The 4 Stages In A Startup’s Digital Transformation Journey


By Rohit Shenoy

The new normal has brought about a need for digital transformation (DX) in Small and Medium-sized enterprises (SMEs) and has made it one of the top investment priorities for them. Digitalization – a mere good-to-have process for Indian SMEs – has now become the most critical requirement.

The introduction of smart phones, and smart devices has created a tectonic shift in the way content is consumed today. The rise of Generation Z along with the advancement in technologies and global connectivity has caused SMEs to adapt and invest in these technologies to enhance their reach, revenue, resilience, and have a competitive advantage.

Transformation is, however, a continuous process. It is a journey where businesses move away from their orthodox business models and legacy architectures, and adapt to the current technological landscape and environment to create new markets that support innovation and growth.

SMEs have been contributing significantly to the expansion of entrepreneurial endeavours through business innovations. With the use of emerging technologies, SMEs are widening their domain across sectors of the economy, producing diverse range of products and services to meet demands of domestic as well as global markets.

SMEs understand that in order to leapfrog over new as well as existing competitors, they need to go back to the drawing board and emerge with a budget that has Investment in Digital Transformation as a line item. Having said that, some SMEs have already started testing the waters.

The current landscape of SMEs digital transformation journey ranges from new players entering the game with just a website and an email id, to advanced players with online marketing, ERP applications, and ecommerce tools at their disposal.

A Study by Clover Infotech on Digital Transformation of SMEs shows that there are 4 stages of digital transformation ranging from being digital entrant to being a digital native. You can download the white paper here for free – White Paper to empower SMEs.

It talks about SMEs’ current technology landscape, their challenges in digital adoption, and their journey towards being a truly digital-native enterprise.

Let’s take a look at the four stages of SMEs’ DX (Digital Transformation) Journey:

1.Digital Entrant: These are new entrants who have just set foot into the digital space. Most of their business processes are offline, physical, and hence, manual.

The only digital properties they possess are enterprise email and website. The email IDs are used for internal as well as external communication whereas the website is used as an information sharing portal. They do not fully utilize the capabilities of their digital properties.

2.Digital Resolute: They take the digital assets built in the Entrant stage and utilize it to enhance sales. The website is not just used as an information tool, but also as a business enabler.

They have some level of social media presence, and also get involved in a bit of digital marketing. Some of the sales is through online marketing. They use ERP and CRM software for their internal business processes.

3.Digital Driver: Digital Drivers are the ones who are already on a journey with a plan to digitalize their complete business and feed-off of a single digital ecosystem in order to drive product innovation and reach new markets.

Their marketing is completely digital, with the use of social media, paid ads, display network, search engine optimization (SEO), to enhance customer experience. They use cloud-based subscription models (cloud based applications) for logistics and supply chain to enhance efficiency and reduce operational overheads.

4. Digital Adept:  Along with the tools at their disposal in the advanced level, they also make use of next-gen innovation tools such as Automation, Artificial Intelligence & Machine Learning in their business processes to enhance efficiency, accuracy, and productivity. Some of them use Big Data to facilitate better decision-making. They have a wider digital presence, catering to a global audience, thereby, exploring new markets.

Digital Transformation is here to stay. SMEs will have to make room for digital transformation in their overall business strategy. SMEs need to embrace the technological advancements to become completely agile and flexible in order to scale, and meet increasing customer demands.

We believe that with a strong digital mind-set, and with the best-in-class MSPs as partners, SMEs of today can embrace digital transformation seamlessly and become the global multinationals of tomorrow within a few years.

(The author is Corporate Marketing – Lead at Clover Infotech)