Part 11 of the “Road to Digital Transformation” series
How does a small and midsize business compete with bigger players? That’s the million-dollar question for growing companies worldwide. Latin American organizations are certainly not the exception.
Taking advantage of new opportunities from the digital economy is key. According to a previous IDC research, commissioned by SAP, 61% of high-growth companies (those with annual revenue growth of 10% or more) said that technology “levels the playing field” for small and midsize businesses versus larger corporations. In addition, 65% of these high-growth companies worldwide believe that their active participation in the digital economy will be essential to their company’s survival within the next five years.
However, the latest IDC research outlined in “The Next Steps in Digital Transformation: How Small and Midsize Companies Are Applying Technology to Meet Key Business Goals with Insights for Latin America,” only 31% of Latin American small and midsize companies believe that they are well underway or have gone beyond using technology to do business in the digital economy. Meanwhile, 38% have done little or are just in the beginning stages of their digital maturity.
To remain competitive at both a global and local level, Latin American firms need to prioritize technology adaptation to improve internal efficiency and external engagement.
Source: “The Next Steps in Digital Transformation: How Small and Midsize Companies Are Applying Technology to Meet Key Business Goals with Insights for Latin America,” IDC InfoBrief, sponsored by SAP, 2017.
Holistic integration: A critical element of a firm’s path to digital transformation
Worldwide, the IDC study found that most small and midsize companies invest in technology “where the need is greatest, and the return is quickest” and identified customer acquisition as the top priority. Latin American companies also cited reducing costs and expenses as well as increasing revenue and efficiency as additional priorities. However, acquiring customers and saving money is not enough to grow and expand a business.
“Digital transformation is a journey, not a destination,” the IDC study concludes. And I couldn’t agree more with that observation. In the digital economy, it is important to think holistically and long-term when consolidating solutions and applications to drive efficiency, profitability, and of course, improvement in the customer experience.
For example, the IDC research confirms that most firms are investing heavily or already using a Big Data or analytics solution. But collecting and analyzing data is just one piece of the puzzle. To succeed in the digital economy, companies need to provide all decision makers – their employees, partners, and customers – with access to critical business data and insights from different a variety of applications and solutions.
A clear connection between business success and technology engagement
A little over a year ago, business owners and IT leaders were talking about digital transformation as a way of staying competitive. Today, they need to go beyond those discussions and reinvent the way they do business. Every day, it seems that at least one new business model enters the market with the potential to disrupt entire industries.
From this perspective, there is a clear connection between business success and technology engagement. Faster-growing firms worldwide are particularly ambitious in identifying multiple business priorities that go beyond customer acquisition and include driving revenue growth and improving productivity.
Latin American small and midsize businesses need to jump on the opportunity to become a Live Business by integrating solutions and gaining insights across their entire operation. By operating on one platform to reduce costs, gain efficiency, build market share, and attract and retain talent, firms can level the playing field to compete with larger organizations and, ultimately, win in this new reality.
To learn how small and midsize businesses across Latin America are digitally transforming themselves to advance their future success, check out the IDC InfoBrief “The Next Steps in Digital Transformation: How Small and Midsize Companies Are Applying Technology to Meet Key Business Goals with Insights for Latin America,” sponsored by SAP. For more region-specific perspectives on digital transformation, be sure to check every Tuesday for new installments to our blog series “The Road to Digital Transformation.”