What is digital adoption?
Read time: 13 minutes
Digital adoption is the idea of acquiring and using digital technology to meet your business needs.
Virtually every business already uses some kind of digital technology. It can range from the basic—using email—to the cutting edge such as smart robotics and artificial intelligence. Digital technology describes tools that allows businesses to create, collect (store) or process (use) digital data.
“Digital adoption is important for helping your company compete and grow,” says Jonathan Pastrikos, Director of Business Innovation and Technology at BDC.
“But as with any investment, it’s important to be purposeful about it if you want to get the full benefits and avoid costly mistakes.”
The larger you get, the more complex digital adoption becomes. You need more planning, more strategic thinking and an organization-wide perspective.
What are common types of digital adoption?
It must be noted that no two digital adoption initiatives are exactly the same, and not every business takes the same approach or adopts the exact same list of solutions.
However, companies typically follow a similar path: small companies start with free or low-cost, entry-level software to address the basic needs of their operations such as accounting, office productivity tools, and marketing, along with any needed specialty tools such as design software, project management tools or an e-commerce platform like Shopify.
As they grow to become medium and large organizations, businesses often adopt more sophisticated solutions that will allow them to manage data from several functional areas more efficiently and enable more automation and visibility.
For example, a small manufacturer may use QuickBooks for accounting while tracking customers, orders, inventory, purchasing and schedules in Excel. But as they grow and volumes increase, with more people and administration in each step, companies often seek out a stronger system or combination of systems so they can integrate or consolidate this information, while also benefiting from deeper functionality and more features.
“The progression might be compared to the different vehicles we drive in life—as a kid you start off on a bike, then you buy your first car, eventually you may need a family vehicle and then at some point, maybe you’re driving a Cadillac.”
“It’s not the same for everyone, a lot depends on the nature of your business, how complex it is, what tools you already have and the challenges you want to solve” says Pastrikos.
Why should I care about digital adoption?
Digital adoption has many potential benefits:
- Better financial performance and innovation—62% of businesses with advanced digital maturity were more likely than industry peers to report high sales growth in the prior three years, according to a BDC study. They were also 52% more likely to have high profit growth, 70% more likely to export and 329% more likely to have developed or introduced innovation.
- Improved resilience—64% of businesses said technology made it easier to deal with the pandemic, according to a second BDC survey.
- Higher productivity—60% of businesses that adopted digital technology saw increased productivity.
- Reduced costs—Half of businesses said doing so reduced operating costs.
- Better product quality—42% of businesses reported improved product quality.
Other potential benefits:
- Greater efficiency and productivity
- Improved visibility and reporting
- Increased employee retention
- Greater customer satisfaction
- Less duplication and fewer errors
- Improved competitiveness
- Increase capacity without requiring more staff
Some projects are low-hanging fruit: they can be implemented relatively quickly and easily and create a nice impact.
How to implement digital adoption
Although it has many potential benefits, digital adoption is challenging. However abandoning such initiatives is a bigger mistake.
There’s a simple fix: a little planning.
It’s important to put some planning into digital adoption. Many businesses make the mistake of acquiring technology in an ad hoc way—only to realize later that it doesn’t meet their needs or integrate well with other systems. The challenges derail many projects and even cause some companies to give up on technological adoption altogether.
The amount of planning needed depends on the size and complexity of your company or project. It can range from doing a bit of homework before signing up a team to a new task management software, to completing a deeper evaluation and ensuring alignment with your overall digital strategy, before making a significant investment and deploying for a large team. This is even more critical if you are pursuing a broader digital transformation of your business.
“Digital adoption has many more implications as you grow and become more complex.” You have to think about how the new solution will used, how it will change your processes, how it will be supported, integration or compatibility issues, employee training, change management, on-going costs, data management, cybersecurity implications, and more.
“If you have a clear vision of where you’re going and how you’re going to get there, you improve employee take-up and the odds of a successful adoption – especially when you involve them in the process.”
5 steps to implement digital adoption
1. Establish your business vision
Before thinking about the technology itself, first consider your overall business goals. Do you want to increase revenue? Or make your operations more efficient? Or develop new products or new features more quickly?
“You need a company-wide perspective to make sure your technology tools ultimately serve your business priorities and objectives,” says Pastrikos.
Pastrikos gives the example of a grocery store owner who plans to expand to new locations. “What technology can you adopt in the functional areas of your organization to help you move those big rocks?” he asks.
“You may have financial reporting needs or want to collect information from all your stores in real-time. You may need a point-of-sale system, barcode scanning, shipping and a way to unify brick-and-mortar retail with your e-commerce channel. How are you going to manage the data you’re collecting? What is the customer experience you’re pursuing? Do you want customers to be able to use an app or redeem electronic coupons? Think about what technology will help you meet those needs.”
He gives another example of a manufacturer who wants to integrate their order to product process. The manufacturer might also want to improve their production planning and forecasting for procurement, and then also update their online customer portal for better visibility and collaboration.
