Many businesses worldwide recognize digital transformation as a crucial strategic imperative. The fast-paced, ever-evolving business environment demands the urgency and importance of adopting digital technologies.
The speed at which new technologies are being developed and made accessible is unmatched. Technologies like artificial intelligence (AI), cloud computing, big data analytics, and the Internet of Things (IoT) are transforming various industries (Omol, 2023). Companies that do not adopt these technologies may fall behind their rivals.
The digital economy knows no borders. Companies are competing on a global scale, regardless of their physical locations. Digital transformation enables businesses to expand their reach and operate efficiently in the global market. Through digital channels, even small and medium-sized enterprises (SMEs) can access customers worldwide, compete with larger corporations, and participate in international markets. However, the transformation can be extremely challenging, particularly for small and medium-sized enterprises (SMEs), who may not have the competencies to run the transformation on their own, or the money to hire consultants for their aid (Kääriäinen et. al., 2023).
This article will explain the concept of digital transformation using and explaining Microsoft’s four pillars as a starting point. To be clearer, a case example is analyzed to provide a concrete illustration of how abstract digital strategies are applied in real-world scenarios. Microsoft as a company is a widely recognized partner for SMEs having a comprehensive suite of products, services, and support addressing the needs and challenges of SMEs. The transformation pillars described by Microsoft are selected for this article, for the four pillars represent a holistic approach to digital transformation, covering critical aspects of a business. For SMEs, which often have limited resources and must prioritize their investments, this framework ensures that the areas of potential impact can be covered.
The four pillars of digital transformation
To start with the definition of digital transformation, it can be stated to be a multifaceted process that goes beyond technological advancements. It radically alters how companies function, adjust, and provide value to their stakeholders. However, it is not a simple thing to do. It is not even a simple thing to define, for Kraus et. al. (2022) have identified ten different definitions for digital transformation. In this article, digital transformation is defined as a process, where digital transformation is defined to be an ”ongoing process of strategic renewal that uses advances in digital technologies to build capabilities that refresh or replace an organization’s business model, collaborative approach, and culture”. (Warner & Wäger, 2019). This definition recognizes transformation as having several sides, which all need to be addressed to succeed in the process.
According to Microsoft, digital transformation can be broken down into four pillars: engaging the customers, empowering the employees, optimizing the internal operations, and transforming the products. These four pillars are introduced in the following. First, engaging the customers means giving the customers a voice and making it matter in the business. This can even be thought to be the most important pillar in digital transformation. It involves providing products and services that meet the needs, desires, and preferences of customers. This requires a deep understanding of the customer segments and leveraging technology to personalize interactions, improve service, and create memorable experiences.
The second pillar of the transformation is empowering the employees. This means providing the employees with the resources and know-how necessary to succeed in a digital workplace. This pillar is about encouraging an innovative culture and giving people the abilities, they need to function in the digital world. (What is digital transformation? n.d.)
Thirdly, the company aims to transform its business needs to optimize internal operations. This streamlining can be done for example through automation or with data-driven decision-making. Using smart processes and advanced technology, the business becomes proactive instead of only reacting to external changes. (What is digital transformation? n.d.)
The fourth pillar in the process is transforming the products. This refers to applying digital capabilities to improve or develop new products. This pillar promotes innovation and the use of data-driven insights in creating products that adapt to changing trends and consumer needs. (What is digital transformation? n.d.)
Case: automotive company Q-Access
As an example of a digital transformation, this articlethe case of Q-Access, formerly Auto Access, a Belgian automotive company that successfully transformed its business in the digital world. The company specializes in car accessories for LCVs, Pick-up, SUVs, and passenger cars. With over 30 years of experience, it has grown into a fast-expanding international business (QAccess, n.d).
The Q-Access was selected as a case for this article, for it offers a tangible example of how theoretical concepts of digital transformation can be applied in to the real world. Second, as stated earlier, SMEs face unique challenges in digital transformation, including limited resources, resistance to change, and less formalized processes. The selected case can highlight specific strategies and solutions that are effective for SMEs. And thirdly, often the process of digital transformation is considered as a strategic change and hence, only few companies are willing to share their stories publicly. Q-Access however provides us information and insight of their transformation journey (Digitalization and complete UX redesign for Auto Accessory Company.) thus allowing a throughout analysis of the case.
