By Devin Partida
The term “digital transformation” often gets thrown around in our ever-changing business environment. It’s a catch-all term that describes new and emerging digital technologies to improve business processes, achieve higher efficiencies, and satisfy customers.
Most customers expect companies to have a strong digital presence through means such as social media platform posting, a website, and quality content. However, as digital technology becomes more widely used, it can open up businesses to compliance issues.
Keeping compliance top of mind, rather than leaving it on the back burner, will protect a company as it digitally transforms. Here is how a small or medium-sized business (SMB) can ensure a smooth, compliant digital transformation, which is now essential in today’s business landscape.
Key components in a digital transformation
In this day and age, many companies deliver digital solutions for their customers, both existing and potential. According to new data from PwC, 60% of executives believe digital transformation will be a key factor in driving growth in 2022. Artificial intelligence (AI), cloud computing, 5G, and the Internet of Things (IoT) are some technologies businesses invest in to transform digitally.
Before undertaking a digital transformation, you need to identify what changes or initiatives will yield the highest return on investment (ROI). This will ensure the shift is effective in helping your company reach its goals.
These are some key elements involved in a comprehensive digital transformation:
- Strategy and leadership. No major shift can occur without identifying who will lead it. Hire the right team members and executives to collaborate on a digital transformation strategy.
- Data. Using data analytics to identify pain points in your organization will better prepare the digital transformation team to form a plan, choose which processes to streamline, and formulate other necessary changes.
- Optimizing processes. Every business has processes that can improve. The goal should be to optimize workflows, tasks, and procedures for the best outcomes.
- Culture change and communication. Preparing employees for a major culture change is crucial. While some employees may resist change, outlining the benefits of making a digital transformation or holding training sessions can help convince them to adapt and be flexible.
- Technologies. Selecting the best technologies to implement change in the workplace is crucial in any digital transformation strategy. Set a precise budget to invest in these technologies and stick to it.
- Team structure. According to Harvard Business Review, people — including employees, managers, and customers—play an important role in digital transformation. Outlining team structure will help businesses make a smooth, effective digital transformation.
- Results. Digital transformation results will be influenced by how much preparation and strategizing went into the transformation. Be willing to make more changes, especially if the business scales up.
Benefits of a digital transformation
While this is a short list of what it takes to digitally transform, it includes most of the elements needed to transform successfully. Many benefits can be reaped by digital transformation, including:
- Higher productivity and less stress
- Increased agility in the business landscape
- More business growth opportunities
- Higher chances of profitability
- Increased engagement and customer satisfaction
Virtually every business can take advantage of these opportunities to improve its operations.
Consider remote work as a factor in a digital transformation
Another reason why digital transformation is becoming essential for all types of organizations is the major shift to remote work that Americans are contending with due to the pandemic.
It’s expected that 70% of today’s workforce will continue working remotely by 2025, which is not too far away. How can businesses adapt to a remote business model without first making a digital transformation? Employees working remotely, using home or public Wi-Fi networks and their own devices, can open up organizations to more intense and frequent cybersecurity threats.
This is why it is important to ensure compliance and cybersecurity protections are at the heart of a digital transformation. While there’s plenty of information and resources available to bolster a business’s cybersecurity, what about the compliance aspect?
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How businesses can remain compliant during digital transformation
Staying legally compliant should be a priority for any small or medium-sized business looking to remain up and running. For entrepreneurs or those just entering the business environment, learning and understanding compliance may seem daunting. Here are some steps businesses can take to remain compliant during a major digital transformation:
Hire legal counsel and meet with them regularly
Legal compliance must be a top priority, and hiring the right legal counsel can provide your business with vital information to ensure compliance.
Stay updated on state and federal regulations
According to the US Small Business Administration (SBA), there are a few key areas of compliance businesses should be aware of, including:
- Internal requirements
- Ongoing state filing requirements
- Licenses, permits, and recertifications
- Ongoing federal filing requirements
The internet is chock-full of information regarding SMB compliance. It’s also a good idea to consider consulting professional services to help with compliance management. Human resources (HR) professionals are typically well versed in compliance, so use them as resources, too.
Automate where possible
Many automation services are available, such as TurboTax or QuickBooks. These services often update themselves regularly to abide by changing laws that apply to SMBs. For example, changes in accounting or tax laws are typically reflected in these types of automation software. If your organization is going to transform digitally, leveraging automation services will be an essential component of standard business operations.
Create an SMB compliance checklist
Consider creating a compliance checklist or calendar to stay organized, and keep compliance top of mind. A good compliance checklist will include HR duties, such as recruiting, hiring, compensation, payroll, benefits, and compliance. Consider reviewing this document from ADP regarding small business compliance checklists.
Centralize all company communications
The final tip to remain compliant as an SMB is to use a centralized location for all company communications. Using one platform for all communications makes interactions more efficient and less confusing for employees. Data privacy measures like GDPR and CCPA mean that companies should feel even more inclined to rely on just one platform.
Software such as Slack, ClickUp, Monday.com, Microsoft Teams, and Webex are examples of digital tools companies can leverage to improve company communications.
Digitally transform and stay compliant in an ever-changing business world
A digital transformation can be a wise decision that can improve an organization’s operations, streamline business processes, and ultimately improve the bottom line. As digital technology evolves and becomes more advanced, businesses could fail to be competitive in their industry if they hesitate to adopt new technologies.
When making a digital transformation, being compliant in all aspects of business is essential. These tips will help you stay compliant with state and federal regulations to avoid liability issues or legal repercussions.
About the Author
Devin Partida is a small business and technology writer whose work has been featured on AT&T Business, Yahoo! Finance, and Boss Magazine. She is also editor-in-chief of ReHack.com.
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