Start-ups and innovation

SME digitalization: The ultimate guide

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Everyone is talking about digitalization. It affects private individuals as well as companies and is the subject of much debate. And not without reason: Digital technologies create new business models and offer the potential to automate complex business processes, tap into new customer segments and increase customer loyalty.

However, digital transformation at an SME doesn’t happen overnight. Developing into an SME 4.0 is a multi-step process and must be adjusted to the individual circumstances of the company concerned. Read here which opportunities you have, what you should bear in mind in the digitalization of your SME, and how to avoid common mistakes.

Digitalization for SMEs  – What is that?

Digitalization is very important for Swiss SMEs It allows business processes to be made more efficient and new business areas to be explored. The latest studies show that SMEs that go through a digital transformation are more competitive. They can react more quickly to market changes and better adjust their products and services to the needs of their customers.

But digitalization is not without its challenges. It requires investments, both in terms of technology and training for employees. That's why it’s important for SMEs to develop a clear strategy for their digital transformation.

Digitalization: The challenges and opportunities

As always: Change entails opportunities and challenges. One important challenge with regard to digital transformation is that companies need to make the necessary resources available and have the relevant know-how at their disposal. With small enterprises, in particular, this can present a major hurdle.

But it’s worth it. The opportunities include automated and more efficient processes, innovative strength, and cost savings. And for those who want more, digitalization can help position the company as a more attractive employer. With flexible work models and digital communication tools, your employees can perform their work from anywhere and with work flexible hours.

Despite the numerous opportunities that digitalization offers, SMEs should not underestimate the challenges. These include, for example, issues with IT security, data protection, and adjustments in the company cultures to digital changes. To master these challenges, it is important to develop a clear digital strategy. You should also remember to involve your employees in the change process.

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What opportunities does digitalization offer for SMEs?

Digitalization offers SMEs countless possibilities. We have summarized the five most important areas for you:

Increase your efficiency through automated processes

Digitalization offers SMEs enormous opportunities to increase their efficiency. Through the use of modern technologies, processes can be automated and accelerated. This saves time and on costs.

Whether bookkeeping, ordering systems, or customer service – nearly every area can be optimized through digitalization. Although introducing such systems requires investments initially, they lead to savings that more than compensate for the investments in the long term.

However, it is important that you involve your employees in the implementation process, build up the the required capabilities, and integrate them into the new processes. Only if every one pulls together can digitalization be successful.

Improve your customers’ experience

Companies strive to create a “magic moment”: Moments that touch or move potential customers – ideally to buy their products.

However, the supposed “magic moment” is often perceived by interested visitors as a “tragic moment”. Confusing websites, important information that can only be found through Sherlock Holmes’ investigative instincts, or complicated information and ordering processes.

To avoid this, you should know your target group and their needs and continuously improve the customer experience. Learn as an SME what moves your customers and reach them at the right moment. Find out why they haven't purchased anything or contacted you. In general, try to identify the needs of your users and meet them as best possible.

Check cloud computing for saving your data

Cloud computing is an important aspect of digitalization for SMEs. It allows for the use of IT resources on the Internet, which can save costs and time. Imagine you can access software, memory, and processing power whenever you need it without having to invest in expensive hardware.

In addition, cloud computing also offers the possibility of responding flexibly to changes. You can add or delete services depending on what your company needs at the time. Whether data security, scalability, or cost savings – cloud computing can be the key to the digitalization of your SME.

And last but not least: Cloud computing solutions such as Microsoft Sharepoint or Google Drive also allow for several people to work on a document at the same time.

Being present online: E-commerce and online marketing

Especially in the areas of e-commerce and online marketing, there are many possibilities. By building up an online shop, products and services can be sold to your customers more easily and efficiently. Online marketing strategies, such as SEO and social media, can increase the visibility of your company and appeal to more customers.

But please note that digital channels are often filled with content as the SME and its employees see fit. But this is not necessarily the same view as its customers. “We should put that on the website too” is a statement commonly heard. Products, services, and endless discounts are then integrated into the pages.

This is understandable. The company wants to ensure that customers are aware of their entire range of services, are impressed, and ultimately convinced. But what is well intentioned often turns out to be too much: Users can’t decide. Take the decision away from interested visitors to your website. Put the focus on the most popular products. This is how you boost your sales without praising products that don’t sell well anyway.

The same applies to e-commerce as to classic sales: You first have to build up trust and your offer must fit with the needs of your customers. Customers on the web initially buy simple and cheap products. If everything works properly, then nothing stands in the way of another purchase – and you will gain customers who are happy to return. With this in mind: Start by looking at your website and your online shop through the eyes of your customers, employees, and business partners – and take measures to optimize these channels with them in mind. And be sure that the online world functions at a quicker pace: Customers are used to getting a professional answer within a short period of time.

Invest in data analysis and business intelligence

Data is the new gold. But if gold isn’t processed and refined properly, it isn’t worth much either. Through digital transformation, companies now have thousands of digital reports from analytics tools and endless data from users which is available in both a structured and unstructured form. You know a lot about your customers. But do they really feel an advantage from that? Companies should do an about-face: Consider first exactly what their goal is and then get the data, data tools, and business intelligence technologies required to reach that goal.

Another important point:  Use the gathered date to create an advantage for your customers by optimizing your offer, for example, in such a way that it best fits the current needs of your users, with the key word here being relationship management. This way you pique interest and create trust in your service – and only through mutual trust can a stable and long-term relationship grow.

Keep in mind: Big data can be uncanny. As mentioned, personalized ads can bring about the opposite of the intended enthusiasm. Make sure that your users don’t get the feeling that they are being followed or that you know too much about them. Steer the focus away from “big data” in the direction of “right data.” You don’t need to know your customers’ shoe size or allergies to sell them a vacuum. The goal is to present useful offers to those who are interested – not to make a creepy impression.

