Digital transformation in the startup and SMEs world

Digital transformation in the startup and SMEs world

In recent years there has been a real revolution that has involved the world of start-ups and small and medium-sized enterprises. This revolution has, in its genesis, the advent of increasingly sophisticated and efficient technologies that have completely changed the way people think and act, their needs and their expectations.

In this constantly changing and evolving context, a key role has been played by the so-called digital companies, that is, those companies that have undertaken before and better than others a process of digitization of services and/or processes that has led them in a very short time to become leaders of markets that previously did not exist or to overcome competition in sectors where market shares have remained unchanged for decades.

Digital transformation is a process of using the latest technologies to do what is already being done, but better” (Deloitte, 2018). Digital companies therefore see innovation as a real opportunity for transformation rather than a mere technological challenge. Instead of aiming for an incremental adaptation of current practices, the goal has been, since the beginning, to transform the way in which business is done within companies.

The consequence of this is that the digital economy has radically changed the way in which businesses are structured, how they interact with each other and how consumers use goods and services or obtain information, thus undermining the traditional way of understanding businesses (Deloitte, 2008).

In 2015, TechCrunch, a well-known news site on the digital economy, observed: “Uber, the world’s largest taxi company, has no vehicles. Facebook, the world’s most popular media owner, does not create content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest housing provider, owns no real estate… Something interesting is happening.

Bloch and Segev (1996) in their pioneering work “Leveraging electronic commerce for competitive advantage: a business value framework” anticipated the three ways in which the digital economy would transform the businesses of our millennium:

  1. improving direct marketing, taking advantage of customer targeting strategies and campaign optimization techniques such as growth hacking, which, unlike traditional marketing, focuses on generating revenue rather than creating brand/product awareness;
  2. transforming organizations, forcing people there to quickly adapt to new technologies, products, services and business models and asking for more flexibility;
  3. redefining organizations, their mission and the way they operate, through the implementation of the “lean start-up” methodology that favors experimentation over planning, customer feedback over intuition and iterative design over the traditional development of “big design up front”.

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