Considerations to start your digitalization as an SME
How can SMEs start digitalizing their business and benefit from digitally transformed workflows and tasks?
Digitally transforming manual, repetitive processes and tasks sound like a big, costly, and time-consuming project. And this can easily scare off some smaller businesses from grasping all the opportunities to automate workflows. But it does not have to be a massive and unmanageable process. SMEs can benefit significantly from digitalization as small- or medium-sized enterprises.
In this blog, we summarize the first step needed to answer the question at the top and let you know how to quickly get started and overcome the challenges that might unnecessarily hold you back.
YOUR ROLE IN THE FINANCE DEPARTMENT IS CHANGING
Let's start with how your role in the finance department is changing. When talking about SMEs and digitalization, you must ensure you can adapt to change. Knowing what skills you will require to be an asset to the finance department just a few years from now is essential. The finance function depends on someone good at analyzing data in the coming years. But also one who can visualize and communicate the data to the management.
Therefore, the significant change lies in how you, as a finance professional, should communicate the data you find. You will move from sharing what has happened to predicting what could and needs to happen. Finance professionals must talk to the whole business—other departments, employees, and managers— to determine how the financial team can create value.
One way to succeed is to talk to people about what you find in your financial data. Another way is to present financial data so that non-finance professionals can understand it. For example, you can move away from the classic column layouts in Excel and think more creatively about how you present your data to management. The challenge with Excel files is that the value of the numbers is not visual for anyone else but the creator, making it difficult to read. Your data should provide a clear overview that enables fast strategic decisions. Visual reporting tools like Power BI are one way to create an overview. Through predefined filters, slicing and dicing data, and a user-friendly interface, it is an easy way to get up to date with financial insights quickly. Much needed in SMEs.
INNOVATOR OR LAGGARD: WHICH ONE ARE YOU?
When discussing adopting and implementing new digital tools, it is also relevant to talk about how fast you are to adopt new technology.
On the graph below, you will see a curve divided into five segments.
The first segment is the Innovators. Innovators must try out the latest new technology before anyone else, whether it is thoroughly tested or flawless. Early adopters jump on board a new technology trend when the product is starting to get more prominent and used on the market, but it is still in the very early stages. The Early majority is one of the two most significant segments on the curve. Here the product has some references. It is still relatively new on the market but is tested and works. Then there is the Late Majority which is just as significant a segment as the early majority. The late majority adopts new technology when it is evident that the product works and is efficient. At the bottom of the curve, we find the Laggards. The people and businesses in this segment are the last to join the technology trend. They are the ones who are still not using smartphones, for instance.
If you find yourself to the right of the curve, you need to find a way to move closer to the middle or beyond. Because if not, then you are missing out on great opportunities while your competitors are outrunning you. So, if you or your business are in one of the last two segments on the curve, you need to push further to the left. You can do this by stepping out of your comfort zone and embracing new technology. Start slowly with smaller projects and move on once you feel comfortable.
COVID-19 EMPHASIZES THE NEED TO DIGITALIZE NOW
We are in a time where it is crucial to adapt to big changes quickly. Before the world pandemic, digitalization was moving along, but not every process was digitalized, and not everyone felt the need to digitalize their business. Now, digitalization is moving at an incredible speed. Since entire countries were locked down and we had to enable remote work, the need for online and digital tools has increased.
You can greatly benefit from automating manual tasks through online software as a small- or medium-sized enterprise. You can get far by taking small steps toward digital transformation. And don't hold back on digitalization because you think that:
- You don't have the needed IT skills in house
- You don't have time
- You don't have the financial resources
- You need to customize any solution before they add value
- You find it too hard to get a clear overview of the different systems on the market
- You have too many projects going on
These reasons should not hold you back. First, you don't need internal IT support with cloud tools. The cloud provider hosts and supports your software. Secondly, no customization is required, which is also why the cost is much lower. The software does not need to be customized to add value to the business. Often, you can find a great Saas/cloud product that will suit your needs and does not require in-house skills and maintenance.
So don't let assumptions like these act as a barrier to digitalization. The rest of the challenges are easy to overcome if you just take them one step at a time.
- Make a specific plan for where you want to begin and create different, smaller projects rather than one big project, which very quickly can seem unmanageable.
- Allocate some resources, especially time, to individual projects.
- Let your management know the need for digitalization and where to start in your finance department.
- Use some time to explore the possibilities. The market is full of free and inexpensive products that make the work easier for you and your team.
Would you like to know more about SMEs and digitalization or how to get started on digitalizing as a small- or medium-sized enterprise?
At Konsolidator, we are experts in financial consolidation and reporting. Thus, we created consolidation software to solve finance professionals' shared challenges. Our team consists of state-authorized accountants, auditors, and former CFOs, who have many years of experience in the finance landscape.
We have a strong passion for sharing our knowledge about the latest finance trends and, more importantly, how you can improve and optimize your finance department to live up to its full potential.
View our solution here.
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Konsolidator is a Scandinavian SaaS company that delivers a 100 % cloud-based consolidation tool.