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Digitization of SMEs in 2024: opportunities, challenges and tips for a successful transition

The transition to digital technology has radically changed the modern business world.
To remain competitive and meet their customers’ expectations, small and medium-sized businesses are now forced to digitize their operations.
This shift towards digital technologies has not only opened up unprecedented prospects for growth and provided advanced management tools, it has also created new challenges with which entrepreneurs will now have to learn to navigate.

The benefits of digitalization for small and medium-sized businesses

Increased operating efficiency

Thanks to digitalization, SMEs can optimize their operational efficiency in a number of ways.
The first is throughprocess automation.
Digitization enables repetitive tasks to be automated, freeing up time for higher value-added activities such as business development and customer loyalty.
This increased efficiency also translates into lower operating costs.
The digitization of certain tasks reduces the number of human interventions, which in turn lowers associated expenses.
What’s more, automated processes are less prone to error than manual methods, and so help to limit the costs associated with irregularities.

Improving customer relations

Digitalization is revolutionizing SME customer relations in several ways.
On the one hand, it enables more personalized interactions thanks to AI and machine learning, which accurately identify the needs and preferences of each consumer.
On the other, it improves companies’ responsiveness, since digital tools enable instant responses to customer queries and problems, boosting customer satisfaction.
Finally, digitalization facilitates the collection and analysis of valuable customer data .
This information becomes a major asset for informing business decisions and adjusting offers in line with market expectations.
For example, customer journey analysis enables tailor-made digital strategies to be developed, and performance and customer feedback to be assessed.
In this way, companies can deepen their understanding of consumer needs and respond to them more effectively to deliver an ever more positive customer experience.

Digitization enhances data analysis processes

Optimizing data analysis stands out as a key digitalization asset for SMEs.
Thanks to sophisticated digital tools, companies can now process and analyze massive volumes of data (Big Data) with unprecedented speed and accuracy.
This data – from consumers, competitors, the market and the company itself – becomes a valuable resource for making informed decisions.
It enables strategies to be adjusted in real time, guaranteeing optimum responsiveness to market fluctuations.
Exploiting this data intelligently can also reveal trends, paving the way for new growth opportunities.
For example, by analyzing consumer purchasing behavior, SMEs can offer tailor-made products and services, thus improving their competitiveness.

Increased flexibility and adaptability

Digitization is revolutionizing the management and operations of SMEs, offering unprecedented flexibility and adaptability.
It is transforming teleworking into an everyday reality, enabling employees to work from anywhere with access to the necessary documents online, which can improve their working conditions and productivity.
At the same time, it makes SMEs more responsive to market fluctuations.
Real-time data processing enables them to adjust their offers and strategies instantly.
What’s more, digital tools, especially cloud-based ones, ensure automatic updates and systemscalability, guaranteeing a solution to changing needs.

Global access creation

Another benefit of digitalization for SMEs is the creation of global access.
These digitization-driven changes make international interactions possible by eliminating the notion of distance, opening up a vast horizon of unprecedented business opportunities for companies of this size.
SMEs can extend their reach and diversify their customer base without massive investment, regardless of their geographical location.
Thanks to the Internet and e-commerce platforms, they can market their products or services worldwide.
Digitization also enables collaboration between people located anywhere in the world, such as partners, suppliers or subcontractors, optimizing their business processes and supply chains, which can ultimately have a positive impact on SME sales.

Issues to consider when going digital

Cybersecurity threats

With the increasing digitalization of SMEs, cybersecurity is becoming a major issue.
Cyber-attacks, which have existed since the early days of the Internet, are gaining in intensity as businesses adopt digital technologies.
Among the most frequent threats are ransomware, which locks access to company data until a ransom is paid; phishing, which deceives employees to gain access to confidential documents; and malware, capable of stealing or destroying data.
Internal attacks, whether intentional or not, also represent a significant danger.
Often caused by human error, such as choosing weak passwords or clicking on suspicious links in e-mails, they can have disastrous consequences.
SMEs, often perceived as easy prey by cybercriminals, are particularly vulnerable because their security systems are generally less robust than those of large corporations.
In such cases, it makes sense to train users in the organization’s risks.

Troubleshooting

The digitalization of SMEs increases their vulnerability to system failures.
Indeed, a company whose operations are entirely dependent on IT systems runs the risk of being paralyzed in the event of a failure, leading to a total interruption of its activities.
To protect themselves against breakdowns, it is essential for SMEs to implement robust preventive strategies .
The installation of continuous monitoring systems, for example, enables problems to be detected and anticipated before they become critical.
Detailed documentation of hardware and software configurations is also essential.
It enables rapid fault diagnosis and immediate recovery of affected systems.
In addition, well-defined disaster recovery plans are crucial.
These plans must include clear procedures for restoring affected data and systems.
Finally, regular training of staff in good maintenance and troubleshooting practices can greatly improve responsiveness and efficiency in the event of a breakdown.

The importance of separating incompatible tasks

Segregation of incompatible tasks aims to prevent errors and fraud by assigning separate responsibilities to different people.
This practice is essential to ensure that no one person can initiate, approve and record a transaction at the same time.
For example, in an SME, one person might be responsible for creating purchase orders, while another handles their approval and payment.
This prevents unauthorized modifications and ensures better protection of company resources.
The growing importance of computerized tasks within SMEs reinforces the need to implement internal controls for the separation of incompatible tasks.
In a digital environment, the concentration of powers and responsibilities increases the risk of fraud and cyber-attacks.
Strict access management is essential to ensure that users only have access to the information and functions required for their role, thus avoiding conflicts of interest and abuse of power.
It’s also a good idea to use access management tools to monitor and control authorizations.
These tools can be used to define clear roles and ensure that sensitive tasks are divided between several people.
By setting up regular audit mechanisms, SMEs can quickly spot any anomalies.
For example, a periodic internal audit may reveal non-compliant access or attempts to bypass controls.
Finally, the integration of advanced security solutions such as artificial intelligence can help detect suspicious behavior and reinforce protection against fraud attempts.

Job cuts

The automation of processes and the use of specialized software reduce the need for manpower for certain repetitive tasks, leading to job cuts that can turn employees’ lives upside down.
For example, the adoption of automatic cash registers in retail outlets is reducing the number of cashiers needed, while the digitization of documents and electronic data management are reducing administrative positions.
SMEs need to anticipate these changes by investing in ongoing employee training.
This will enable workers to reorient themselves towards higher value-added professions, such as customer relationship management, new product development or data analysis, for example.

Change management in human resources

Adopting new technologies can create resistance among employees, who are forced to change their habits.
To make this transition a success, clear, ongoing communication is essential.
Employees need to understand the benefits of new digital tools (the time savings are enormous!) and how they improve their day-to-day working lives.
Training staff in new technologies is a key element.
This training must be adapted to different skill levels and include practical sessions. Employee commitment is essential to ensure successful adoption of digital tools.   In conclusion, digitalization for SMEs offers a panoply of benefits, including increased operational efficiency, enhanced customer relations, optimized data analysis processes, increased flexibility and wider global access.
It can also help you make strategic decisions, providing you with a wealth of information that was harder to access before the digital transformation.
However, this technological transition is not without its challenges.
Cybersecurity threats, the complexity of separating incompatible tasks, the risk of system breakdowns and managing change among employees are among the main issues to be overcome.
To reap the full benefits of digitalization, SMEs will need to skilfully navigate these benefits and challenges, putting in place appropriate strategies to secure their digital evolution.
Please do not hesitate to contact us for further information or personalized advice on this subject.
An article written by Cloé Turcotte.

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