What Happens When An SMB Doesn’t Digitize Its Business Operations?

In today’s rapidly changing economy, small and medium businesses (SMBs) that do not adopt digital operations cannot remain as competitive as their more advanced peers. While many are processing orders online, forecasting sales with precision, and automating repetitive processes, SMBs not using cloud computing could face several missed opportunities. According to Gartner, “Organizations that embrace transformation want to do more with digitization than just build a better version of their current selves. They want net-new opportunities—and possibly to disrupt the status quo—through new revenue streams, new digital products/services, and new business models.”

In this blog post, we will look into those various implications of what happens to an SMB when it does not digitize its operations, and how focusing on the importance of adopting technology-driven solutions can directly contribute to business success.

Missed opportunity #1: Investing in technology that helps you protect and grow your SMB

Obsolete on-premises IT infrastructure can have a significant impact on efficiency, as conducting routine tasks becomes time consuming and error prone. The cost of maintaining it also steadily escalates over time, draining resources that could otherwise be allocated to innovate and support growth.

At Amazon Web Services, we know our SMB customers have limited budgets and allocating it appropriately is important. Carl Nelvig, CTO of Burt Intelligence AB—a Swedish software company—said, “If we were running our own data center, we would be spending more time on infrastructure management and not on developing our offering.” Ultimately, resistance to moving digital operations to the cloud not only limits potential investments but also exposes businesses to potential cybersecurity issues in an increasingly digital world.

Europebet, a licensed online gambling, roulette, and casino provider in the country Georgia, experienced a series of distributed denial of service (DDoS) attacks and was prone to latency issues. This caused website outages and slowed down site performance. Using AWS, it strengthened its security and DDoS protection, as well as lowered data latency. It now saves around US$20,000 a month on web host costs, has improved the customer experience, and reduced its loading time by approximately 75 percent.

Missed opportunity #2: Improving processes that lead to higher customer satisfaction

SMBs that opt against digitization might also experience diminished business reliability. Without systems in place for communication, cybersecurity, project management, and data storage, there’s a higher likelihood of errors and miscommunication among internal teams. The lack of streamlined tools in the cloud often leads to delays, missed deadlines, and an overall lack of transparency in operations. It all impacts your customers in one way or another.

Your customers may experience inconsistencies in service or product delivery, which diminishes trust and repeat sales. Without digital tools for data analysis and customer relationship management (CRM), SMBs might struggle to anticipate market trends or understand their customers’ needs, further reducing their ability to deliver consistent and relevant solutions.

For example, let’s consider a retail SMB that hasn’t fully-embraced digital transformation, file sharing, or ecommerce. They rely solely on manual order processing and lack an integrated system for inventory management. As a result, they frequently face issues with order fulfillment, leading to delays and inaccuracies in shipping products to customers. Without inventory tracking automation, there are instances where the website displays items as available but are actually are out of stock. This inconsistency in product availability not only disappoints customers but also damages the SMB’s reliability.

Missed opportunity #3: Reducing monthly IT costs

SMBs with legacy IT solutions often view it as a “cost center” that cannot be connected to business value. In recent years we’ve witnessed businesses undergo digital transformation to achieve their business objectives and remain competitive. This of course requires a move from on-premises servers, hardware, and databases to AWS Cloud. Many of our SMB customers adopt new technologies that help streamline operations, improve efficiency, and increase the bottom line. With more data accessible in the cloud it opens opportunities to use it in ways that help realize value.

For example, one of our SMB customers, Adqlo, sells social media monitoring software to companies that want to know what is being posted about them online. With AWS Cloud, Adqlo reduced their IT costs by at least 50 percent compared to traditional, on-premises infrastructure. This was made possible due in part to pay-as-you-go pricing structures. As an added bonus, they reduced staff hours up to 80 percent due to automated deployments.

Digitization is an ongoing itinerary, not a destination

IT modernization is often compared to climbing mountains: you don’t climb in a straight line, but rather choose gentle slopes and paths to reach the summit. Similarly, in digital transformation, you may consider making small, incremental steps, and move some business apps to the cloud as-is to gain better uptime and enhanced cybersecurity.

Next, perhaps you migrate larger components, such as data storage, to managed services to help contain budgets, reduce cost, and improve overall operations. At AWS we have a common saying, “Good intentions don’t work—mechanisms do.” We developed hands-on labs and the AWS Well-Architected Tool. Available at no cost in the AWS Management Console, the Well-Architected Tool provides a mechanism for regularly evaluating workloads, identifying high-risk issues, and recording improvements. This is valuable whether you are fortunate enough to have in-house IT talent or work directly with a managed service provider.

AWS offers the building blocks to help you avoid missed opportunities

AWS offers a robust suite of cloud computing services that can significantly aid SMBs in their journey toward digitization. By migrating their IT infrastructure to the AWS Cloud, SMBs can use scalable and cost-effective cloud-based solutions to:

• Secure their businesses
• Serve customers
• Gain insights
• Implement automation through AI

All these services are available on a pay-as-you-go basis, offering flexibility and scalability, that allows SMBs to adjust resources according to their evolving requirements. Whether it’s scaling up during peak periods or downsizing during slower times, AWS can accommodate these fluctuations, ensuring optimal performance without overpaying for unused capacity.

Three steps to conceptualize IT transformation

At AWS, we view transformation in three main phases: assess, mobilize, and modernize. This helps non-technical SMB leaders understand what is at stake without technical jargon. It also simplifies the process for those apprehensive about what lay ahead.

Assess

In this initial phase, we help SMBs assess their workloads, systems, software, and IT infrastructure as they plan to migrate onto AWS. Without this crucial phase, you might miss out on cost or operational savings.

Mobilize

Next, everything is fully migrated with AWS migration tools and services. If your SMB doesn’t have any IT staff, you can get a free consultation with an AWS Certified expert to determine how much third-party support you might need.

Modernize

In this third and final phase, after successful migration, you can determine what your future vision is. If you have an AWS account team, we can work with you to further reduce costs and improve overall operational efficiencies. If you prefer working with a third-party expert, they can also provide similar services. Once fully migrated and modernized, SMBs will be able to minimize the burden of maintaining outdated hardware, software, and more.

Next steps

There is no reason to fear IT modernization, because it only delays your business from reaching its full potential in a digital world. AWS Cloud can help enable SMBs to focus on innovation, agility, and growth without maintaining obsolete systems. It is time to shed the constraints of legacy systems and use a scalable, cost-efficient cloud. Learn more about the value of migrating to the cloud on AWS Smart Business.