These relationships provided valuable insights and business intelligence which allowed companies to improve their performance, add value, as well as stay ahead of their competitors. A key competitive advantage was our ability to execute strategic decisions quickly, something that larger competitors couldn't hope to match.
It is important to understand that digital competitors who use speed as a competitive advantage are disruptors by design. It could be disastrous for your business if you delay being disrupted. Do not wait to avoid this common trap and ensure your business's sustainability. Be deliberate about not delegating. You must take ownership of your transformation now, before anyone else does.
