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4 min read

Digital business processes for SMEs: Pros, cons and pitfalls

In the EU, 99 percent of all business are SMEs and experts say they need to boost digitalisation. But how exactly?

Digital business processes for SMEs: Pros, cons and pitfalls

If you want to drive growth, enhance productivity and increase profitability in SMEs digital B2B platforms, digitalisation of business processes and data-driven business models are essential, according to the report, Big data and B2B digital platforms: The next frontier for Europe's industry and enterprises.

If you ask experts, enthusiasts and evangelists, you need to set in full force towards digitalisation - regardless if you are a 10, 30 or 200 man company.

In other words - your company holds a huge (digital) potential, which just waits to be released.

But you’re having doubts – how digital do you need to be to get results?

You already have a website, CRM, mail and a lot of other IT systems. What more would you need to digitalise to get ahead of competitors?

Maybe you're right to doubt the experts and profets. When it comes to digitalisation, it requires preparatory work, a strategy and not least time, before you see the effects.

The benefits of digitalisation are not immediately achieved
The benefits of digitalisation are not immediately achieved

In TimeLog, we help companies implement business systems to among others time registration and invoicing. Because we have more than 18 years of experience, we know how you best get started with digitalisation of business processes, and which pros and cons you may experience along the way.

In this article, we share what you need to take into account and what you need to do to be successful.

#1 – Digitalisation starts with your mindset

Digitalisation of work processes is not about (as we often hear) energising existing work processes.

The truth is that existing processes in most of the companies are based on (semi-bad) habits developed over the years.

They work, but only because people manage them. And people are flexible. IT systems, on the other hand, are not. This is why we cannot translate analogue processes to digital solutions one to one.

New IT systems are an opportunity for you to optimise your processes

Instead of thinking digitalisation as a way to retain your existing processes, see an IT purchase as an opportunity to optimise the company’s work processes.

It may take longer, but it is an investment where you get a tenfold return.

So far, so good. ”But what is the first step, when we need to optimise work processes in an SME?”, you ask.

If you would like to optimise your work processes, the first step is to map them.

Involve a few employees to ensure you get thorough insights into the processes and tasks, typically part of your company's projects.

Make sure you describe:

  1. The company’s existing work processes

  2. Where you today experience a risk of errors

  3. Which processes you would like to have

  4. Which tasks are linked to the company’s projects

Even though the company’s projects are different, you can sum up and group work processes and specific tasks linked to a project, e.g. analysis, research, project management and graphical design.

An example of how your different tasks could be summed up and visualised
Project overview

#2 – Don’t let your point of departure add limitations

Larger IT projects or purchases often start with us realising we have a problem. For TimeLog’s customers, this can be an acknowledgement of the following:

  • It takes too much time to note down and collect time registration on, e.g. Post-its or in Excel
  • We do not have an overview of profitable customer
  • We do not invoice all hours
  • ... You can probably add a few points to the list yourself

And they are good points of departure. But for larger IT projects, you need to make sure you have planned time to move from problem to potential, from tactics to strategy.

The target is crucial when it comes to implementing IT systems and digitalisation of work processes.

Because with IT systems, you get the advantage of automation, but you compromise on flexibility (you know, the part about people >< machines you read about earlier).

This, in most cases, means that you need to know what you would like to know (or gain) to set up the system correctly.

If we take TimeLog as an example, the system's core is the single-time registrations and expenses. They are gathered in projects. Each time, registration is linked to an employee and a task on a project. Projects form the basis of your invoicing, resource and project management and reports and analyses.

This means that the data you collect and the answers or data you can extract from the system are generated based on the system setup.

So when you would like to know if your company:

  • Earn the right amount of money
  • Work with the right business areas
  • Have the right pricing

You must define the system's target before it is set up.

#3 – Start simple – Grow big

It is easy to get carried away by the digitalisation atmosphere. Success stories of companies’ use of big data, small data and digital transformation sometimes paint a picture of everything needing to be digitised, and the more data you collect, the better.

However, a successful IT implementation is often limited in the beginning. And it 100% requires that the employees are on board.

Purchased and presented is halfway there

This means that when the system is purchased and presented, you have made 50% progress.

Now, employees need to be convinced, move away from old habits and get used to new work processes.

If we again take time registration as an example, a timeline for an introduction period could look like this:

Start with a simple framework for time registration, e.g. the department’s five primary tasks, two larger projects or something similar to get data into the system

  • After 1-2 weeks: Evaluate which data you get in and how you would like to use them. Then you should extend the scope or decide if you as a company need more learning time
  • After 1-2 months: Evaluate what went well and where you can optimise. You could look at:
    • Are the projects set up correctly and make sense to the employees?
    • Do the financial models match the work processes?
Timeline for implementation and optimization of new IT solution
Timeline for implementation and optimization of new IT solution

So, is digitalisation the right choice for your company?

This short answer is: Yes... when you know what you are doing and have thought through processes, targets and the organisation.

Digitalisation should not be a target in itself. If you have not done your preparatory work and mapped out and optimised your work processes, you will often experience digitised work processes as a blocker instead of an advantage – and your profit will be limited.

Avoid making mistakes when buying software.

Would you like to create a secure foundation for your next IT purchase?

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