Mid-sized companies are neither big enough to have access to considerable budgets to undertake large-scale projects nor small enough to orchestrate a disruption without running the risk of losing markets, clients, and the track record they have gained over the years. Mid-sized companies can be overwhelmed when they launch an initiative to guarantee a successful digital transformation.
The best way to start is to understand precisely what a mid-sized company is. According to the National Center for the Middle Market of Ohio State University, it is a group of companies with incomes from USD 10 million to USD 1 billion a year. There are 200,000 such companies in the United States alone, explaining the various nuances and situations within the same segment. However, many of them have points in common when taking the first steps toward digitalization.
For instance, a recent article published by the Harvard Business Review indicates that most mid-sized companies fail when implementing their digital strategy. It may be because their leadership team lacks the required specialized experience in business analysis or because of the failure to generate a cultural change regarding the way the company makes decisions. An Oxford Economics poll cited in the above publication estimates that less than 40% of respondents stated that they had the data necessary to make decisions. In comparison, 67% said that such a lack of data gives big organizations a competitive advantage.
Committing to growth
The data is there. It has been collected over the years and is still being collected at an increasingly accelerated pace. What seems to be lacking is a fundamental shift in the organization’s mindset. We cannot lose sight of the fact that the purpose of technology innovation projects is to lead companies to the next level. Therefore, it may be better to take a step forward than wait peacefully while others make their move. It is clear that companies mustn’t rest on their laurels: IDC predicts that, by 2026, 70% of SMEs (including mid-sized companies) will significantly increase their spending on IT to become more digitally robust and capitalize on the changing conditions of the market.
How can mid-sized companies adopt big corporations’ good practices without cutting their budgets dry and ending up short of resources? The first step is finding a technology partner to help choose the adequate tools to develop the right strategy to extract the value of data logs and move toward a true transformation. The vision cannot be to “hire a technology supplier,” but rather to establish a genuine alliance with a partner who will align itself with the purpose of the business.
To take the second step, mid-sized companies must swallow a bitter pill. They must establish a work plan with precise goals, clear links, and measurable objectives.
Reviewing the current picture
It is common for companies to feel attracted by the siren song of cool applications, such as artificial intelligence, predictive analysis, and automation. But, to obtain tangible business results from these technologies, the dirty work needs to be done before. That is, cleaning the data to guarantee the maximum quality possible. One of the consequences of accumulating data for decades without extracting value from them is that they are stored in different repositories that are hardly interconnected, with errors, duplications, and a massive amount of unnecessary data lying around within the infrastructure. Additionally, processes must be sorted to obtain optimal results, eliminate unnecessary efforts, and gain efficiency.
The same thing happens with legacy technologies. They served the business for many years, required a considerable investment in their time, and rendered their services. However, in many cases, they force organizations to limit themselves to what they can offer, thus significantly constraining growth.
A crossed look
Another significant barrier that must be torn down is that digital transformation is an effort centered on the IT area. Digital transformation is an initiative that must extend to the whole organization, starting with senior managers, who play a crucial role as sponsors and cultural communicators.
Technology is only one of the pillars. An exhaustive discovery process is fundamental to detect business obstacles, promote growth through digitalization, and decide what new platform-based products and services can be offered and what opportunities are provided by innovation to lower costs, gain efficiencies, or thoroughly understand consumer behavior or demand evolution.
During the discovery process, priorities are established according to the business needs, and metrics are defined to guarantee that there are no detours along the way.
The importance of “digital leaders”
One of the keys to the success of digital transformation projects in big companies is the firm support of the company’s leadership. The so-called “digital leaders” can understand that data is an asset and base their decision-making on said data. The analog leader is the one who decides how to increase the sales volume. Digital leaders are the ones who can add value to the clients.
Now that the mid-sized company knows what features of the digital transformation process of big corporations must be adopted to speed up growth, it is time to add segment-specific competitive advantages; that is, greater agility due to the smaller size required for implementation. Speed is more useful than ever since change does not wait, and disruption is always around the corner. Every innovation, evolution, and growth decision that a company does not take is a decision left in the hands of its competitors.