Digitalization in MSMEs
Digitalization in MSMEsClick to read
|Digitalization is one of the key recent trends in business organizations (including MSMEs and large companies), entire business sectors, and whole economies.
But what is digitalization?
Digitalization means leveraging digital technology to replace former social (i.e., human interactions, relationships, norms) and/or technical (i.e., technology, tasks, routines) aspects of structures, e.g., products, services, user experiences, processes, etc.
(Osmundsen et al., 2018)
In simple words, digitalization is about integrating digital technologies into the everyday life of entrepreneurs and into all activities and operations of a business enterprise.
Digitalization transforms entrepreneurship in two ways.
- First, it is the emergence of new entrepreneurial opportunities in the economy.
- Secondly, it is about transforming business practices and how these opportunities are realized.
The main drivers for the digitalization of MSMEs are:
- awareness of digitalization,
- digital capabilities.
- availability of digital technologies,
- changes in behaviour and expectations of customers,
- industry changes and trends related to digital technologies,
- changing situation in competition,
- and changes in regulations.
To implement digitalization in MSMEs, you should consider the benefits it can bring and the appropriate operational implications for the company. On the other hand, the company should establish digitalization capabilities through institutional conditions, strategy, human capital and skills. Other factors come from the external environment and must be analyzed.
Digital Maturity Models (DMM) can help you in this process and enable digitalization.
Digital Maturity Model is a framework used to assess and understand a company's current level of digital maturity. Several digital maturity models exist with varying scopes, points of view, and metrics for measuring success. They can help identify gaps, establish key areas to focus on, and determine where to start.
Check available free DMMs:
Digital Maturity Framework
Advantages of Digitalization for MSMEsClick to read
Efficiency typically relates to cutting costs in various ways, process improvements beyond cost-cutting resulting in improved quality, design, speed, environmental benefits, protection at work, etc., and growth of value added which creates space for higher margin.
This area of benefits includes a better understanding of customer preferences through the collection of big data, use of data analysis, immediate feedback, and easier and faster access to a large amount of information. A better understanding of customer preferences and the easy ways to communicate what customers want, lead to higher customization of companies' products and services.
The flexibility of MSMEs is manifested in the wider use of remote working (tools for remote working), the ease and versatility of marketing (e.g.,social media, big data, automated services), and easier acquisition or involvement of customers and different stakeholders (e.g.,websites, blogs, AI).
General management Improvements
It represents higher availability of information and documents, adjustments to management of the business as well as related processes, better awareness of current and future trends in business development, improved risk management, professionalism, acceleration of decision-making processes, and higher production flexibility (e.g., big data, AI, IoT, cloud services). It is also possible to enhance different aspects of a company based on big data analysis.
Operational implications for MSMEs in order to pursue digitalization are:
- to develop the required digital skills and capabilities within a company,
- to build and foster digital awareness among both owner/managers and employees,
- to acquire innovation assets to introduce different aspects of digitalization,
- to build a favourable organizational culture to change, learning, and gaining new capabilities,
- to utilize existing digital infrastructure,
- to maintain an overview of market conditions and competition,
- to keep up with digital technologies,
- to follow digital shifts in the industry.
Digital Communication Channels for MSMEsClick to read
What is Digital Communication Channel?
A digital communication channel is a form of media that enables interaction with another person or many people using the internet at the same time.
The use of digital communication channels was widespread among MSMEs during the pandemic as far as their operational focus allowed it. This trend persists as it is very effective and time efficient.
In this section, we present useful tools for effective digital communication.
However, there are two types of digital communication channels :
- External Digital Communication Channels
- Internal Digital Communication Channels
External Digital Communication Channels are used to communicate with customers and external stakeholders.
WEBSITES - easy-to-use and free websites builders
Free Drag-and-Drop Website Builder. The unique advantage of using Hubspot is creating, managing, modifying, and publishing content in a user-friendly interface. You can customize the design and functionality of your site as well as have multiple users working in the back end.
WordPress is a free and open-source tool for creating websites. It allows you to customize the websites. There is a wide range of templates to choose from, and you can easily customize them.
Wix offers attractive and well-designed templates to choose from. It's beginner-friendly and can practically design itself. The Wix app market allows you to add more features and functionality.
Facebook has the most extensive user base of any social media platform. Depending on your audience and budget, this platform has the potential to be the best way for your business to reach the most significant number of people online.
Instagram has fewer features than Facebook, making it easier for MSMEs to learn how to use it fairly quickly. Plus, its interface is sleek and straightforward. Instagram is best for sharing visual content and engaging images.
It is used for global video sharing. As the world's second most visited website after Google, it has vast potential to reach your audience. You can share short and long videos on YouTube.
TikTok and influencer marketing are recent trends.
Internal Digital Communication Channels facilitate communication primarily within the company and outside of it. Most commonly used are emails, but also other tools, such as:
Skype is a simple communication platform embracing cloud-based technologies. The videoconferencing platform includes online calls (audio or video), chats, conferences of up to 50 people, scheduling meetings and others.
It is a video conferencing service suitable for teams. It includes a virtual workspace, video or audio calls, live chats and the possibility to record sessions. Zoom has a better user interface and is very user-friendly.
It is a workspace that allows organizing meetings (video or calls) and storing documents, but you can also use different apps to organize work. It is a holistic tool for managing your workspace.
