Digital Transformation for Midsize Companies
The recovery we’ve experienced in 2021 has been uneven and continues to be challenging. It is no different for mid-market companies. When looking at companies between $10 million and $1 billion in annual revenue, one driver of growth is digital acumen. So how can you create digital transformation for midsize companies?
Beginning in 2012, the National Center for the Middle Market (NCMM) started tracking the performance and sentiments of mid-size companies. Looking at the data for 2021, average revenue at mid-size companies had increased. However, while 45% of the companies had growth of 10% or better, 34% of the companies were either flat or experienced declining revenues.
According to a recent Harvard Business Review (HBR) article, mid-market companies that develop a clear and comprehensive digital approach and use it to inform their strategic decision-making are able to grow 75% more quickly than their less digitally literate competitors.
During the pandemic, every aspect of business accelerated their investment in technology out of necessity. While companies are adopting more technology, that doesn’t always translate to a thoughtful digital transformation effort. According to the article, 46% of mid-market companies claim to have a digital roadmap built into their strategy.
One of the challenges mid-market companies face is resource constraints. Adopting technology is an ongoing process that requires a commitment to spend, and budgets are often limited. In addition to budget constraints, digital transformation requires dedicated personnel and time to focus on the initiatives.
Even for the companies that have a cohesive digital transformation approach, the skills gap they face is preventing them from making more progress. To help with this, the NCMM created a framework for mid-market companies to support their digital transformation efforts. Of five dimensions of business activities: What We Sell, How We Produce It, How We Sell It, Our IT Backbone, and Our Workforce, the two primary challenges that can help mid-market companies with digital transformation are How We Sell It (Customer Engagement) and Our Workforce (Employee Engagement).
Customer Engagement
According to the article, mid-market companies want to improve their digital adoption to address the customer experience, improve lead generation, and increase their use of marketing tools. Below are some best practices to point you in the right direction:
- Place greater importance on integrated multichannel marketing and sales, finding the right mix of online and offline marketing, sales, and service.
- Develop a more functional website that connects customers with employees and offers support for products and services.
- Increase online interaction with customers (website, social media, mobile).
- Use a variety of digital customer experience and analytics tools.
- Use technologies that support the sales force, such as CRM systems and social media.
- Work toward an omnichannel, end-to-end digital experience on all platforms and channels.
Employee Engagement
The ability to find, attract, engage, and retain employees has become more difficult recently. And the pace of technological advancements makes it even tougher to find people who possess the desired digital skillsets. Below are some ideas to help you address these challenges:
- Make a concerted effort to invest in people with specific digital expertise and be willing to pay a premium for the right skillsets.
- Adopt the latest and best technology and digital processes, including using digital platforms for employee goal setting and performance management and using mobile apps for talent acquisition.
- Take a strategic approach to realigning the workforce and deciding which activities can be contracted to outside specialists in order to combat the digital skills gap.
- Provide career training and development and clear career paths.
Whether you’ve already tried some of these suggestions, or found other best practices for digital transformation, send us a note and let us know what’s working for you.