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Digitising key areas of your business activity could help reduce costs, grow revenue and delight customers. But is greater digital transformation right for your business – and how do you start?

The COVID-19 pandemic has seen an acceleration in the adoption of digital technologies by businesses of all sizes and sectors. The need for staff to work remotely and transact contactlessly with customers has led to an extraordinary explosion in tools and solutions to address the economic and logistical challenges of lockdown.

We’ve all seen it. Video conferencing technology has become the norm in virtual offices. Businesses of all kinds have built remote sales and service teams and adapted to mobile payments. Grocery and catering businesses have pivoted to digitally enabled takeaway and delivery services as a default option.

Attitudes are rapidly shifting as to the need for technology to support growth and productivity. According to new research from our strategic partner Be the Business, for example, Britain’s smaller firms underwent three years’ worth of technological innovation in just three months of the lockdown period. Two in three SMEs now believe that technology can help improve business performance, while 60 per cent of medium businesses say they are looking to invest in technology post-coronavirus.

The ‘new normal’ is here to stay

A key point about the digital-led ‘new normal’ is that the old normal is unlikely to come back any time soon, or indeed ever. For one thing, the end of the pandemic is not easy to predict or define; localised lockdowns and dealing with a second wave are still very much with us. For another, with uncertainty about Brexit and the economy facing a steep road to recovery, the cost efficiencies that digital offers will remain essential.

A third issue is that consumers and customers have accelerated their own digital savviness too, and do not want to let go of the frictionless convenience they now enjoy in many areas of consumption post-pandemic. According to Waitrose data, for example, one in four Brits now buy food and essentials at least once a week online, while more than three-quarters purchase regular household goods from supermarket websites – up from 61 per cent last year. The UK supermarket considers this behaviour change ‘irreversible’, and has significantly increased investment in its online division, which it says now accounts for 20 per cent of its total business – up from 5 per cent pre-pandemic.

These findings are borne out by extensive McKinsey research into consumer habits and sentiment in the wake of coronavirus. In the UK, consumers say they plan to shop more online in every retail category surveyed, from alcohol to medicines to personal care. In addition, 18 per cent of consumers say they are spending more time researching brand and product choices before buying – an activity most easily done online.

Those businesses that have pivoted to accelerate their digital transformation stand to benefit from both customer loyalty and greater resilience against any shocks that lie ahead. They may well also enjoy greater competitive advantage over businesses that are slow to transform or are awaiting a return to pre-COVID ways. For those sitting on the wrong side, however, the digital divide threatens to loom wider than ever. Yet progressing in these areas need not be as radical or daunting as it might seem.

Buy, build or hybrid

Some businesses shy away from the concept of digital transformation because it seems to imply a complete overturning of everything they’re about, entailing huge organisational and operational disruption, and posing an existential threat to systems, culture and skillsets.

But as the Harvard Business Review recently defined it, at its essential level the term digital transformation essentially means ‘adapting an organisation’s strategy and structure to capture opportunities enabled by digital technology’. This is not a new idea, but what is newer is a mindset which sees that digital is no longer the realm of the IT department – but rather is now a force that can be positively applied to every aspect of a business’ value chain.

Still, digitisation can be tactical and incremental rather than radically wholesale. It may mean the deployment of a few well-chosen tools rather than huge IT investment. For example, it’s perfectly possible to develop front-end applications in an agile, modular way while incrementally phasing out legacy systems in the background. But crucially, the approach you take – whether to build your own solutions, buy them in or a hybrid – needs to be informed by a sense of digital’s potential to add much more than just functional support.

The opportunities of digitisation

Digitising key areas of your business activity can help reduce costs, grow revenue and delight customers. Here are a few examples:

1. Ecommerce:

By enabling your business to accept payments online, you can reach new customers, reduce costs and sell more efficiently. Ecommerce could allow your business to offer customers a wider range of products and promotions more efficiently, and personalise your customers’ shopping experience. Knowing your customers’ shopping habits and tastes will allow your business to market targeted promotions directly to individuals or groups.

Lloyds Bank and Lloyds Bank Cardnet offer a number of solutions which can make embracing ecommerce easier.

