Digital transformation for SMEs

Digital disruption is coming for SMEs as highlighted in the recent article of Entrepreneur Media published last June. Through the survey conducted, three key areas are mentioned as critical action items for SME owners to look into. These are customer experience, processes and employee engagement.

Last Saturday was the launch of Eagle Broadcasting Corporation’s Open for Business which was well attended by SMEs, business owners and industry players. I spoke about how digital transformation is much needed in the SME space, and how some of these SMEs are already executing their strategy with it.

Digital transformation is a strategy, and it must be in place first, with sound and relevant tactics to support what could be a transition from an existing business model, to a future business model ready to tackle the changing drivers of the business brought about by technology and the dynamic base of customers available. The tactics will identify the capabilities needed by an SME to innovate. From here, a review of the digital technologies available can then be assessed to determine the kind of technology needed to address the disruption happening in this space.

On a high-level framework, there are four key areas that SMEs can innovate: First is in the operations side of the business. This is where your network, structure and processes and profit models reside. We are already seeing several SMEs providing subscription models to deliver goods and services. An example is Pinkie’s Farm based in Tagaytay where they provide a monthly subscription service to their Dairy Habit milk and yogurt products. You can use Lalamove to have the goods delivered to your home. The second area is in your products and services. An example of this is MyLegalWhiz, a start-up company that has innovated their product offering of providing a digital legal research tool that has all the Philippines’ cases from 1900 up to present. They address the tedious task of lawyers having to read and go through thousand of cases for jurisprudence, as an example, by giving that same information all digital and online. The third area is in your customer engagement. What channels are you using to make sure that your product reaches your target market? How about branding? How engaged are your customers? These are the areas where an SME can innovate and optimize the overall customer experience. One good example of this is Queensland Catering where they have adopted the use of chatbots to address customer inquiries, given the volume of inquiries they receive and the number of resources they have to support that.

Finally, the fourth area for innovation is in your people and culture. Filipinos are generally clannish when you map their cultural placement. Innovating how you engage your employees would also be a key area of innovation to ensure your business is able to address the changing dynamics within the workplace. Many factors affect these, one of which is that the workforce is already seeing four generations of employees. Having four generations of employees reflect different preferences in learning, engagement and collaboration, for example, and business owners should come up with ways that enable them to make that experience for their employees optimal.

Organizations tend to innovate in areas that show the lowest impact in the experience curve of their segments. This usually comes out, after understanding the lifecycle of their user, employee and customer experiences and mapping those journeys across all relevant touchpoints.

Kay Calpo Lugtu is the COO of Hungry Workhorse, a digital and culture transformation firm; Co-Founder of Caucus, Inc. and Deputy Director of Global Chamber Manila. Her advocacies include data privacy, financial literacy, and nation-building. The author may be reached at