Digital transformation is now a major challenge for small and medium-sized enterprises (SMEs). While there are many technologies available, adopting them and integrating them into business practices can sometimes be difficult. According to an OECD study published in 2021, the obstacles faced by small and medium-sized enterprises stem in particular from their internal capacity to adopt digital technologies and integrate them into their operations. In Switzerland, observations by the Swiss Digital Center point in the same direction. SMEs that are making progress in their digital transformation pay particular attention to preparing their managers before rolling out new tools.
This reality calls for viewing digitalization from a broader perspective than that of technological investment alone. Simply purchasing software is not enough when the leaders responsible for driving change lack the necessary skills to evaluate options, interpret data, and support their teams. Digital transformation is therefore not solely a matter of information technology. It also involves an evolution in managerial practices and the skills required to implement them.
What does digital transformation really require of small and medium-sized enterprises?
Digital transformation refers to the integration of digital technologies into an organization’s various activities. It can change work processes, customer relationships, decision-making methods, and, ultimately, the company’s value creation model.
For an SME, this evolution may involve, in particular, the automation of internal processes, the digitization of customer relations, the use of data for decision-making, and the adaptation of the business model to digital channels.
However, simply implementing a technology is not enough to transform practices. An SME may, for example, deploy a high-performance CRM system without fundamentally changing the way it operates. If managers lack the necessary guidance to leverage the tool’s capabilities and evaluate its impact, the investment risks remaining primarily technical.
The question of how to digitize an SME thus goes beyond simply choosing software. It also concerns the organization’s ability to select the right technologies, integrate them into its processes, adapt them over time, and measure their contribution to performance.
This ability is built up gradually. It relies in particular on training, experience, and the opportunity for managers to apply their knowledge in real-world situations.
Operational managers play a central role in this regard. They translate strategic directions into operational decisions, support teams, and participate in the decisions that determine how new technologies will actually be used. Their preparation is therefore a key factor in ensuring that the change is successfully adopted.
The 4 pillars of a successful digital transformation
The OECD’s work on the digital transformation of SMEs highlights several key aspects necessary for a coherent transformation. Four of these are of particular importance.
- The strategy involves setting clear objectives and a realistic timeline, with the support of senior management.
- Organizational implementation involves rethinking processes and operating methods rather than simply transferring them to a new tool.
- Data and tools must be selected based on the company’s needs and identified use cases.
- Skills enable managers to understand digital challenges, make informed decisions, and support their teams over the long term.
These aspects are closely linked. A technology investment may yield limited results if the relevant processes have not been redesigned or if the people responsible for operating the new solution lack the necessary skills.
This situation partly explains why some projects may be considered technical successes while having a limited impact on the company’s operations. An SME may, for example, implement a high-performance reporting tool without changing its decision-making processes. The data is then available, but it is not necessarily integrated into managerial practices.
Investments in technology are, of course, an important component of digital transformation. However, they cannot be separated from investments in organizational development and skills development.
Why does the skills gap among managers pose a greater obstacle than the budget?
A lack of financial resources is often cited as the reason for the delay in digitalization among certain SMEs. However, the challenges may also stem from the company’s ability to define a coherent digital strategy and implement it.
A swissICT study conducted in collaboration with Bern University of Applied Sciences, cited by MTF Solutions, indicates that two-thirds of the Swiss companies surveyed have an urgent need for digital transformation, with 26% exhibiting significant shortcomings. These results illustrate the scale of the challenges companies face.
When internal expertise is insufficient, decisions may be postponed or largely delegated to external service providers. This situation can create a disconnect between the deployed solution and the company’s practices. The project may then be technically successful without producing the expected changes in day-to-day operations.
Teams may also have difficulty understanding the reasons for the change or integrating the new tools into their work practices. In some cases, old work methods continue to be used alongside the new ones, which reduces the expected benefits of the investment.
The problem does not necessarily stem from a lack of general skills among managers. However, leading a digital transformation requires specific skills. In particular, managers must be able to interpret data, evaluate technological solutions, make decisions in an uncertain environment, and support organizational changes.
