The importance of digitalization for local businesses

Do you know the benefits of digitalization for local businesses? In this post, you will find out what it is, why it is important, and how to grow a small business with digital transformation.

The importance of digitalization for local businesses

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Are you looking for the best way to propel business innovation? You don’t need the big budget of large companies, as technology is able to level that field. A great example of this is the positive effect of bringing digitalization to local businesses.

Digitalization, also known as digital transformation, involves having your business processes use digital solutions to increase the quality and speed of your work.

This is possible due to all the progress technology has gone through in the last few years, which allows companies of any kind to benefit from it.

Like any fundamental change to the way a business works, digitalization needs to be done in a strategic way. This means understanding your needs, how the market evolves, and finding the best alternatives to provide more value to your customers.

Here is everything you will learn in this article:

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What is digital transformation?

The term digital transformation is used to refer to a process through which a business goes when technology becomes a priority in remodeling its way of functioning.

As more devices and tools become available, it becomes easier and faster to provide quality services and products to your clients. Therefore, digital transformation has a positive effect.

However, not all businesses believe in overhauling their processes with the help of technology. Those that resist digital transformation tend to see their customer base shrink as it becomes harder to provide value to them. The competition also becomes fierce, like other businesses. 

Digital transformation has a profoundly positive effect on businesses. That impact on performance and quality provides extra value to services, which translates into data such as these:

  • more than 40% of small businesses report consumer growth thanks to digital tools;
  • also, more than 70% of them report revenue growth due to digital transformation;
  • such growth is also responsible for those businesses creating twice as many jobs;
  • 90% of small businesses that use digital tools report that it has helped foster innovation;
  • businesses that work with digital transformation are also twice as profitable as those that do not.

Source: Deloitte

Why is digitalization important for local businesses?

By now, you probably have already understood that digital transformation is responsible for growth in all kinds and scales of businesses. However, it is important to clarify that it is not restricted to big companies.

In fact, small businesses tend to take the most value out of digital transformation and even level the competitive field with the bigger players.

Below are the most decisive reasons digitalization is important for local businesses.

Improve products and services

By investing in digital transformation, your products and services tend to improve exponentially. That is because new technologies allow you to offer more quality to your customers, who will gladly welcome such improvements and see your business more positively.

All this new quality might even give you new business opportunities, such as entering a new market, reaching new and old customers, and even adding to your existing products’ features.

Optimize processes

Does your business still perform tasks like it did 10 or even 20 years ago? As technology evolves, so should our processes. That way, you are able to work faster, smarter, and deliver more value to your customers.

Digital transformation helps with your process optimization by introducing tools especially tailored to your needs. You will be able to perform your tasks the best way possible by leaving all the heavy lifting to machines and software.

Decrease errors and mistakes

No business, big or small, is immune to mistakes. However, it’s important to employ the appropriate efforts to decrease them as much as possible. By working towards digitalization in your local business, you are able to reach this goal.

This is due to the fact that digital solutions help us double-check information and usually automate corrections. By relying on proper technology, you and your consumers will deal with much fewer errors in your operations.

Learn through data

Implementing a big infrastructure dedicated to gathering data and learning from it is no longer restricted to large businesses. Through digital transformation, information on your products, customers, and market becomes available to help you make better business decisions.

That is because the Big Data trend relies heavily on digital solutions. By concentrating your work on such tools, you are able to measure stats related to your activity and transactions. That is highly helpful for setting standards and trends.

Engage customers

Digital tools also help you provide new and exciting ways for your customers to engage with your business. This strategy is essential to keep those people interested in your brand and products while distancing yourself from your competitors.

State of Marketing Report 2024

This is done primarily through the use of interactivity tools like customer service. For example, you can offer a real-time chat solution to your clients so they can talk to a representative instead of having to use a traditional phone call.

Remain competitive

All markets evolve fast and businesses that are unable to grow tend to be left behind. In case digital transformation is still not a reality in your company, then you have a lot of catching up to do. Fortunately, making such a decision will help you remain competitive.

This even applies to bigger competitors. You don’t need a budget as big as theirs or even a consumer base as large, since digital transformation will help you improve your results nonetheless.

Provides much value for less

By considering the positive results you can get out of digitalization, it has a highly attractive cost-benefit rate. You simply need to choose the best solutions for what you need and implement digital transformation correctly in your business.

Technology can help you find new avenues of business, detect valuable opportunities within your own results, and even decrease the occurrence of errors. This combination will positively affect your investments and justify the costs of the upgrade.

How to grow a small business with digital transformation?

Planning to use digitalization for local businesses requires the appropriate strategy to obtain the desired quality results. By following the right steps, you can ensure the best approach and future-proof your business while considering the trends and how technology evolves over time.

Below, you can find a list of the most important tasks to implement digitalization for your local businesses.

Invest in technology

Digital transformation requires a commitment to technology. As it evolves, you might need to replace equipment and software to keep up with the changes and improve your results even further.

Such investment is not only of money but also of attention. You need to keep up with the trends and adapt your business as it shifts. The only thing that does not change is your goal: to always provide the best services and products to your consumers.

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Encourage collaboration

Implementing digitalization in your local business is not simply a matter of working with fancier machines and fully-featured software. This is all about allowing your staff to contribute to your success in a collaborative way.

By encouraging collaboration and using tools that help with that, you are able to work with better business opportunities and further improve your solutions. This will also allow you to find more innovative ways to work and reach your goals.

Integrate your IT assets

True digitalization for local businesses relies on integrating multiple systems to increase productivity and extend your opportunities for products and services. That is why you should always look for possible integrations between your software and equipment.

Luckily, integration is a cornerstone of digital transformation. By diving into this new world, you will certainly come into contact with utilities that connect with each other to provide further value to you and your customers. Keep an eye out and don’t miss out on those integrations.

Break down silos

Digital transformation can only truly develop when the borders separating your departments are torn down. In case your teams work like they are shut inside silos, you need to promote an integration-led process to them.

That is because the best solutions regarding technology might come from combining the knowledge and experience of people in different fields. Break down those silos and contribute towards a true integration for your staff members.

Involve every level of the organization

If you wish to bring your business to digital transformation, this needs to apply to everyone who works with you. Every department must go through a digitalization process and start enjoying the benefits of technology within their particular fields.

This will contribute positively to your whole business’ results as well as make it easier to keep improving in a global fashion. After all, a company is only truly innovating when all of its departments are evolving.

Considering the benefits of working with digitalization for local businesses, it becomes clear how positive this decision can be to your goals. Technology is a part of everyone’s lives and can make your work much easier and better, especially for your customers.

Take note of the tips in this article and being planning the digital transformation of your business right away.

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