Interview to Hernán Rodríguez, innovation and digital strategy consultant

Digital transformation for businesses, and more so for SMEs, is a challenge that sooner or later must be addressed if the survival of a company is to be guaranteed.

The pandemic has accelerated the digital transformation process in many cases. However, there is still work to be done.

In this regard, we have been able to talk to Hernán Rodríguez, innovation and digital strategy consultant, who tells us the keys and his point of view on the process of digitisation and digital transformation for SMEs.

1. Digital transformation has become an imperative for the Spanish economy and for companies to improve competitiveness. Why is this digitalisation so necessary, particularly for SMEs?

The world is moving towards a completely digital model, and we have clearly experienced this with the pandemic. Therefore, it is not that digital transformation is necessary, it is mandatory.

In this regard, customers are also becoming more and more digital and companies, if they want to continue to have a relationship with their customers, win new customers or keep the ones they already have, must be digital.

Digitalisation is a first phase, in the short term, which then leads to a deeper digital transformation, and I think this is where SMEs should be, doing in some way what they were already doing, but with digital services and tools.

In terms of digital transformation, it is something deeper. It is a complete reinvention of companies' business models and all their processes.

2. According to the latest studies on the digitalisation of Spanish SMEs [byte.es, June 2021], we are on a growing trend, although only 13% are at an advanced stage of digitalisation and 46% are at a low level of digitalisation. In what aspects do you think SMEs have made the most progress during Covid-19 in terms of digital transformation and what aspects should they strengthen?

The 2020 Digitalisation of the Society Economy Index (DESI) puts Spain in a positive position, especially in connectivity and digital public services, but it has lost scores in digital technology. There are 3 aspects that should be pointed out that are very important and where SMEs should put more emphasis:

1. E-commerce. The total volume of e-commerce sales in Spain stands at 9% compared to the European average of 11%. It has been seen that the customer is digital, that he or she buys more online and companies that do not sell digitally are going to have a lot of trouble keeping up.
2. The Cloud. The cloud is a service that SMEs have yet to discover and incorporate into their companies and it is essential because it means an increase in productivity, a very significant reduction in costs and improved agility and response rates in all processes, improving the customer experience.
3. Use of Big Data. The use of data is fundamental and SMEs, in this sense, believe that they do not generate data that can result in a subsequent benefit, but this is not the case. All the data that they can obtain from their point of contact with the customer on the web, social networks, etc. and all the data that they can obtain from their suppliers, well managed, offer information that is fundamental for gaining competitiveness, improving services and customer service.

3. Currently, many SMEs are concerned about the digital transformation process, but it is estimated that less than 25% have a digital plan in place. Do you think there is an awareness of the need to implement a digital transformation plan, and what are the advantages and benefits that SMEs can obtain by implementing a digital transformation plan?

Until January 2020 there was no need to implement a digital transformation plan, however, everything has happened quickly, and many companies are seeing that they must undertake this process immediately.

The advantages of undertaking the digital transformation process are staying in the market, having business, and keeping the company alive.

The first thing for SMEs is to start with a digitisation process, digitising basic processes such as customer communication, invoicing, or supplier management, which will offer many advantages and will save them a lot of time in administrative management.

4. What are the main keys to carry out a digital transformation process, how would you recommend an SME to elaborate its roadmap or planning for its digital transformation process, what are the main aspects to be considered in this respect and what are the timeframes to be managed when carrying it out?

Digital transformation is not a project but a new way of understanding the company. It is a continuous process.

Understanding that the market has changed, that customers have changed, and that technology has changed everything is fundamental.

Then we must consider two-time scenarios. One is in the short term, which is the initial digitalisation, and the other, in the long term, is digital transformation.

Once we have this roadmap, what we must do is execute and, the most important part, measure. Any action that is carried out now generates a lot of information and it is necessary to measure it to know if what we are doing is giving the results we expect and what changes we should implement if not. These would be the phases of this digital transformation process.

Then we would have to define a framework that can be summarised in 3 aspects: People, processes, and technology for an initial phase, and then data would be included, but always considering that everything we are going to redesign has to be focused on giving a better service and customer experience.

5. What skills do you think an SME leader and his or her team should have when it comes to tackling a digital transformation process?

Leaders must have leadership among their virtues: they must have the vision and carry out this necessary and fundamental cultural change for digital transformation.

They must be more agile, take risks, innovate, observe the market, and listen to employees, who are the ones executing these digital transformation processes, and this feedback is ultimately data that will provide us with information to adjust or change certain actions.

Measure in the short term but think in the long term. We must see what results the actions are producing, but we should not be changing every few years, otherwise the results will never come.