Digital transformation in SMEs: process before tools

Choosing a tool is easy; changing a process is hard

When an SME decides on digital transformation, the first question is usually which software to use. This is understandable: software is a concrete, visible and obtainable solution. However, software does not by itself solve problems in the way a business runs its work. In a business where order information is recorded by three different people in three different places, new software may amount to nothing more than a fourth record of the same information.

Moving a disorganised process into a digital environment does not eliminate the disorder; it only speeds it up and makes it less visible. The first step in digital transformation is therefore not choosing a tool but understanding how work is done today.

What does starting with processes mean?

Starting with processes means making the business's core workflows visible step by step. From preparing a quotation to collecting payment, it becomes clear what information passes from whom to whom, with which tool and how long this takes. This review usually brings three types of problem to light:

• Repetitive work: Steps in which the same information is entered more than once or transferred manually
• Waiting points: Steps at which work stops because it is waiting for someone's approval or information
• Information gaps: Steps at which a unit cannot obtain the information it needs accurately and on time

During the review, it is particularly important to listen to the employees who actually do the work. There are often differences between the process as described by the manager and the process as actually carried out; informal intermediate steps and personal workarounds come to light only when the people doing the work are consulted.

Some of these problems can be solved without any software, simply by reorganising the workflow. For the rest, it is now clear which functions are needed, and tools are selected according to these functions.

Priorities: where to start?

Trying to transform all processes at once quickly exhausts the limited time and human resources of SMEs. A sounder approach is to start with the process that costs the business most in time and errors. When setting priorities, three criteria should be considered together: the benefit to be gained, the cost involved and the ease of implementation.

A limited pilot in the selected process gives the business both a visible gain and reliable experience for the next steps. The scope of the pilot should be kept narrow, a person responsible should be appointed and the baseline should be measured. Automating a repetitive task, transferring data between tools or setting up a regular report are suitable types of solution for a pilot.

When choosing the pilot process, preference should be given to tasks that are performed frequently and whose results can be seen quickly. Tasks repeated every day or every week, such as preparing quotations, recording orders or tracking inventory, quickly make the effect of an improvement visible. For tasks carried out only a few times a year, measuring the benefit takes a long time; such tasks are not suitable for a first pilot.

Data and skills: the two pillars of transformation

Once the process has been organised, the two elements that determine whether transformation lasts are data and skills. On the data side, the aim is to keep customer, inventory and order information in a single reliable source. Cleaning up existing records and bringing them into a single format before moving to a new tool often requires more effort than installing the software itself; this effort should be taken into account from the outset.

On the skills side, employees need to be able to use the new tools as a natural part of their daily work. Involving employees in the choice of tools, short job-specific training and easily accessible support in the first weeks are the main factors that determine whether use continues. A tool that is not used brings the business nothing but cost and confusion.

The growth of the business should also be taken into account when choosing tools. Whether the chosen tool allows data to be exported, whether it can connect to other tools and how its cost will change as the number of users grows may matter more than the short-term price.

Measuring the result

The benefit of digital transformation is measured not by the installation of a new tool but by how the work changes. The indicators to be monitored and their baseline values should therefore be set at the start of each implementation. Simple indicators that can be used at SME scale include:

• The time taken to complete a transaction
• The volume of repetitive or manual work
• The frequency of errors and corrections
• Whether employees use the new solution regularly

Measurement need not be complicated; a simple record kept for a few weeks is often enough to establish the baseline. Measurements after implementation are compared with the baseline values. The benefit achieved guides the choice of the next process and the updating of the transformation plan. Appointing a process owner within the business after implementation prevents the gains from eroding over time.

TÜBİAD's approach

Within the Digital Transformation and Productivity Programme, the Digital Transformation and Artificial Intelligence Directorate applies this approach through three work packages: assessment of the current situation and priorities, a limited-scope pilot, and impact and scale-up. Businesses that need free software and user support to organise their day-to-day work are linked to the Free Software and Digital Services Programme for SMEs. In both programmes, tools are selected once the business's process and data needs are clear; after the pilot, maintenance responsibility and next steps are determined together with the business.