Part 2―How SMBs Used Digital Transformation to Prepare for the Future
In last year’s study, we defined digital transformation as the process of using information technology to streamline, systematize and scale-up manual business processes. Before the pandemic, many businesses hadn’t considered digital transformation a high priority, but the business environment pushed it up in priority overnight.
Digital Transformation Continues
The second wave of our study confirmed our theory that digital transformation has only just begun. Small businesses continue to adopt and utilize new technologies for working remotely, managing their workplaces and reaching target audiences. More than any other form of technology, nearly two-thirds of businesses said they adopted or upgraded video communications platforms. Another focus on technology upgrades was on employees. This included the adoption of workforce analytics and human resources management software which both increased by six percentage points.
More than two-thirds of small business decision makers say that the COVID-19 pandemic has "strongly" or "somewhat accelerated" digital transformation at their company, up from 2021. Acceleration has been especially strong in larger small businesses vs. small ones.
Video communication continued to be the most popular investment but small businesses also adopted internal communications and customer relationship management software:
- 64% invested in video communication platforms; up 6% from 2021
- 44% invested in internal communication platforms; up 4% from 2021
- 34% invested in customer relations management (CRM) software; up 5% from 2021
A Positive Impact on Business Growth
Sales and growth have been positively impacted by remote work and digital transformation for 71% of small business decision makers. This has increased from 2021. Large companies and financial services/tech companies are especially likely to say sales and growth have been positively impacted.
Among those who have adopted new ways to reach and communicate with target audiences, the vast majority say these new methods have had a positive impact on growth. This number has increased most among smaller businesses and in the financial services industry since 2021.
Small business decision makers reported the new techniques their company adopted to reach and communicate with target audiences had a “very positive” or “somewhat positive” impact on their company’s growth:
- 97% for technology businesses
- 98% for financial services companies
- 92% for retail businesses
- 89% for manufacturing businesses
- 93% for professional and business services
RoboKind is a Dallas-based education technology company that builds robots and social-emotional curriculum for autistic students. The company struggled substantially at the outset of the pandemic as public schools, which make up the majority of their customer base, shut down. This left them with the challenge of finding new ways to support their customers. Finding innovative digital solutions proved to be a solution that ultimately propelled the company to new heights.
The company’s founder and CEO, Richard Margolin, says, “We restructured the entire company around a customer-centric model. Working remotely has enabled our software team to easily sit in on calls and has given them more perspective on what's important to our customers.”
In addition, more than half (55%) of small business decision makers say that meeting with clients virtually has helped revenue, a 12-point increase from last year.
Coming Up
Look for more highlights in upcoming articles of this series as we take a deeper dive into other aspects of the study including:
- Remote work and its impact on workplace culture
- What this all means for the future of business
Read the full interactive study on our paid post with The New York Times at How Small Businesses Have Handled Another Unprecedented Year.
