Digitalization – Understanding the Benefits for SMEs

The pandemic has forced businesses to face and navigate a host of challenges like never before, but it has also accelerated digital transformation and provided an array of opportunities to thrive. 

By Patrick Schaudel, SVP IONOS Products at IONOS

Here, Patrick Schaudel, SVP IONOS Products at IONOS, highlights the recent research the business has conducted looking at the impact of COVID-19 on digitalization, and shares his tips on how SMEs can efficiently and practically start their own digitalization journey. 

The impact of COVID-19 on digitalization  

The SME sector is hugely important to economies around the world. With normality – and hopefully recovery from the pandemic -in sight, it is more important than ever for SMEs to stand-out from competitors, be as effective and successful as possible, and help support the country’s economic revival. 

digitalization plays an important part in the road to doing that, allowing small businesses to compete with larger organizations in an increasingly digital world. The tools and technology available now can help reduce costs, improve efficiencies and increase exposure. Certainly, the pandemic has accelerated this transformation, but businesses have to understand the benefits and how digitalization can complement the business practices already in place to really make it effective.  

At IONOS, we recently commissioned research* of more than 1,000 UK SMEs, exploring the impact of COVID-19 on digitalization efforts and how businesses have transformed themselves. We found some interesting results, including efforts that have been fast-tracked or implemented because of the pandemic, and attitudes towards the topic in general.

Encouragingly the results found that in total 63% of UK SMEs believe COVID-19 has strongly (34%) or very strongly (29%) impacted their company’s digitalization.

Of those that have taken measures towards digitalization during the pandemic, almost one in four (39%) SMEs said it has helped them win new customers. 64% of respondents said they have even received positive feedback because of the changes they’ve made, with almost three quarters (74%) feeling better prepared for future crises because of the technology they have put in place.

One of the most important goals of digitalization is to create easy-to-use methods to collect and share data. Not only is this about storing data properly, but about handling communication with customers and staff as efficiently as possible. 

Therefore, it’s unsurprising to see that solutions that facilitate digital communication have increased in demand as a result of the coronavirus, with one third (33%) of the survey respondents making greater use of collaboration tools such as Google Workspace or Microsoft 365 due to the pandemic. In addition, 17% of SMEs actually began sharing email communications and digital newsletters during the pandemic to help keep current and potential customers better informed of their activities during this turbulent time.

Interestingly though, 22% of UK SMEs don’t believe digitalization is required for their company, despite its known benefits of creating efficiencies, increasing revenue and helping reach a wider audience base. This shows a real gap in knowledge of the benefits for these businesses, and by not having a digital identity, businesses are effectively limiting themselves as consumers will not be able to access what they have to offer. 

It’s understandable that some SMEs haven’t been able to give thought to the benefits of digitalization while navigating an unforeseen pandemic, managing evolving rules and legislation from government, furloughing staff, or keeping revenues up by offering new products or pivoting business models.  

However, SMEs that have digitalized have clearly seen the benefits from doing so. Therefore, understanding how digitalization can benefit a business could be the difference between surviving and thriving during these transformative times.  

How to make digitalization work for your business 

Digitalizationis a broad term and there are many tools with different advantages that can improve efficiency, boost sales and drive attention to your business. Deciding on specifically what to focus on may seem overwhelming but there are several core elements that can be the key to getting started. 

Enhance your online presence 

In a world of digitally driven consumers, it is more important than ever to have a professional online presence to showcase products or services, and ensuring online visibility is the best place to start. 

It sounds basic, but the first step to this is placing businesses details everywhere and anywhere a customer should be able to find you – for example online directories to help a company be easily found via search engines. When developing a website, hosting service providers often offer local listing services that actually facilitate maintenance and synchronize the businesses content on all platforms.

Next is to make sure you have a website in place. There are many cost-efficient ways of developing simple and easy to manage websites. Website builders can be the perfect tool to create fully customizable websites without the technical knowledge. They provide a ‘toolkit’ of options to select from, like a theme and layout, where the business inputs the necessary brand information for each webpage. They also feature a responsive design, which means that the site will automatically edit and adapt so it looks and performs well on desktop or mobile. If the thought of managing this seems overwhelming, then consider having professionals manage the design and maintenance. 

This well-crafted website can become a ‘go to’ hub for customers, communicating helpful information and promoting products and services to further drive awareness of the business.

If a website already exists but there’s a greater need to integrate products or services, then this is possible with the help of special e-commerce solutions, eliminating the need to create a separate online store. This works with any content management system such as WordPress, Joomla! or Wix, and can be integrated with social channels, like Facebook or Instagram, for a truly seamless online experience.       

Project management and communication tools 

Tools for internal and external communication can be easily integrated into daily business routines and are a vital step for digital business success. Cloud storage and collaboration tools, such as Microsoft 365 or Google Workspace will help you simplify your management of tasks and allow for more flexible working. The Cloud can allow anybody from the business to access and share files with ease, using ‘permissions’ to help keep data secure. The accumulated time saved on simple communication can be used for much more important business tasks.

Customer data and relationship management 

When it comes to gaining and storing customer data, as well as managing customer relations, CRM (customer relationship management) tools have established themselves in larger corporations, but can also benefit SMEs. These tools provide the perfect basis for collecting customer data securely as well as providing the ability to develop and manage other digital content like newsletters, targeted advertising on social media or ensuring the business website is reaching the right audiences. 

CRM tools also provide the ideal platform for developing strategies for communicating with customers across different business units, allowing for internal teams to be easily updated through one central system.

Additionally, there are tools that support managing customer relations that should be considered. Chatbots, for example, can be used as the first point of contact between the business and customer to help answer frequently asked questions and reaffirm purchasing decisions.

The case for digitalization

The pandemic has shifted businesses into the online world like never before, and with customers becoming more digitally savvy, they expect the same from the business, shops and services providers they interact and spend their money with. Not having a digital identity limits a business, not only in terms of accessing customers but with efficiently running the business as well. 

By planning a digital transformation journey, and taking the first steps to improve a business by putting in place simple but effective digitalization tools, SMEs can help future-proof their offering and build resilience for years to come.

Patrick Schaudel has many years of experience in the IT and software industry and is a proven expert for cloud-solutions, e-business and online marketing. As SVP IONOS Products, he is responsible for the entire portfolio for the digital success of companies of all sizes as well as the public sector.

His previous positions include working as a direct marketing specialist and as a product and marketing manager for a digital media group. He started his career at a large creative agency.

*Online survey by YouGov on behalf of IONOS, in which 1,003 people from companies up to 250 employees participated between 14 and 17 January 2021.