SMEs are utilizing cutting-edge technologies such as DevOps, Automation, Artificial Intelligence, Machine Learning, etc to remain competitive, nimble, and create more customer value at a much quicker pace. The benefits of investing in such technologies are available in abundance.
As per research by IDC, the ongoing crisis has advanced digital transformation for over 70% of the SMEs. While most businesses have started their transformation journeys, only 24% are in the most advanced stages, with 4% in the digital native stage. 26% of the businesses are still in reactive mode, with no or minimal efforts towards digital transformation.
SMEs are transitioning from start-up to scale-up mode for digital transformation programs. These businesses have inherent advantages of flat hierarchies, better leadership visibility, and quick decisiveness giving them fleetness. But they lack digital skills, have budget constraints, and resistant to culture change. Along with these challenges, their existing digital roadmaps require adaptation to changing customers’ needs.
SMEs helmed by courageous executives and an insatiable appetite for innovation is well-prepared to take over the future and build resilient business models. The right technology partner will help overcome challenges & constraints and enable them on the path towards Continuous Innovation.
At Qentelli, our liquid workforce (highly agile and adaptable to changing business scenarios) delivers business objectives by aligning and optimizing technological efforts in the right direction. We ensure our clients’ success by going beyond technology adoption and changing the internal fabric of the organization, enabling deep-rooted people, processes, and cultural changes.
This article talks about how SMEs can overcome scaling challenges by partnering with the right digital transformation services firm.
Shortage of digital skills and talent
Building digital businesses require a digitally skilled workforce. According to the World Economic Forum, the new division of labor between humans, machines, and algorithms will create ~133 million new roles by 2022. With the new roles and the shortage of quality people, there will be intense competition in acquiring the right digital workforce. The democratization of technologies has given exceptional capabilities to every organization, and the only differentiator is a digitally advanced workforce. A combination of technical and business skills like programming and app development, creative thinking, problem-solving, and negotiating will dominate the SMEs' talent demands.
SMEs can overcome talent constraints by-
- Reskilling and Upskilling existing workforce
- Co-Creation & Development Model (Develop the product ‘with the client’ instead ‘for the client’)
- Outsource Digital Initiatives.
Reskilling and Upskilling can go hand in hand with the other two approaches. With the combined approach, SMEs can leverage new technologies while continuing legacy operations. The right technological partner brings the capabilities of a liquid workforce to address new business demands and the existing workforce can ‘keep the lights on’.
Our liquid workforce operates as a geographically distributed team to help clients realize the true value of investments. We adjust our workforce based on business needs and project requirements. The outsourcing model presents significant talent and cost benefits, but organizations should ensure quality from their outsourced technology partner.
Cultural resistance to change
As teams continue to grow and partner, it is important to sustain and evolve culture. Resistance towards change is normal. Effective communication is the key to overcoming this resistance.
Culture evolution takes a robust plan to drive the entire organization towards one common vision. The two-way communication and new ways of working have to be there. Leaders should establish a clear line of sight to the value that they are going to create for employees, customers, and other shareholders.
Two, it requires a lead by example approach bringing employees together to achieve business goals using improved processes.
SMEs are strategically positioned to introduce agility with flatter hierarchies, organization-wide visibility of leadership, and strong cross-team interactions. Choosing a suitable communication mode will encourage active participation from employees at each level.
Digital Transformation–What to Communicate?
Put communication machinery in place for educating, communicating, and receiving feedback from employees.
Communicate ‘North Star’
Communicate why the organization is undergoing the future-shaping shift and set the tone from the top. Read more about Communicating North Star.
People, Process, and Technology
Communicate about hiring and reskilling plans, processes to pause and scale with timelines. Decide technologies and adoption plans for employees. Define the most critical elements in the organization to solve these needs.
Communicate how the future of business will look like. Use visualization techniques to present positive changes.
Fail Fast, Learn Faster
Encourage employees to learn from current failures and use them as a base to innovate continuously.
Lack of Budget and Commitment
The profit-driven scaling efforts can make a lasting difference for budget pressed SMEs. The conversation shifted long ago from ‘cost-center’ to ‘innovation- and profit-center’. SMEs should move from the traditional technology management approach to a profit-driven approach that operates as a business within the business. Responsible teams should show tangible numbers to justify the spending within the defined timelines. This increases leadership commitment towards scaling efforts with dedicated budgets.
We bring 100+ years of team experience to restructure IT and technical projects for cost optimization and high performance. This sharpens focus on realizing profits from technical investments by accurately monitoring and measuring the business value it delivers. As a result, businesses stay firm on their commitment and cost for scaling the digital transformation plans.
Towards Cost-Efficient Digital Transformation Plan
Set Strategy And Governance
Create a strong and central IT governance. Align changing technology strategy with the business strategy.