  • Build your own ecommerce site
    You can build an ecommerce enabled site with a simple solution such as Web In A Box from Lloyds Bank Cardnet. Working with our trusted partner, your business can build a website from scratch, enabling you to easily establish a digital presence via a website, App and social selling. Web In A Box uses simple, customisable templates with a range of themes that have an optional pre-built integration into Lloyds Bank Cardnet’s Payment Gateway. It also enables you to add a payment page into your existing web site, allowing you to increase your methods of card acceptance, including PayPal.
  • Fast, flexible payment solutions
    An omni-channel payment gateway solution offers multiple integrations to deliver fast, reliable, secure and flexible payment processing. It gives you the ability to combine your ecommerce transactions from your website, App, QR code solutions, and many more channels with your traditional face-to-face channels to allow you to have one view of the consumer whichever channel they choose to purchase through. An omni-channel solution provides your customers a seamless interaction with your business, for example utilising payment methods such as Apple Pay and Googlepay, purchasing online and refunding in store, buy again options online and many more. Lloyds Bank Cardnet can provide you with information on solutions tailored specifically to your business.
  • Secure payment links
    Some businesses can spend a lot of time and resource sending invoices and waiting for customers to pay. With Lloyds Bank Cardnet’s Pay by Link your business may also benefit from the ability to send customers a secure payment link. Using a simple dashboard businesses can generate a payment URL which can be embedded into an email, text, social message channels or QR codes. Once accessed by your customer, the link routes to a secure online payment page enabling quick, simple and secure payment via a number of card types including PayPal. There is no requirement for your business to operate a website in order to access this service, which also provides the ability to process payments remotely over the telephone and can help speed up payments.
  • Digital training
    If you want to improve your digital knowledge, the Lloyds Bank Academy offers free digital skills workshops for small businesses and charities through a virtual training programme led by industry experts and partner companies. Topics include improving the online presence of your website, social media, video and search.

2. Pre-ordering services:

Post-pandemic, McKinsey reports that UK consumers are switching not just to increased online shopping but also to other digital and low-touch activities such as videoconferencing, telemedicine, restaurant and meal-kit delivery, and online ordering for in-store pickup.

A mobile pre-ordering app such as Preoday from Lloyds Bank Cardnet can provide a business with a branded mobile and online ordering platform that can be customised to suit specific requirements aligned with business goals. Via a personal dashboard, you have a self-managed tool that allows you to communicate directly with customers, update menus in real time, track orders and see repeat customers, send push notifications and loyalty promotions, and offer collection or delivery options. With integrations with many point of sale providers, it can work with existing solutions or can operate as standalone to suit your business needs.

3. Customer service:

Digital platforms enable staff to communicate with customers across different channels, routing queries more effectively, easing bottlenecks and facilitating seamless transition between devices and channels. AI also enables a business to flag up key customer pain points and suggest the best way to resolve them.

4. Enterprise Resource Planning:

ERP systems handle processes relating to supply chain, inventory, manufacturing, procurement, risk or compliance and are designed to reduce costs, waste and manual admin and increase quality, safety and productivity.

5. Business continuity:

As businesses reboot their continuity planning in the wake of COVID-19, more and more essential IT activity will be moved to the cloud. A multi-cloud strategy can reduce downtime and improve resiliency, especially when it comes to remote working. Cloud-

6. Finance and HR:

From connected expense management and automated invoicing to remote onboarding, cloud-based automation tools can simplify a wide range of core admin functions. HR software, for example, can carry out repetitive tasks like payroll, timesheets, calculating time off, onboarding and performance management. It frees you and your managers from admin, and it might mean you don’t need to hire specialist HR resources.

7. Recruitment and supplier selection:

Uneven capacity and interruptions in supply chain are likely to continue in these uncertain times, so using analytical tools and imaginative research methods to source markets and suppliers from further afield than your traditional hunting grounds could work well for many businesses. So too with recruitment. In many areas, such as sales and customer service, activities will continue remotely, which means that new recruits no longer need to be within physical commuting distance. Business leaders are encouraged to take a ‘through-cycle’ approach to recruitment, considering not just who you need to retain to see you through the current phase, but how you can develop them for the next phase of the business’ evolution. Increased adoption of remote learning tools can play an important role here.

How to accelerate digitisation in your business

As well as driving growth and productivity, having the right technology is becoming a critical part of day-to-day operations and business resilience. But, given that almost every area of business activity could be digitised, it can be daunting to know where to focus your attention. Here’s a framework to help you plan and execute your digitisation initiative.

