Does having a website make you digital? Or fast broadband? The day-to-day running of your business probably depends on digital technology. However, it’s equally likely that your digital transformation is incomplete.
But what does it mean to transform digitally? Digital isn’t just about using social media platforms to grow your audience – it captures every aspect of your business. From tax returns to stock control, technology can optimise your daily operations and put you ahead of the competition.
According to Lloyds’ Bank Business Digital Index in 2017, almost one in four small UK business owners (1.6m) remain in the “digital slow lane” – failing to use technology to manage information, generate sales, engage with their community or use digital tools to solve problems.
But digital transformation is improving. Since the same index in 2014, twice as many small business owners have developed high digital capabilities to some degree.
Sectoral differences are important in understanding the knowledge gaps and delivering the right support to business owners. While a tech startup or IT services firm may have good understanding of GDPR and cyber security, for example, more traditional sectors are likely to be less digital. We are a nation of shopkeepers, after all.
We’ve taken a look at some of the areas micro business owners are yet to fully capitalise on digital opportunities, and how bigger companies are supporting the digital transformation.
Having an online presence is essential for every business, regardless of its sector, and even an outdated website could turn-off potential customers. Ensure your content is tailored to your audience and that your contact details can be easily found.
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Almost half of all micro business still don’t have a website, Office for National Statistics (ONS) figures have suggested, while the Digital Index found that some 118,000 UK firms do not use the internet whatsoever.
Tax and accounts
“The typical signs that we’re spending too long on business admin is when numbers from one document to another do not add up or are different,” Nayna McIntosh, CEO and founder of women’s fashion brand Hope, told us.
“This often happens when systems are not automated and means there is still an element of ‘hand cranking’ the numbers.”
With Making Tax Digital set to require all VAT-registered businesses to submit VAT returns electronically by 2019, now is a good time to switch to digital accounting software.
New research from the Confederation of British Industry (CBI) suggested that by adopting tried and tested technologies – such as cloud computing, mobile technology and e-purchasing – business owners could optimise their supply chain operations and generate an additional £100bn to the economy.
Greater adoption of technology is also linked to a company’s international success. According to Lloyd’s’ study, digitally-savvy small companies are 11 times more likely to trade overseas than those falling behind.
Hiring is another area ready to undergo a digital transformation. One report recently found that a majority of UK employers believe a shortage of digital talent within their company has seen them forfeit a competitive advantage.
Further data from LinkedIn revealed which digital roles are set to become the most important over the next two years.
- Information security/Privacy consultant
- Chief digital officer/Chief digital information officer
- Data architect
- Digital project manager
- Data engineer
Big helping small
When Business Advice asked lastminute.com founder Martha Lane Fox what it meant to “be digital”, the investor and entrepreneur outlined the common knowledge gaps that could prove vital in a small firm remaining competitive.
“It’s about understanding how different security might affect you, or being able to think about data protection in a way that’s helpful to your business. It’s also about ensuring you can use different social media platforms and are able to assess how automation might impact your industry in the coming years,” she explained.
Access to basic digital skills remains a crucial part of the puzzle, according to Lane Fox, adding that better productivity, growing exports and Britain’s economic success post-Brexit will help us gauge our digital understanding.
To help micro companies meet their digital ambitions, the entrepreneur is a firm believer in leveraging the expertise and resources of bigger counterparts. “Those are the kind of things that government and big business should be helping business owners with.”
So how can big business provide that digital backbone for smaller firms? When Virgin Media Business announced its Voom Fibre broadband specifically for small enterprises, it laid down a marker for competitors by offering connectivity up to four times faster than rival providers.
To support the digital transformation of Britain’s micro businesses, we’re inviting readers to assess their company’s own journey and the challenges ahead.
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