Centralize, Simplify, & Consolidate
Simplify the IT environment (cloud and virtualization) reducing overall OpEx.
Outsource application development, maintenance, and up-gradation initiatives. Work with a technology partner to source the appropriate technologies.
Increase the cloud footprint for business applications. Evaluate, migrate, and operate apps on the Cloud aka Lift and Shift Strategy.
Create self-service capabilities for application development and internal IT teams using DevOps.
Establish a business case with financial details for every investment.
Lack of a Digital Roadmap aligned to Businesses
SMEs want to scale transformation efforts around the strategic themes of customer experience, better supply chains, increasing automation capabilities, and infusing cutting-edge technologies into the systems. To achieve this, they need lean business capabilities, modern microlithic platforms, agile teams, and a continuous delivery approach.
Doing everything in-house takes the focus away from core business functions. That’s where a strategic partner can help in creating and implementing a proper digital roadmap for exponential business outcomes.
At Qentelli, we frame a robust multi-year digital plan visualizing how our client’s future business will look like. The digital plan entails quick-win areas and layer-by-layer analysis of complex areas needing transformation. It includes–Objectives, Strategies and Organization, Processes and Governance, Technology, People, and Skills.
Where Do You Stand in Your Digital Journey?
- Reactive organization. None or siloed digital efforts.
- Manual processes with no unified standards across the organization.
- Lack of standard cloud platform. Working with legacy technologies.
- Risk-averse leadership. Lack of digital skills.
- Tactical digital efforts. Disconnected digital initiatives.
- Few automated processes. Struggling with costs, digital skills, and technologies.
- Limited cloud investments. Focused on outdated business reporting tools.
- Lack of digital leadership. Imprudent investments in digital talent.
- A documented digital strategy with a backlog of digital initiatives.
- Costs-optimized automation. Looking to scale automation and identify more opportunities.
- Using the cloud, agile, and other technologies.
- Technical leadership. Organized efforts in communicating digital plans.
- Leading the curve with holistic, long-term strategy and investments.
- Fully automated and mature processes. Receptive to AI/ML technologies.
- Significant strides are made in cloud and analytics adoption. Matured modern delivery practices.
- Proactive leadership. Digital talent and skills exist. Agile and adaptable culture.
The digital transformation journey is unique for every company. Based on the objectives and how far they are on the maturity index, organizations must re-assess technical capabilities to scale digital plans. The detailed assessment can uncover opportunities in these areas:
- Running and optimizing the current processes – Drive efficiencies in the existing business model, faster time to market for current offerings, and improved supply chain.
- Transforming the existing processes, products / services – Moving from legacy technologies to the cloud, re-writing existing applications, app modernization, and enhancing existing value stream.
- Growing your business – Infusing new technologies and capabilities like DevOps and Agile in application development and offering improved solutions to customers. Determining avenues for vertical or horizontal growth.
Lack of necessary technologies
SMEs are using technologies to outpace the competition but unable to realize the full potential. The reasons are lack of expertise to address the integration challenges of legacy and modern systems, reaching plateau stages for Agile and DevOps, and unable to exploit the full potential of Cloud, AI, ML, Big Data, and Analytics.
As SMEs move ahead in their journey, their CIOs are tasked to execute two parallel initiatives at the same speed: running legacy systems and introducing new technologies for scaling transformation. Qentelli’s digital expertise augments CIO’s capabilities to orchestrate the right mix of technologies.
The New Digital Agenda for CIOs
Building new digital POCs to transform existing legacy systems into modern applications and deliver value to customers at a much quicker pace.
Cloud Migration and Virtualization
Collaborating with vendors to analyze cloud-readiness and migrate applications to cloud, XaaS and other virtualized services.
Using DevOps and CI-CD to deploy products and services. Championing the process and cultural transformations to achieve performance over perfectionism.
Include the digital workforce in on-going initiatives by partnering with the right technological partner. Shift focus from traditional to remote-first teams.
Quality Engineering (QE)
Adapting to the new QE practices that are pervasive, real-time, data-driven, and augmented by AI/ML frameworks.
Let’s Scale Up!
SMEs contribute approximately half towards global GDP and employs two-thirds of the workforce. Their transformation is a high-stake venture for the global economy and the associated ecosystem. Adding the pandemic to the ever-evolving tech scenario, scaling their digital efforts is not an option but a survival necessity to ensure business continuity and growth. It is the right time for leaders to broaden the transformation across the enterprise.
At Qentelli, we draw our lessons from the client’s business models and on-going transformation with a change in context. We build a plan on these lessons by understanding business and creating lighthouse projects to start and then scale them. This allows showcasing approach and benefits to decide on scaling-up. The result is highly scalable transformation programs. Let Qentelli partner with you. Talk to us: firstname.lastname@example.org