The next time you receive a Google Analytics report, ask yourself what you are doing with the data you have and what the next steps are. The goal is to optimize the processes for services and sales based on the data obtained. Don’t gather any data for the sake of it being “good to know” – only gather data that is promising.

SME digitalization: How do I do this?

Implementing digitalization in an SME is an important step to optimizing business processes. Start by identifying areas which could profit from digital solutions, such as customer service, production, or administration. Invest in modern technologies to increase efficiency and cut costs. Introducing cloud computing, artificial intelligence, or big data are just a few examples.

It is also important to involve all employees in the process and that they receive the right training. Remember that digitalization is an ongoing process requiring constant adjustments. You should therefore be sure to always stay up to date with the newest technologies and trends.

Digitalize step by step

The possibilities of digitalization can seem overwhelming at first. But as is so often the case in other areas: You don’t need to manage everything at once.

First analyze the situation and identify the areas in which digital technologies could offer added value. Create a plan accordingly to implement these technologies. This can entail the introduction of cloud computing or the use of data analyses, for example.

Realize your plans in small steps. This way you minimize risks and increase acceptance among your employees. Continuous training and support are essential to ensure that all employees can use the new tools effectively.

It is also important to monitor the progress and amend your plan if necessary.

Choose the right solutions and partners

No, there is no sense in wanting to do everything on your own. It is all the more decisive to choose the right solutions and partners in digitalizing your SME.

After you have decided which steps you want to take first, it is important to consider which capabilities are already available for the transformation. And which capabilities you still need to get on board. It can be advisable to work together with external partners.

Consider well which partner is a good fit for you. Often people make the mistake of choosing the partner with the most comprehensive offer. But do you even really need that?

Take time to assess the different options you have. You should consider factors such as costs, functionality, and the adaptability of the solutions. During the selection process, take account of the partner’s experience, expertise, and reliability. An experienced partner can guide you through the complex digitalization process and help you find the best solutions for your company. Young companies often think in more unconventional terms and may find totally different solutions. The right choice can make your company more efficient and create a competitive advantage for you.

Train your employees

Employee training is a decisive aspect of digitalization in an SME. It is essential that your employees acquire the necessary digital skills to keep up with technological developments.

Training and workshops can be very helpful in this regard. Make sure that your company lives a culture of lifelong learning. This way you can ensure that your team is always at the cutting edge of development and your company stays competitive in the digital age.

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What are the success factors for digitalization in SMEs?

The most important success factors for digitalization in small and medium-sized enterprises are:

  1. Strategic planning: A clear digital strategy is crucial for success. It must account for the company’s goals and be tailored to the its specific needs.
  2. Leadership: Strong leadership is required to guide through the change process and to motivate the team to take the planned path together.
  3. Adaptability: SMEs must be flexible and able to adapt quickly to change. The digitalization of SMEs requires constant adaptation and optimization of business processes. This is an opportunity to create more efficient processes and cut costs.
  4. Data protection: The most mundane topic in the list can put a spoke in the wheel of your digitalization plans. Make sure that you can also count on the right expertise when it comes to data protection. Whether it comes to protecting your own data or being compliant with data protection law.
  5. Technology: Choosing the right technology can make the digitalization process considerably easier.
  6. Education and training: Employees must have the ability to handle new technologies.

Best practices and success stories of digitalized SMEs

Online shop for GNL Footwear

GNL Footwear develops shoes that have soles that cushion in all directions. The inventor, Jürg Braunschweiler, originally wanted to sell the patent for it. As no one was interested in the patent, he built up his own shoe brand together with his son Eric. GNL Footwear was born, a brand that focuses primarily on lifestyle shoes with a classic design. Since it proved difficult to be accepted into specialist retail, GNL made a virtue of necessity and opened its own online shop – in cooperation with the start-up “Shoe Size Me” – which recommends the right GNL shoe size based on well known brands and their sizes.

Digitalized storage system of Resoplan

For over 30 years, Resoplan GmbH has operated in the area of supply chain management. For example, with a warehouse concept for the work yard of a small Swiss city. “Here it’s not about fully automatic access to a warehouse,” explains Erich Schmid, founder of Resoplan. “But the question arises about which material needs to be at hand when and how quickly.” Resoplan thus works on concepts for which material is on site and which is stored away. The material is entered in a system so that you can recognize when repairs and procurement are required. All of this makes work more efficient and the work yard employees can focus on their original task.

Both examples were originally described for the AXA customer magazine “My Company”. 

Are you ready to get your company digitalized?

Digitalization plays a decisive role for Swiss SMEs. These companies have the challenge not only of optimizing their business processes, but also accessing new market opportunities and strengthening their competitiveness. This comprehensive transformation process requires strategic foresight, individually adapted solutions, and continuous training of employees.

In this context, numerous opportunities arise through digital transformation. During this time, focus is placed on automating processes in order not only to save time, but also on costs. Likewise, a targeted approach to customers and avoiding "tragic moments" are crucial for ensuring long-term customer retention. Cloud computing is an important key for efficient data management and being able to adapt flexibly to change.

However, it is important not only to keep an eye on the company perspective, but also on the needs of your customers. When using digital channels you should make sure that you don’t only act from a company perspective.

This view makes clear that digitalization for SMEs means more than only adapting to technology. It is a comprehensive process that includes the company strategy, employees, and the way in which transactions are settled. Only with careful planning, adaptability, and continuous innovation can the opportunities of digitalization be used to the fullest extent possible.

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