Digital Transformation: A communication challenge for medium-sized businesses

By Sabine Dedering, Regional Sales Director at Dell Technologies South Africa

When it comes to digital transformation, one size does not fit all. Scale, structure and industry all impact the transformational needs of a business – and while the term conjures visions of sleek tech giants and winning cloud players, the reality is much more diverse. In the medium-sized business market, there are some common challenges that must be overcome before reaching for the cloud. They need to talk the talk, as well as walk the walk.

In the grand scheme of things, medium-sized businesses are not all that different from larger businesses. Both are seeking transformations in order to remain competitive. Business managers are fighting to justify the value of digital transformation with finance teams. Hence, a communication strategy is key in order to help them win over employees and introduce the possibilities presented by data-driven transformations.

Evolving in the digital era

This communication challenge might come as a surprise to some, considering the digital transformation market is projected to grow from $290.0 billion in 2018 to USD $665.0 billion by 2023, at a CAGR of 18 percent during this period. This growth is being driven by changes in customer preferences and the optimisation of business efficiencies. The rapid proliferation of mobile devices and apps, along with the adoption of IoT and cloud technologies, are also obvious catalysts for transformation.

The benefits of technological evolution range between greater resource management, improved employee empowerment, and better customer insights and experiences. However, a powerful driver for businesses is the potential cost savings. The Cloud Industry Forum found that 72 percent of survey respondents from the IT side of business felt cost savings were a key driver, compared to 68 percent from the business side. They’re in virtual agreement. Put into context, according The Hackett Group, digital transformation can enable 42 percent cost savings for Finance organisations, for example. So, where exactly do the communication challenges lie for medium-sized businesses?

The challenge for medium-sized businesses

Firstly, it’s important to note that while smaller businesses are more agile and larger businesses often have bigger corporations behind them – medium-sized businesses tend to be managed from their owner’s pockets. This raises the stakes and applies a certain pressure not necessarily experienced by other businesses. Finance options for medium-size businesses require a clear demonstration of how transformation strategies do much more than keep the lights on. Those strategies must generate measurable business benefits: create new customers or revenue streams, lower costs, and increase output and quality to mitigate security and business risks.

Being able to justify the financial investments required to kick-start company-wide digital change – and highlight the impact of agility – is a unique challenge to medium-sized businesses and one of the biggest issue they face today. An organisation’s finance team needs to regard it as more than a cost centre, and more than a hardware update. It promises a return on investments that can and should be measured over time as a central KPI.

At the same time, the C-suite might show enthusiasm for some form of AI strategy for example – but they don’t always understand how to apply the technology in order to bring value to the business. Innovative technologies are not gimmicks, but powerful profit drivers if applied correctly and sensitively to business strategy. All stakeholders need to be on board to bring digital transformation to fruition.

Why communication is key

Communication is central to successful transformation, which requires the entire business to be on board. According to a McKinsey report on creating change within a business, 70 percent of change programs fail to achieve their goals, largely due to employee resistance and a lack of management support. It also says that when people are truly invested in change it is 30 percent more likely to stick. Bringing employees along with the transformation is essential – and so the communication flow should be considered.

A solid communication strategy will ensure that CEOs make it clear to the whole business that digital transformation is a separate IT function and has a separate seat at the table. Positioning this function correctly with colleagues will be the difference between competing at the forefront of a more global marketplace – fuelled by agility and innovation – and struggling to keep up in the long term.

We often see a breakdown in medium-sized businesses when communication flows up into the finance department – and when this is the case, it’s more likely that it’s seen as a cost centre than business enabler. What works best is when communication is right between the layers in an organisation and the c-suite communicates clearly with IT and the leadership team.

Medium-sized businesses must take a holistic view in terms of overall strategy, have the vision first and then lock it in with the CEO and at board level. That’s where real innovation happens. But you’ll need to do the talking before walking the walk.

Dell Technologies help medium-sized businesses lay the foundation on which to build their digital organisation. They can master modern technologies for their operations, and establish a consistent operating model across their core-edge-cloud infrastructures. Through our support, medium-size companies can ensure they are managing security, unlocking innovation, and modernising their success with finance they can control.

About the Author: Dell Technologies