Review your current tech use

Start by looking at what tech you use currently. Which areas have made a significant improvement in productivity for you? What tech is already critical to your day-to-day operations? Are there any areas where staff, suppliers or other stakeholders suggest tech could make a significant tangible improvement to the way you do business?

Listen to your customers

In many sectors, much of the drive to a digital-first approach is actually being led by customers, who have learned from other disrupted sectors what tech can do for them. Factoring in customer drivers and requirements – by listening to market research, feedback and brand sentiment – can help you sharpen your priorities.

Plan and prioritise

Now look at your key business objectives and critical operations. Where are the likely biggest cost savings or revenue gains? Where are the areas of activity where you can’t afford any failure or redundancy?

What are your business priorities? For example, do they include remote working, file sharing and collaboration, digital payments, ecommerce channels or digital marketing? Can you align specific technology interventions with your business priorities? Once you have a list of priorities, you can start to build a roadmap, work through your options and compare providers.

Do your research

Now that you have a sense of where additional tech might add most value for your business, consult business networks such as your local Chamber of Commerce or UK Business Forum, which are great at sharing best practice and first-hand experience of tech adoption. Ask among your own network, especially among businesses who face similar challenges to yours and operate in similar markets. Consult online reviews for business tech solutions from sites like TechRadar, Tech Advisor and Which? TechRadar publishes an up-to-date guide to the best mobile and desktop tools for small businesses, for example. Social media sites like Twitter, LinkedIn and Reddit can also be a useful source of information on new technology.

Try before you buy

Most tech tools will provide extensive demos, set-up guides, webinars and other background information to help inform any purchase decisions you’re considering. They will also often offer a free trial, especially if it’s an app or cloud-based subscription service, so you can get a first-hand sense of what the product could do for you without committing to any significant investment.

Upskill your people

For new tech innovation in your business to succeed, you will need your people to have the skills and mindset to facilitate the implementation and business-wide adoption of new tools and processes. Assess the current level of technological competence in your business, and consider what skills and training would be required to bring people up-to-speed with the new tools you are considering.

Encourage staff to engage in training courses and e-learning around new tools and share ideas and best practice throughout the business. If you can, set aside a small amount of time each month that staff can dedicate to IT training. This will allow staff to improve their own IT skills while having an immediate business impact. You can help your people to gain or boost their digital skills with a range of free courses from Lloyds Bank Academy.

Assess your risks

New technology can help you protect your business from the ever-growing threat of cyber-attack, but also potentially introduce new vulnerabilities into your set-up. Security failures can have far-reaching and long-term consequences for your business, so make an assessment of the technology risks your business could face, and take proactive steps to mitigate and manage the risks.

As a minimum, your local network and each of your computers should have a firewall as well as anti-virus software. Ensure all of your data is backed up and that you have a recovery plan in place in case something does go wrong. Remain vigilant against phishing scams, viruses and harmful websites and have policies on acceptable IT use in place. Ensure compliance with relevant regulation such as GDPR. If you are handling financial or sensitive personal information, it may be worthwhile hiring a professional IT security consultant. For more detail on risks and remedies, see our in-depth Cyber security guidance.

It’s vital that your contingency thinking covers financial planning – specifically, what your business would do to ensure short-term liquidity if operations were temporarily disabled. Find out more about limiting the financial impacts of a cyber attack.

Manage the change

Adopting new technology impacts everyone, so communicate your plan for new technology clearly and enthusiastically to your teams. Technology failures are often a result of staff being unwilling or unable to use new technology, and the remedy may simply be a case of steering people out of their comfort zone and giving them the confidence to learn a new approach.

You can help smooth adoption of new tech through the business by ensuring employees understand the reasons behind the change(s) and, where possible, are directly involved in the change process. Listening to opinions and concerns, and adjusting your deployment as needed, will help too.

To help steer your journey to greater digital adoption, Be the Business have produced a useful checklist for Making technology and innovation change less daunting.

While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by Lloyds Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. Specific advice should always be sought in each instance.

Be the Business

Be the Business

We’re working with Be the Business to help businesses across the UK recover and rebuild.

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Lloyds Bank Academy

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While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by Lloyds Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. Specific advice should always be sought in each instance.