For many startups looking to make the next move in order to scale, they’ll often hear the words “digital transformation” tossed around. For some, this is just a tired buzzword. But for startups? It’s a nonstarter. Technology is changing every single day and the businesses that adapt to new technology the quickest can set themselves up for success amongst their competitors. Today, we’ll dive into the digital transformation playbook, which is designed to guide startups through their first year, helping them navigate the priorities, leverage technology, and make sure they'll be on their way to scaling effectively...
Let’s face it, digital transformation for startups can be confusing or just plain difficult. More often than not, we miss the opportunity to lead with clear, long-term goals. You need to begin by identifying how you’d like digital solutions to resolve a specific challenge in which you’re facing. For example, are you looking to streamline operations or gather actionable insights?
Some data suggests that setting goals and tracking progress leads to more measurable success. Not just a measly 1%, but 3.5 times more than those that don’t. This means you need to align their digital transformation initiatives with their growth objectives to ensure every dollar spent on technology is propelling them forward.
“Data is the new oil,” have you ever heard that? Well, it’s true. Especially when it comes to decision making. Whether it’s customer behavior analytics to financial forecasting, data provides actionable insights that will push your business forward. In year one, it’s prime time to build a foundation of data infrastructure to collect, store, and analyze key metrics. Implement some sort of digital transformation roadmap that has data management best practices and the tools necessary for extracting insights as you scale. In short, set up systems that don’t just capture data but also use it.
According to a recent McKinsey report, companies that base their strategies on data insights grow 30% faster than those that don’t. Make your data available to all departments too, this can help everyone make informed decisions, not just those working with the data first hand.
Scalability is the name of the game (how else would you scale the startup?). Cloud-based solutions give you the flexibility to scale up or down based on your business’ current needs. Cloud infrastructure can also lower the cost of IT resources while giving ample tools to your team – who doesn’t love a dollar saved?
When a startup uses scalable technology infrastructures, they can reduce their IT costs by up to 40%. You can also free up resources for different growth initiatives. Solutions like CRM systems, customer service platforms, and communication tools will allow your digital transformation to work hand-in-hand with your growth rather than hinder it.
How many times have you heard “the customer is always right”? While it’s definitely not always true, your business will see more success if it also enhances the customer experience. Think customer-centric digital touch points—responsive websites, mobile apps, and automated support—it covers all the basis of meeting customer needs and doing so quickly. Don’t just take our word for it either. According to a 2023 report by Deloitte, customer-centric companies are 60% more profitable than companies without this focus. So once again, the customer isn’t always right, but they sure have to be top of mind.
So, you thought we would say you have to hire someone to implement this and manage the engine, huh? Nope. You’d just have to hire someone to automate the routine processes. Why? Because it saves time and reduces error over the long-run. Start by identifying high-volume tasks within your operations (this can be data entry, reporting, or the small-bit of customer engagement that could benefit from automation). Tools like robotic process automation (RPA) and workflow automation platforms are invaluable in enabling teams to focus on high-value tasks instead of repetitive, manual work.
Startups need to abuse the availability of automation tools. PwC released a study which states automation can help startups increase productivity by as much as 20%. For scaling startups, this increase is often the difference between smooth scaling and operational bottlenecks.
The journey of a digital transformation isn’t a one and done. Nope, it’s continuous, but the first year will make or break your foundation set for sustainable growth. By defining clear goals, building a data-driven culture, investing in scalable infrastructures, and putting customers first, a startup can create a beast of a digital transformation roadmap which aligns specifically with their goals and their growth strategy.
For a startup, taking the time to invest in digital transformation early not only supports immediate scalability but also generates an agile and adaptable organization ready to change at the snap of the market demand finger. As your startup progresses, this foundational work will pay off (short-term and long-term), and it’ll allow your team to stay ahead of the curve and keep scaling with success.