Future proof or gradual decay: why digital innovation essential for SME survival

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SMEs are increasingly seeking out digital innovation to survive and facilitate business development. Many SMEs that have successfully operated with traditional business practices are now facing an unfamiliar world of eCommerce and IT automation.

This means digital innovation has emerged as the key to SME success in the evolving economic landscape, with automation crucial to successful business operations. Most SMEs have already turned to digital solutions to overcome barriers within the current business climate that restrict traditional commercial activities. Data from a recent survey of more than 1000 Australian SMEs revealed that, from 2020, many transformed their business models and, as a result, 44 per cent could reach new customers online and 15 per cent made a sale online for the first time.

Amazon’s Launchpad Innovation Report suggests SMEs that previously did not favour a digital-centric model have taken tentative steps into this world, and are now proceeding with gusto because of the potential business growth that digital innovation provides.

Many SMEs are now opting to prioritise expanding their digital presence to drive innovation, and revising business models to meet changing customer needs. Seventy-five per cent of SMEs are convinced online sales will help grow their business; however, they also recognise the need to acquire new resources and technology to achieve this.

Eighty-two per cent of the businesses surveyed agreed innovation would help grow their business over the next 12 months. The fact that many of their competitors are embracing automation makes it more important for SMEs to pursue their own digital transformation.

The technology exists for savvy SMEs to connect with people in new ways and provide products and services that enhance the customer experience. However, despite the increasing availability of digital opportunities, the landscape is filled with competing businesses, new audiences and varying levels of knowledge and experience. It is essential to establish the fundamentals of digital innovation to avoid being lost in an unfamiliar world with no prospect of success.

We have identified five steps that SMEs can take to capitalise on digital innovation:

1. Audit hardware and software: Embedding technology is the first step to digital innovation. SMEs must ensure they have the technology, connectivity and programs necessary to drive new digital activity. This may include updating online skills and knowledge for employees.

2. Review digital presence: SMEs should invest time in ensuring their website is up to date with the latest information in formats with high accessibility. This includes providing simple text, imagery, interactive features and calls to action that make it easier for customers to engage with the business. SMEs should also review company messaging, including where their brand may appear on partnering company websites.

3. Review digital marketing: Revise key messages to reflect the latest business objectives and values, and apply them across digital marketing opportunities. Digital marketing can be highly specific and targeted, reaching thousands of prospective new customers. Social media marketing (SMM), search engine optimisation (SEO), search engine marketing (SEM) and email marketing are key examples of digital marketing that can deliver a significant return on investment for SMBs.

4. Revise eCommerce capabilities: To remain competitive and meet changing customer service demands, consider introducing elements like real-time, customer-specific pricing, quick order and reorder/auto-replenishment, future online stock availability information, customer self-service and administration, and online chat and enquiry features.

5. Seek mentorship. The opportunities for digital business innovation are constantly evolving and may become obsolete before they can be mastered. Seeking out expert insight into new innovation opportunities is the difference between being at the forefront of business and industry innovation, or playing catch-up with competitors.

SMEs seeking to embrace digital innovation must do so with a clear understanding of where the return on investment will come from. Managing company expenditure carefully, with real-time insights into spend and budgets, is crucial for SMEs to avoid overspending. Implementing a cloud-based, automated spend management platform can contribute significantly to an SME’s ability to manage the synergy between digital and offline resources to future proof your business.