Why startup survival depends on embracing a digital future
The COVID-19 pandemic has forced businesses of all shape and size to adapt, adjust and pivot in response to the ‘new normal’. Whilst larger businesses - who suffer from being less nimble than their startup counterparts - have faced unique difficulties, startups – who lack the cash reserves and structure of larger businesses – have also faced their own challenges. Many startups have had to fundamentally reconsider their business models and how they operate as a result.
Streamlining operations and optimising processes as a means of reducing costs has never been so important, and in today’s uncertain economic environment, every pound counts. This is where digital transformation can provide startups with innovative solutions, and help growing businesses better weather the current storm.
Digital transformation can be defined as the replacement of non-digital (or manual) processes with digital processes. At its heart, the process involves implementing specialist technologies that ‘digitalise’ operations, in turn optimising them and making them far more efficient. This enables money to be saved, risk to be reduced and processes to be streamlined – so small businesses can work smarter, faster and harder!
Digital transformation is also a key tool in helping businesses scale – an obvious priority for startups. Automation technologies – such as Robotic Process Automation (RPA) – enable small businesses to scale a business model rapidly and consistently. Once a startups unique winning formula or model is established, many of the processes underpinning that formula and model can be automated, unlocking the potential to scale with more ease, affordability and consistency.
As any startup owner or entrepreneur will know, consistency and reliability are fundamental to gaining trust and a growing customer base. Problems and inconsistency with the back end of operations can badly hinder and impact delivery and front-end operations, damaging your reputation. By automating processes that are traditionally undertaken by a human, the scope for human error is vastly reduced, ensuring far more consistent results.
One area where digital transformation is making big inroads with small businesses is in customer service, for example. In today’s competitive world, consumer facing startups with poor, inefficient or cumbersome customer service are at an immediate disadvantage.
Advanced chatbots, which are powered by AI enable customer serviced departments to automatically interpret a customer’s voice or text. The result is that customer service enquiries or issues can be resolved far more quickly and cheaply than previously possible, and the technology frees up human resources – which at startup stage be limited – to focus on the more engaging tasks.
Because digital transformation remains a relatively new form of optimising, cost saving and improving operations there remain a number of misconceptions around its utility. The first misconception is that digital transformation is unnecessary, a luxury, or just a tech fad. Wider fears and misconceptions also remain that ‘the robots are taking over’ and that human jobs will be replaced with robots and automated processes.
The reality is that those businesses that fail to digitally transform will be left behind. Startups that fail to invest in digital transformation won’t just be at a competitive disadvantage; they may struggle to survive at all, especially in a post-Covid environment. Startups operating along purely analogue lines in a digital world will quickly see themselves overtaken by the competition.
With regards to job redistribution, digital transformation does mean some jobs become obsolete – but this actually leads to more jobs, albeit of a different type, being created.
Given RPA cannot function or be configured without human intelligence, it has not yet been a source of unemployment. Rather, digital transformation methods such as RPA ensure the human staff are freed up to work on the more enjoyable tasks, or ones where human decision making and intervention is required – whilst the automated technology undertakes the repetitive, mundane jobs. The technology is there to enhance, not to replace. This means a happier, better skilled and more fulfilled workforce – not the redundancies many workers originally feared.
Being at the forefront of transformational technologies will ensure your SME is better future-proofed against both market instability and the competition, and will make your venture more attractive to a new generation of clients and investors. That is why for startups to flourish – and indeed survive – now is the time for them to embrace their digital future.