Why digital transformation is easiest when you're still a small business

There's an insidious trap that many small business owners fall into when they hear the buzzword “digital transformation.” They often think this doesn't apply to me, I'm not big enough to pour expensive resources into new technology. This is the pitfall that many fall into who stumble with digital transformation: the belief that it's about technology.

Large companies use their size and purchasing power to hire data science teams, software and data engineers, tap into huge supplies of data, and purchase expensive software systems for managing and analyzing their data. And yet research shows that a growing percent of these companies are failing in their digital transformation efforts.

It's easier to understand why this is happening, and what the fix is, if you're still in the early stages of growing your business. This sounds controversial, because the notion of digital transformation that is predominantly being pushed falsely tells us that it's all about technology. This is often the technology that the average small business owner doesn't understand, can't afford to implement, and doesn't think is relevant to their company which isn't on the same scale as large corporations with their huge budgets and big data science teams and savvy IT departments.

The truth is, if you're a small business or just getting started, you've got a big advantage over the big players. You can start your digital transformation now, from the beginning, and get bigger, easier benefits than the large companies because of the scale of impact small but smart changes can have on your bottom line.

Going digital (opens in a new tab) really means wrapping your organizational head around new opportunities, and the best way to do that is to enlist the creative thinking of everyone on your team. It's about creativity and culture, recognizing and exploiting new business opportunities that derive from the combination of insights from data and new technologies. It's a lot easier to encourage that culture of brainstorming and insights into a small organization than a large one. You have the ability to educate your whole staff about the true nature of digital transformation and reap the benefits of a company-wide strategic and cultural effort — all because you're small enough to make this manageable.

Creative thinking about seeing new visions through data is where small business owners should get started. As a business leader, you don't have to know everything — certainly not the ins and outs of technology. What you bring to the table is knowledge of your business, understanding about your long-term mission and vision, and an enthusiasm for tapping into the domain expertise and creativity of your employees. If you preach the gospel of thinking what's possible if only you had the right insights to the kinds of data your company naturally generates and/or acquires, the culture you build of encouraging that thinking will bring you benefits that a simple, blind outlay of dollars for technology never will.

This is one of your biggest advantages as a small company: being able to instill a culture of data-driven creativity.

The other leverage you have have over larger companies is limited risk. As you identify sources of data and learn how to ask smart questions about how to better serve your customers, gain new ones, and develop product or service enhancements, you can experiment with a limited data infrastructure with minimal risk and huge reward. By starting small and focusing your efforts this way, you build better insights into your business and your customers, better knowledge of the infrastructure you want to build over time, and you bulk up institutional knowledge muscles that add to your digital transformation skills.

So what steps can you take as a small business looking to get started with digital transformation? Download our free list to find five practical, easy, ideas you can start implementing today.