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Digital transformation of your SME

Digital transformation isn’t purely about sharpening up your existing offering; it’s about staying in touch with an unpredictably evolving social and technological landscape and remaining relevant.

This article was written by Brad Rappell, CEO of Franchising1st for this Deakin University course.

Disruption isn’t only about a competitor finding a digital way to make you look slow, inconvenient, expensive or useless; it’s about entirely changing the game. Which brings us to the matter of management.

Mode One management

Management brands tend to be weighted to traffic from the top down. This is one characteristic of what some call ‘Mode One’ business. It’s about squeezing more juice from the same orange by sweating the fine detail. A point here and a half a point there. Lifting the average transaction by five dollars. And of course these increments add up – but perversely, one symptom of a Mode One approach is margin compression as competitors vie ever more aggressively for the same crumbs.

Mode One also is typified by management in silos: operations, marketing, field support, training, purchasing, franchise development and so on. Information percolates upward in isolated streams, and it’s up to the chiefs of silos to get together, correlate and make sense of it.

The upshot is that game-changing insights at the coalface can take an age to get where they’re needed – and given the inevitable spin imparted by individual silos, may bear little resemblance to the original gem. This can happen even in organisations that have a quite sophisticated customer relationship management (CRM).

Mode Two management

Mode Two management is about agility at the fringes where your customers dwell, multi-disciplinary project teams, fluid from-the-ground-up communication and having a less-filtered/spun flow of information, all of which enables you to see the bigger picture strategically and much closer to real time. It’s about the enhanced agility of a flatter, more responsive, more communicative structure.

The daunting side is that this typically requires a significant cultural shift – a change of posture from jealous-and-defensive to open-and-collaborative. The exciting part is that it’s like an escape pod to the future – far more reflexive and receptive to evolution.

The problem with this in the digital world is that most of today’s existing do-everything digital suites are configured around a Mode One management structure, ie built around silos, with awkward intranets that do little to encourage osmosis of information. They can be tricked into supporting Mode Two, but it’s like bolting performance parts to an engine that was never designed for them.

This is why most digital suites become flavour of the month and then quite quickly fade into obscurity. Thousands upon thousands of bench hours are required to keep these packages adapted to changing circumstances and advancing hardware and inevitably they become clunky.

Three assumptions

As a business:

  • you’re aware that (increasingly) you’re held morally and legally responsible for the welfare of those who’ve put their faith and invested their money in your vision, acumen and support
  • you’re aware that digital transformation is a must and that your needs will change with growth and emerging technology
  • you accept that disruption in some form is probable.

Ten digital transformation factors

In light of these three assumptions, here are ten digital transformation factors for franchisors to consider when deciding on a digital suite that will help support the growth of the business and owner/manager’s work in and for the SME:

  1. Simplicity – includes only those (interrelated) functions that serve your specific purposes now, but with capacity to seamlessly alter and expand your suite as disruption occurs, strategy evolves and new functions are needed.
  2. Future proofing – knowing that every element of your digital suite will be continuously upgraded and that new technology will be capable of seamless, effortless and low-cost integration across your system as a whole.
  3. Scale and stability – reassurance that your supplier will not only be here next year but also remain at the global forefront of development.
  4. User ease – programs and technology that most people already are familiar with strong, personal and decipherable training and technical support.
  5. Minimum new hardware – employing the smart devices people already own and understand (being called B.Y.O.D., ie ‘bring your own device’).
  6. Affordability – no lump sum in advance. Modest monthly rental costed solely on what you’ve actually used. Turn it off and rental stops. Priced at mass market rather than bespoke rates.
  7. Confidence – knowing what not to invest in, i.e. what soon will be redundant.
  8. Military-grade cyber security, protection of IP, flags to potential fraud and ability to instantaneously halt individual access to the system.
  9. Compliance – regularly updated summaries and cross-checks.
  10. A digital, mobile-first platform based first and foremost on the strategic considerations of your enterprise, ie technology as a scalable tool rather than an end unto itself. Potent dashboard clarity at each level, fostering interdisciplinary communication, dismantling silos and speeding information flow to the big-picture strategy makers.

So where might you begin?

There are many digital suites you could use such as Workplace by Facebook which has every human communications tool you could wish for in a Mode Two operation: internal, external, teams, groups, project, social and it’s in a format almost everyone is thoroughly familiar with and attuned to.

Platforms such as this make digital transformation and potential transition to a Mode Two paradigm simple, affordable, instantly actionable, infinitely extendable, strategically driven and virtually risk free.

On the subject of risk

Risk is the great inhibitor, particularly when you’ve been told that you’re staring down the barrel of one to two hundred thousand dollars for a technology solution for your business. But the manner of investment in technology has flipped into what’s being called a ‘fast fail’ model.

Rather than making a huge investment or commitment to a digital suite such as Workplace by Facebook, try a few things and if they work, layer more. If they don’t, bail out with no further exposure.

Conclusion

No question. Business is now at a critical juncture at which there’s a before and after moment. Digital transformation is first and foremost a strategic issue and the tech is merely a rapidly evolving tool.

It doesn’t have to be hard and it needn’t be ruinously expensive – it just has to be now.

Your task ​

Based on what you gleaned from the article, discuss what you consider to be the benefits and risks to your SME of using a digital engagement tool such as Workplace by Facebook.

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This article is from the free online course:

SMEs and Digital Engagement

Deakin University

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