Dialpad CIO Prashanti Aduma says so much can be learnt from the Digital Transformation distinctions between start-ups and large enterprises.
Digital Transformation has been a buzzword in the business world for some time now. Unlike larger companies with multiple legacy systems to juggle, start-ups have often been faster to embrace modernizing and automating business processes.
More change is on the horizon, with an estimated US$3.4 trillion set to be spent by companies on new technologies by 2026.
The pandemic has been a catalyst for change and there has been significant digital acceleration in the past three years.
There are important distinctions between Digital Transformation in startups and large enterprises, but so much can be learnt from how each approaches Digital Transformation.
Due to legacy technology and the general complexity of larger organizations, large enterprises usually struggle to be agile.
Startups, on the other hand, typically choose a more agile and flexible approach when integrating advanced technologies because they are not burdened by the same legacy systems and organizational complexities.
In 2019, one in every 12 startups had AI based features in their goods or services; it’s likely this is much higher today. The adoption of cutting-edge technologies like Machine Learning or AI for a variety of applications, including process automation and predictive analytics, has been spearheaded by startups.
However, startups frequently work in unstable environments with intense competition and limited resources. To succeed and stand out, they must be agile and willing to take risks. On the flip side, despite having more resources and established customer bases, larger businesses may find it difficult to adjust to shifting market conditions because of their size and existing procedures.
The significance of developing a Digital Transformation culture where experimentation is rewarded is one key takeaway here. Any size business can benefit from this culture by remaining competitive and adjusting to changing customer needs. Due to their organizational setup, startups may have an advantage in fostering such a culture, but larger companies can also advance by adopting a more flexible and agile approach to innovation.
Digital Transformation requires organizations to consider long-term implications regardless of their size. Although large businesses may have access to a larger pool of resources like money, staff and IT infrastructure, their existing systems may make it challenging for them to integrate new technologies.
It is essential for them to be smart and strategic, carefully making long-term plans and adopting a collaborative approach to guarantee success.
However, despite their limited resources, startups can build a strong foundation for long-term growth and sustainability by utilizing their flexibility and agility. Startups can avoid short-term fixes by adopting a long-term perspective and by fostering an innovative culture, maintaining their competitiveness in a technological environment that is constantly changing. Collaboration within the company is essential for the success of Digital Transformation initiatives.
The limited resources that startups have is one of the biggest obstacles. Startups frequently operate on tight financial budgets and Digital Transformation can be an expensive process. Startups can focus on making the most of their limited resources by investing in scalable technology which can grow with the business.
Startups might lack the skills and knowledge required to successfully implement modern technologies. While the obvious solution is to train current employees or hire more with the right skillset, it’s often worth exploring access to experts in the technology you’re implementing. Providers of platforms and tools will have implementation and client success experts that can provide support on either a project or on an ongoing basis. Working with external organizations and professionals can also give insightful information and fill knowledge gaps, allowing startups to keep up with the most recent developments in digital technology.
Startups can also overcome this by fostering a culture of invention and experimentation that motivates everyone in the company to research cutting-edge concepts and tools. A phrase often used is ‘fail fast, fail often’ which essentially means quickly identifying what works, rather than persisting. But there is an important balance to be had. While this mindset is great for innovation, it can lead to a lack of focus.
Smaller businesses need to take a more thoughtful and intentional approach if they want to develop this culture. Rewarding outstanding initiatives, linking these to business objectives and making them evident throughout the organization is one practical strategy. Employee involvement and ownership can grow as a result, making them more receptive to change.
Also, startups can integrate innovation and experimentation into every role’s regular tasks. This can be accomplished by allocating time for staff to work on experimental projects and by giving them the tools and encouragement they require to create fresh concepts.
Startups can gain a lot from embracing digital, including scalability, greater efficiency, the capacity to reach a larger audience, improved teamwork, communication and customer experience.
While these advantages are also achievable by big enterprises, they can be particularly helpful for startups in terms of achieving rapid growth and successfully competing in the market. Companies that have embraced Digital Transformation have reported a 20–30% rise in consumer satisfaction and brand awareness, according to a McKinsey survey.
Analytics will be a key player for businesses to gather data on customer behavior and preferences, personalize their services and products and improve the customer experience by leveraging digital technologies. As customer service becomes an important area of automation. AI-powered chatbots can respond to customer inquiries, offer personalized support and streamline customer journeys to provide more time for businesses to focus their resources on more necessary tasks. The use of AI and Machine Learning can help this transformation further by predicting customer behavior and optimizing services.
For businesses to be more adaptable they must leverage data and digital technology to help meet customer expectations. Lots can be learnt from the way a startup may approach transformation, versus a large enterprise. Essentially, it’s about adopting the right technology, at the right time and not fearing change – because it can be required at a moment’s notice.
