By Margherita Pagani, Professor of Digital Marketing at emlyon Business School
‘Digitisation’ is one of the business buzzwords of the last few years – but many companies are still unsure how they can reap the benefits of digital transformation. The problem is particularly acute for B2B companies – especially SME’s – many of whom seem reluctant to make the jump.
People generally do not like change and those running small companies are no different. Many are reluctant to digitise – citing high costs and the considerable effort associated with doing so. However, in a recent research project where I interviewed digital marketing managers across five different industries, the results highlighted clearly what small businesses were missing out on.
Even relatively simple steps, such as introducing advanced cloud-based technology, such as a Customer Relationship Management (CRM) system, can dramatically increase the efficiency of internal processes and improve company co-ordination. This can create better cohesion and understanding across an organisation, improving productivity, and cut costs. Not only can this digitisation improve internal processes, but it can also boost its external activity, allowing a company to monitor their clients in more depth and ultimately improve their relationships with them.
Coco-Cola Enterprises (Coca-Cola’s B2B branch) introduced a new digital CRM system which connects its suppliers, retailers and other collaborators. This system improved their customer knowledge, increasing efficiency, and cutting the companies costs dramatically. Though small B2B businesses do not have the same resources as Coca-Cola, they must not be afraid to follow the example.
Investing in digitisation can also lead to organisations offering completely new products and services. Companies who invest in the most advanced and innovative technologies can enter and trade in new markets which would have previously been closed to them. For example, the invention of 3-D printing has created an entirely new market, meaning those who invest in it can offer a completely new product.
If these reasons aren’t enough – here’s another benefit we found; investment in digital transformation can also enable small businesses to connect with companies and suppliers that they would not have previously encountered. This new connection can not only increase the potential for new business, but can also facilitate knowledge sharing between companies, offering insights, and collaboration that would otherwise not have happened.
Investing in online knowledge sharing sites can allow organisations to receive expert industry knowledge, which can then be applied to better business practice. SpecialChem, for example, is a digital platform that connects more than 500,000 members of the chemical and materials industry, including innovators, business developers and marketers. Companies who invest in this network can receive support, insights and advice from experts in the sector, which can then be applied to their organisation.
For a long time, the B2B sector has lagged behind B2C businesses when it comes to digital changes and innovation, but now is the time to change this. Despite its initial costs, small B2B companies must not be afraid to digitise and invest in new technologies to enhance their businesses. Large global businesses are leading the way, and small B2B businesses should follow their lead without delay.
Dr Margherita Pagani is Professor of Digital Marketing at emlyon Business School and has recently published a research paper on ‘The Impact of digital technology on relationships in a business network’.