Tools for Remote Working and Virtual CollaborationClick to read
With the proliferation of working from home and the inability to travel, remote working and collaboration tools have become even more popular. The tools we introduce are very powerful and help you work faster and more efficiently from anywhere.
Collaboration and project management tools
Slack is a messaging app for businesses that connects people to the information they need by forming project teams. Slack organizes conversations into channels where everyone can share ideas, make decisions and move work forward. There is a range of functions that enable feature optimization and app integrations.
Trello is a visual management tool for managing any project, workflow, or task tracking. It is possible to add files and checklists or even customize the interface.
Miro is a digital whiteboard for easy collaboration with others. Miro allows you to create notes and designs, move things around, and communicate through embedded video calls or online chats. It is suitable for a wide variety of tasks that require collaboration: workshopping, strategy mapping, Agile ceremonies, UX research and design, product development, customer discovery and process visualization.
Storing and sharing documents
WeTransfer is a cloud-based online platform that allows the uploading and sharing different types of files to other users on the internet. It is free, effortless and increasingly frequent as it enables sending very large or heavy files conveniently and easily.
Dropbox is a personal cloud storage service that is frequently used for file backup, sharing and collaboration. All the files are backed up to the cloud and available online from anywhere.
WETRANSFER is better suited for the one-off sharing of large volumes of data, and DROPBOX is more suited for sharing documents with a team in the cloud.
Online LearningClick to read
Online learning is an educational process that uses information and communication technologies to create courses, distribute learning content, communicate between students and teachers, and manage learning.
Online learning refers to training on any digital device, e.g., taking an online course, watching an educational video, reading an article, or taking a quiz.
Online learning represents the opportunity to take courses at the world's top-ranked institutions.
- wide range of available courses in most subjects,
- flexible schedules,
- free or lower costs,
- studying abroad remotely.
- require a greater degree of self-motivation,
- technology dependant,
- minimal physical interactions between students and teachers.
Platforms for Online LearningClick to read
There is a wide range of platforms for online learning. In the following part, we present three, the first two of which are the most used and one available for free. However, MSMEs seeking specific knowledge and skills should research which online learning platform is most appropriate for them.
Udemy Business is a top online learning platform for business teams seeking more general skills, which offers 14000+ courses. It is easy to use, there are options to monitor your progress, and after completing a course, the trainee receives a certificate. Disadvantages are that the platform only supports video-based courses and lacks interactivity.
It is designed for individuals or businesses looking to upskill their teams in the business, tech & creative industries. It offers 16,000+ courses. High-quality control ensures that instructors have excellent training skills. Courses are interactive via quizzes and practice exercise files. After the completion of the course, a certificate is issued.
Google Digital Garage is a programme that provides free training and tools to help grow your career or business. It offers a range of short courses to gain today's most in-demand skills. Filter to select different categories of courses, lengths, providers, etc.
Example of available courses:
- Fundamentals of Digital Marketing
- Get a Business Online
- Make sure customers find you online
- Understand the basics of code
On this platform, you can learn how to create your website using different programming languages, work with big data using various programs and much more. There are tutorials, references and exercises available for you to explore.
Example of available courses:
- Artificial Intelligence
- Machine Learning
Online Courses' Recommendations for MSMEs' uptakeClick to read
There are many quality courses, but also videos and educational materials. It is essential to consider whether the education budget is available.
Based on that and the specific topic you are interested in, you need to look for a suitable alternative among the suggested platforms in the previous slides or many other existing ones. This section proposes three free courses related to the RESTART training curriculum.
Managing Innovation and Entrepreneurship
Consider taking the Sloan School of Management's course on Managing Innovation and Entrepreneurship. The course provides basics for managers that need to organize successful technology-driven innovation. Innovation-based strategies as a source of competitive advantage are examined, how to excel at identifying, building and commercializing technological innovations. There are also examples of how established firms can become more entrepreneurial in their approach to innovation. All the content is free to download and study. You can also check other free or paid courses.
Remote Work Revolution for Everyone
It is offered by Harvard University. You can learn how to build trust, increase productivity, use digital tools intelligently, and remain fully aligned with your remote team. You will also understand the key elements of remote work, developing strategies to improve productivity, communication, and collaboration, selecting the right digital tools, and others.
Improve your online business security with Google Digital Garage
Learn the basics of online security and how it applies to you and your business. The videos in this course introduce the basics of online security and how to apply them to your employees, your company, your users and your customers.
Summing upClick to read
- Digitalization is the integration of digital technologies into the everyday life of entrepreneurs and into all activities and operations of a business enterprise.
- Digitalization causes the emergence of new entrepreneurial opportunities and transforms business practices to realize these opportunities best.
- To implement digitalization, MSMEs should be aware of what benefits it brings and what the operational implications for the company are.
- Digital Maturity Models are frameworks used to assess and understand a company's current level of digital maturity.
- Digital communication channels are commonly used among MSMEs and are effective tools for internal and external digital communication.
- Tools for remote working and collaboration are powerful tools that can help you work faster and more efficiently from anywhere.
- A wide range of platforms for online learning and online courses can be helpful for MSMEs seeking specific knowledge and skills.
- Such platforms are e.g., Udemy, LinkedIn Learning, Digital Garage, W3schools