Information on the transformation case is provided by the customer-centric digital product development agency Artkai, which participated in the transformation as a consultant. Here it is important to note, that the information provided by Artkai is written by industry experts and professionals with firsthand experience in guiding companies through transformation processes. Hence, they can offer unique insights, detailed information on the case that would not otherwise be available, and also practical advice that is not available in academic literature or more formal business publications. Further, digital transformation is a rapidly evolving topic, with new technologies, methodologies, and best practices emerging regularly. Articles provided by industry professionals are typically updated more frequently than academic journals or books and hence they can be seen to provide current perspectives and insights into digital transformation trends and tools, while the strength of the academic research is to provide valuable theoretical frameworks.
The company Q-Access specializes in the sales and installation of various accessories for pick-up trucks, 4x4s, and passenger cars to dealers. They started a digital transformation to boost revenues and provide more value to their customers. Their digital transformation objectives were to decrease costs on business operations, keep up with current trends and customer expectations, enter the B2C market, and expand their online catalog (4 successful digital transformation case studies for businesses to learn from, n.d.).
The transformation process at Q-Access
The analysis is carried out as a case study approach that is structured and guided by Microsoft’s four pillars of digital transformation. The method is descriptive, presenting factual information about the company’s digital transformation journey, but also interpretive, offering insights into the significance of these actions and their alignment with digital transformation principles. The analysis interprets the case company’s experiences in the context of digital transformation and challenges faced by SMEs.
To start with the first pillar, engaging customers, Auto Access recognized the need to expand its services and enter the B2C market. To achieve this, they wanted to make their website more attractive and user-friendly for the consumer clients. They focused on providing a better product search, smooth online payment, delivery tracking, and overall improvements in the usability of the site (Digitalization and complete UX redesign for Auto Accessory Company, n.d.) This customer-centric approach was crucial in their digital transformation journey.
The second goal was to increase the productivity of the marketing and sales teams. To do this, the employees needed to be empowered to recognize the needed changes. In the workshops, it turned out that the previous website was complex and laborious to administer. It consumed 80 % of the specialists’ time on manual work. To empower the employees in the change process, Auto Access digitalized part of the operations. By doing so they succeeded in streamlining the process of adding new products to the website. (Digitalization and complete UX redesign for Auto Accessory Company, n.d.)
Thirdly, it was necessary to improve the internal operations of the company. The synchronization of the product and order data between the website and the ERP system was unreliable, which made website maintenance difficult and resource-intensive. The goal of the digital transformation was to optimize these operations, making them more efficient and less resource-intensive. As a result, data integrity was also improved. (Digitalization and complete UX redesign for Auto Accessory Company, n.d.)
Fourthly, the products also needed some transformation. The company expanded the range of car parts they offered and started targeting car owners directly, which was a new target segment for them. The digital transformation included a complete redesign for Auto Access, modernizing the app for employees, and creating an easy-to-use website (Digitalization and complete UX redesign for Auto Accessory Company, n.d.) This transformation of their product offerings was a key aspect of their digital transformation strategy.
As a result, the transformation process resulted in increased adoption and use of digital customer engagement tools. The redesigned website attracted more consumer clients, and the improved usability led to a better understanding of the customer segments. The expansion of the range of car parts offered and the targeting of car owners led to a significant increase in the number of active users on the platform. (Digitalization and complete UX redesign for Auto Accessory Company, n.d.)
Further, the transformation significantly reduced the load on the call center and lowered the cost of customer service operations. By automating part of the internal operations, the Marketing and Sales teams were able to focus more on strategic tasks, thus increasing their productivity. The digital transformation enhanced the company’s ability to meet customer needs through meter data management, analytics, and alerts. (Digitalization and complete UX redesign for Auto Accessory Company, n.d.)
Conclusions
To conclude, Q-Access’s case study offers valuable insights and lessons for small and medium-sized enterprises (SMEs) who are starting or considering their digital transformation journey. The analysis of the case study demonstrates the tangible benefits and challenges of digital transformation and emphasizes the critical role of engaging customers, empowering employees, optimizing operations, and transforming products.
The lessons learned from Q-Access’s transformation journey resonate with the broader narrative of digital transformation in SMEs. First and foremost, the process is not merely about technology adoption but it is about strategic renewal and cultural change. The SMEs must navigate the digital landscape with agility, foresight, and a willingness to adapt to continuous change. The journey might not be simple and easy, but complex and challenging. Yet, as demonstrated, it can be rewarding for those who strategically leverage digital technologies to enhance their competitive edge. The future of business is digital, and for SMEs, the time to hop on this transformative train is now.