Unlike large companies, small and medium enterprises have the advantage of integrating digitalization from the very start into their business model. The generation of young entrepreneurs has so much internalized the use of technology in their private lives that, when they start a business, they do not even think of adopting digital solutions as a big achievement. It simply comes naturally to integrate technology into the business of their companies, argues Constantin Magdalina, Emerging Trends and Emerging Technologies expert.
According to The Barometer of digitalisation in Romania, conducted by consulting company Valoria, 73 percent of small and medium-size service companies (SMEs) have been influenced to a great extent by digitalization. Only 60 percent of respondents say they are confident they have the knowledge to capitalize on digitalization, and 87 percent of entrepreneurs do not consider digital business models a threat to their company.
Concrete measures for the digitalization of SMEs
Depending on the intended purpose–to reduce risk, optimize costs, or quickly capitalize on opportunities–the most common digitalization solutions adopted by small and medium-sized companies may include:
Solutions for archiving documents in an electronic format – the transition from paper to digitized documents.
Electronic invoicing – use of sending, receiving and processing services for bills that save both time and money.
Define document management processes – centralizing documents from smartphones, laptops, or scanners gives you extra speed in searching and retrieving information by structuring it.
Digitalising consumer communication – using text messaging (SMS), web chat, social media strengthens the relationship with the consumer and optimizes costs.
Digitalising data collection – collect data through a device such as smartphone, tablet, portable scanner, and connect the device to a router for electronic data transfer. It helps with instant processing and save time and cost of travel.
Developing a digital mailroom – a central platform that collects information within the organization and sends it to the relevant department, increases productivity by 30-50 percent and reduces customer response time by 3 to 10 times.
What can SMEs receive from digitalization
According to the finding of the survet The Barometer of digitalization in Romania, 64 percent of the small and medium-size service companies in Romania are expecting to generate 10 percent more revenue over the next 5 years with Big Data and analytics, 64 percent by data and Internet connected devices (IoT) and 28 percent by virtual reality.
Choosing among these products or services can reveal three things about companies:
1. That the six solutions mentioned above were partially or fully adopted and companies, which now move to the next level.
2. That their business model privileges these 3 digitization solutions, and
3. They bet on these 3 solutions because they have the greatest growth potential.
With the help of digitalization, 58 percent of the small and medium-sized service companies in Romania expect both profits and their turnover to grow between 5 percent and 20 percent over the next 3 years.
According to the latest report by Romania’s National Institute of Statistics, the service sector has a growing share in GDP due to the increase in its added value. Sign of turning into a mature stage of country’s economic development model, high value added services are provided by companies that scale-up fast due to digitalization. To the extent that Romanian companies will adopt digitalization, they will be performing better and will increase the competitiveness of the Romanian economy.