SMBs: What You Need to Know About Digital Transformation and Scalability
For large enterprise companies, processes that bring change or transformation are closely tied to profitability. In contrast, transformation for small-to-medium businesses (SMBs) is synonymous with survival.
Digital transformation can greatly impact small-and-medium-sized hospitality businesses by lowering operational expenses and increasing bottom line performance, while also building upon the overall guest experience. Additionally, it can improve the quality of products and services being offered, and even increase the business’ online presence.
We sat down with Jon Squire, Founder and CEO, CardFree, to discuss how, as more SMBs in the hospitality industry undergo digital transformation on some level, it is imperative that they do this with the right technology partners that allow them to not only pivot for the short-term, but scale and grow long-term.
Having experienced working with large enterprise companies, how can your knowledge bring specific insights to SMBs helping them to improve their bottom line?
For large enterprise companies, processes that bring digital transformation are typically closely linked to efficiency and profitability. This type of evolution can impact SMBs in those areas as well, but in the minds of these owners and operators, implementing these solutions is more synonymous with survival and longevity. As SMBs expand and begin to think about the longevity of their operations, it’s important to keep in mind when working with middle market businesses to tailor your approach to their specific needs and limitations. These establishments may not have the same level of resources or expertise as larger companies, so it's important to provide practical and actionable advice that they can implement with their existing capabilities.
What role does new technology play for SMBs?
Ultimately, they need technology that is going to increase the strength of their business and make them more efficient, while still meeting the needs and expectations of their staff and customers. So, whether that means implementing all new technologies at once or slowly in more of an a-la-carte manner, each business’ digital transformation journey is going to look different from the next.
How do SMBs undergoing digital transformation positively affect both the staff and customer experiences?
Things that the staff could do before can now be driven by the customer themselves. By utilizing technology solutions, SMBs can empower their customers to take more control over their own experiences, which can in turn drive staff efficiencies and support their jobs. For example, self-service kiosks, mobile apps, and online ordering platforms can enable customers to place orders, make payments, and customize their experiences without needing to interact with staff directly. This can help reduce wait times and improve order accuracy, while freeing up staff to focus on more complex tasks and providing higher levels of customer service.
SMBs have been looking for technology solutions that are affordable, easy to use, and can be scaled up or down as needed –– what did you see was the catalyst of this movement towards digital transformation?
Many SMBs were forced to quickly adopt technology solutions at the beginning of the COVID-19 pandemic to stay afloat. However, in many cases, this resulted in a patchwork of disjointed solutions that were not effectively communicating with one another. SMBs were having to pay additional expenses and found it extremely complex to manage the technology stack.
What is the biggest obstacle preventing SMBs from undergoing digital transformation?
The majority of SMB hospitality establishments are playing catch-up from the time they open their doors, trying to keep up with the technology offerings of the mega-chains. SMBs also struggle to navigate their payment processing negotiations from the start –– meaning they get locked into a transaction agreement with their POS provider that may not always align with their long-term goals and growth –– and in the worst cases, negatively affect their bottom lines.
From a payments solution POV, what are some of the biggest differences you’ve seen in terms of the needs of the different sized businesses?
The biggest difference I have seen is that large businesses have more power to negotiate processing deals, processing flow, and who they work with on the payment side. Ultimately, the key to a successful digital transformation journey for SMBs is to take a strategic approach, focusing on solutions that will deliver the most value for their business and aligning their technology investments with their long-term growth goals. It's also important to keep in mind that digital transformation is an ongoing process, rather than a one-time event. As technology continues to evolve and new solutions become available, SMBs will need to continually reassess their technology stack and consider how they can leverage new tools to improve their operations. It's important for businesses to carefully evaluate their payment processing requirements and choose a solution that meets their specific needs, whether they are a large enterprise or a small business.
What should SMBs look for in a digital transformation partner?
For SMBs, finding an ordering and payment solutions partner that offers services to not only integrate with your existing systems, but also takes the time to get to know your goals and aspirations as a business is going to be the best move for your budget and your day-to-day operations. Sure, there may be a significant initial investment, but if you have the foresight to look beyond that initial dollar sign on the page, the efficiency that the technology will bring you will benefit your business long-term.
What is the biggest takeaway owners should know about bringing digital transformation and scalability to SMBs?
The biggest factor that will undoubtedly contribute directly toward SMBs bottom line is implementing a solution that allows for the integration of its existing vendors and solutions into one clear and easy-to-navigate view –– allowing the staff member to view all order and payment avenues from one centralized place. These technologies are going to give SMBs the leg up on some of the larger chain establishments, making them more accessible and approachable and allowing the customer to drive their experience like never before.