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Ten years ago, companies followed other market rules. But things change, and methods that were once effective do not bring the same high results anymore. Today, the winner is the one who is quicker to upgrade his or her company’s work processes using innovative digital technologies.

Small business companies generate 44% of GDP in the U.S. economy. According to the World Bank, small and medium enterprises (SMEs) provide 7 out of 10 jobs in the world. These types of businesses play a very important role and constitute a key source of the state budget replenishment in countries with a high standard of living. Better technologies mean bigger opportunities.

Let’s look into the work of the companies both with modern digital tools and without them.

Traditional business

Usually, there is a store located near the city center, and an affordable office in a quiet district is rented for the employees who are not in contact with the customers (recordkeepers, drivers and others Small Businesses).

If a business has only a standard outlet, it loses many potential customers. In 2007, online shopping accounted for 5,1% of all sales in the U.S., and in 2020 this figure multiplied and reached 20%

If a business does not provide its customers with 24-7 online support, it will have to give up its place in the market.

Small Businesses & stores have a limited number of communication channels. These may include the distribution of flyers, a lot of which go straight into the trash can, or radio commercials that occasionally reach the target audience.

Additionally, because of the big distance between the store and the office, all the documents have to be delivered in some way. The retailer also has to process a lot of documents: financial reports, invoices, contracts and the like.

According to a study by Gartner, businesses continue to spend an incredible amount of money on document flow:

  • Working with paper documents costs 13 to 31 times more than the paper itself;
  • About 3% of all expenses are related to documents;
  • An average office worker uses 10,000 sheets of paper every year.

The Covid-19 pandemic particularly clearly demonstrated the need for digitalization. This period was most painful for SMEs, and some companies had to stop their commercial activity.

To avoid dismissing half of the staff or pausing your business during any contingencies, you should modernize your work processes, develop online selling, and improve your communication with potential customers.

Digital as the key to development

Today, the digital sector offers unlimited opportunities for optimization and improvement of work processes. Because of their accessibility, digital technologies can become a “life preserver” for SMEs.

The demand for online resources increases every year. According to McKinsey, in the summer of 2020 almost 60% of the world’s communication with customers was held online. In 2019, this rate peaked at 36%.

During the pandemic, customers quickly switched to online channels as to the primary modes of communication, and businesses responded to this change. The pandemic accelerated digitalization by 8 to 10 years, the McKinsey study says.

Life of companies in the digital age

Automated work processes

Invest your time and money rationally: entrust simple routine processes to smart technologies, so you can concentrate on really important projects. The digital tools that will help you do your job include:

Implementation of ERP and CRM

Implementation of the ERP and CRM systems should be treated not as an expense, but as an investment in development. This is the foundation for the digitalization of your business. 

The benefits of these systems are as follows:

  • Automation of record keeping;
  • Automation of warehouse recordkeeping: receiving, storing, delivering and stocktaking;
  • Data on sales and customers are stored in one database;
  • All information is stored in one place and can be accessed from anywhere in the world (provided that Internet access is available);
  • And most importantly – the ability to connect other services and programs to the ERP system. You can even do it yourself – everything is described in this guide

Electronic document management

Modern cloud-based ERP systems have built-in or third-party modules for electronic document management (EDM). For example, Business Document Management by Dynamics 365 allows you to create and exchange documents in online mode.

Why would you need it? With an EDM system, you will not need to order a delivery to send your documents, as well as waste paper and ink.

Effective advertising

When you implement ERP and CRM, you gain the ability to save on advertising due to the precise targeting of your messages. Let’s look at the ways in which this can be done. 

Creating segments in CRM

The CRM system allows you to store and organize information about your sales and customers. Therefore, you can create segments of your customers according to their interests.

For example, for an online pet store the segments may be as follows:

  1. By the type of animal: dogs, cats, fish, etc.;
  2. By the size of the animal (relevant for dogs);
  3. By the number of animals;
  4. By the food purchased.

MS Excel, despite its numerous advantages, can’t offer such functionality.

Targeted email, SMS and push messaging

Modern CRM systems integrate easily with email and SMS services such as Mailchimp or Podium. With the segments created, you can send only those offers that will be relevant to particular customers (segments):

  1. For cat owners – cat litters (because dogs simply do not need them);
  2. For owners of big dogs – discounts on big food packs (owners of Chihuahuas will not buy 50 lb packs for their pets);
  3. For owners of five pets – regular and frequent reminders about purchasing food and the upcoming sales;
  4. For those who always buy Royal Canin pet food, promotion of Acana products will not be relevant.

Conclusion

This article highlights only a small part of the benefits that businesses gain from digitalization. You may argue that this is expensive, and that Microsoft Excel is better in this relation. And this is true if you have a few hundred clients. But what if you have a few thousand instead? Developers of modern services offer their products for reasonable costs or even for free (as it is with Odoo). Hence, we recommend not to put off developing your business, because this may be the last good moment to do this.

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