These skills are not automatically acquired through managerial experience. They require specific training and regular practice.
Preparing managers should therefore be considered an integral part of digital transformation. It creates the necessary conditions for technological investments to be integrated into business practices and effectively contribute to the company’s objectives.
When managers are trained, digital projects move forward
The case study presented by MTF Solutions featuring Simon Meier, owner of an Aargau-based SME, illustrates a phased approach to digital transformation. The company was facing several challenges, including a loss of talent, more agile competition, and pressure on its margins.
The project was based on a phased implementation, the pursuit of quick and measurable gains, defining a strategy before selecting tools, and support from experts. After twelve months, MTF Solutions reported a 30% reduction in administrative workload, a 25% increase in customer acquisition, and a 35% decrease in operating costs.
This example alone does not establish a causal link between training managers and improved performance. Nevertheless, it demonstrates the value of a structured approach in which technology choices are integrated into a broader consideration of the company’s objectives, processes, and competencies.
Preparing managers enables them, in particular, to better identify the organization’s needs, compare available solutions, and assess the conditions necessary for their implementation. It also helps equip them with the tools to explain the changes to their teams and support their adoption.
Preparing managers enables them, in particular, to better identify the organization’s needs, compare available solutions, and assess the conditions necessary for their implementation. It also helps equip them to explain the changes to their teams and support their adoption.
Digital transformation thus relies on a capacity for discernment that goes beyond mere knowledge of the tools. It involves determining what needs to be digitized, when, and with what resources. This ability is one of the objectives of digital management training.
The rapid evolution of technology particularly with the development of artificial intelligence reinforces this requirement. Managers must now be able to evaluate not only the functionalities of tools but also their uses, limitations, and impact on work organization.
Research on management in the age of artificial intelligence thus shows that the evolution of managerial practices is not limited to learning new software. It also involves developing the ability to analyze the transformations underway and make appropriate decisions.
How can you structure digital skills development in your small business?
The first step is to conduct a digital maturity assessment. This helps identify the skills already available within the organization and the areas where further development is needed.
Needs can vary considerably from one manager to another. Some may be proficient with common tools but struggle to interpret data. Others may understand the strategic implications of digital transformation but lack the methods needed to drive organizational change.
Based on this assessment, the company can design a training program tailored to its priorities. For managers currently on the job, short, intensive sessions can be combined with peer-to-peer discussions and exercises based on real-world scenarios. This approach helps bridge the gap between what is learned in training and the decisions made in the workplace.
The “Digital and AI in the Organization” program illustrates this approach. Rooted in operational challenges, it aims to provide managers with the necessary guidance to understand and steer digital transformations, while maintaining decision-making authority within the company.
Two points deserve particular attention.
The first concerns the target audience for training. Limiting training to senior management may leave middle managers without the necessary guidance to implement the decisions that have been made. Yet these managers play an essential role in the day-to-day management of projects, supporting teams, and ensuring the effective adoption of new tools.
The second concerns the content of the training. Reducing training to simply learning how to use the tools does not address all the challenges. Technical proficiency with software can be acquired relatively quickly. The ability to make decisions in an environment marked by technological uncertainty, to interpret incomplete data, and to support teams through change requires a different kind of learning.
Digital transformation starts with skills
The success of an SME’s digital transformation therefore does not depend solely on the sophistication of the tools it acquires. It also depends on its ability to adapt its practices, make informed decisions, and support its teams over the long term.
Training managers is obviously no guarantee of success. However, it helps build the internal capabilities needed to set priorities, evaluate solutions, manage change, and leverage technology investments.
For an SME, the challenge is therefore not to digitize all of its operations at any cost. Rather, it is to identify the areas where digital technology can truly create value and to develop the skills needed to turn these choices into sustainable practices.
This approach involves viewing skills as an investment that complements technology. Even before choosing a new tool, a company would do well to assess its ability to integrate it, use it, and measure its impact.
With this in mind, the Change Management program offered by HEC Lausanne Executive Education helps executives and managers at small and medium-sized enterprises acquire the skills needed to lead their digital transformation from analyzing the challenges to managing change.