It’s also important to understand how you compare to industry peers and areas of potential improvement when it comes to the use of digital technologies. BDC offers a free confidential online digital maturity assessment tool that lets you gauge your current use of digital technologies. It also measures the strength of your digital culture, including your ability to implement change in the business.
2. Develop a digital adoption action plan
Now make a manageable list of priority initiatives that you think will have the greatest impact on your business. Pareto analysis may be useful to narrow down the list.
Develop an action plan for the next 12 or 24 months that lists each project, a timeline for carrying it out, who is responsible for it and milestones to gauge progress.
From the list, it can be helpful to choose a small number (one to three) of low-cost, low-risk projects to execute right away that will have an immediate impact, while causing minimal disruption for your business.
“Some projects are low-hanging fruit: they can be implemented relatively quickly and easily and create a nice impact. Executing those smaller projects helps build confidence and experience for tackling bigger challenges,” says Pastrikos.
It is important to appoint someone to be responsible for coordinating your digital adoption efforts.
“The lead can drive improvement initiatives and ask your team how projects are working out, what problems they’re seeing and what could be done better,” Pastrikos says.
There are multiple components that need to be taken into consideration and a series of initiatives. Someone needs to coordinate everything and facilitate alignment in the organization.
3. Assess and acquire digital solutions
Before researching potential solutions, make a detailed list of your requirements. Finding the right technology can be as simple as getting information online to see how potential systems stack up against your needs, but pay attention to the details.
For more complex systems, you may need to follow a structured technology selection and investment purchase plan. This can include performing a functional requirements analysis and sending requests for proposals to vendors.
4. Help your employees with the change
Like with any big change, it’s common for businesses to run into challenges when introducing new technology in the workplace. It’s important to involve employees early on and communicate well with them about the need for the change and how it will benefit them.
Also make sure to provide employees sufficient training for new technologies and anticipate how changing systems may impact existing operations.
5. Follow up (Improve continuously)
Meet your team regularly to monitor progress on adoption projects. Also think about how you can use newly acquired technologies in novel ways. Review your action plan regularly. As each project comes to an end, review and update the plan. Then start on the next improvement.
“Digital adoption is a continuous process,” Pastrikos says. “It’s not a one-time event. It’s a continuous improvement journey because the technology and your company and market are always evolving.
“The mistake companies make with digital adoption is they think they’re done earlier than they actually are, but often it’s the incremental follow-up steps that help them realize the full potential and benefits.”
As part of the follow up, the lead you appointed should be check with the rest of your people to see if there are any tweaks needed, such as additional training, report adjustments, etc.
Companies might implement the first part and think they’re finished, but often it’s the incremental follow-up steps that help them realize the full potential and benefits.
What are the challenges of digital adoption?
Digital adoption can be challenging for many businesses. Hurdles may include:
- Employee and management resistance
- Higher-than-expected costs
- Longer-than-expected implementation
- Unanticipated disruption to existing operations
- New systems not performing to expectations
- A mishmash of systems in different departments that don’t work well together
Proper planning ahead of time (see above) goes a long way to helping address these challenges.
How to get employees onboard with digital adoption
Employee resistance can spell doom for your digital adoption efforts. It’s important to involve your team throughout the process. Explain why changes are important and how they’ll make life easier for employees. Make sure to provide reassurance that you will support them.
“You want to involve key employees in each step of the way,” Pastrikos says. “Nothing’s worse than saying, ‘we went out and bought this, and you’re going to use it now.’ You’re going to run into resistance.
“Digital adoption requires a lot of effort from employees and is disruptive. If you talk with them about the change, why it is needed and how it’s going to work and involve them in the process, they’re much more likely to be ready to help you be successful.”
What is the difference between digital adoption and digital transformation?
Digital adoption generally involves a implementing a specific technology solution. Digital transformation is a bigger, more pervasive effort, that involves a series of projects to change your entire culture to put data and technology at the heart of your business.
“It’s about the wider organization rather than adopting a piece of technology for a specific purpose,” Pastrikos says.
Pastrikos returns to the example of the retail store that wants to expand. Digital adoption could involve buying a point-of-sale system or accounting software.
Digital transformation, on the other hand, would involve a rethink of the whole value-chain of the business.
“It could mean rethinking how you engage with your customers and suppliers and adopting technology so you can communicate with them,” he says.
“It could include automating processes like reordering, price changes or how you communicate with your suppliers. You could start a new line of business such as online sales. You may adopt social media to get your marketing out. You might put up digital displays or create an app for customers to use as part of their shopping experience, while in-store or out. You could install sensors or beacons so you can track traffic in your stores and personalize messaging. Transformation is a much broader effort.”
Pastrikos also gives an example of a manufacturer whose customers have demanding timelines.
“Let’s think about the issues the manufacturer faces, beginning with coming up with price quotes for a customer—how much will it cost and when will it be ready? How can my people provide an accurate quote to the client while maintaining profit margins? How can they estimate the lead times accurately to meet demand? Do we have the materials to produce it?”
“Also, how do I manage my labour and staff? How do I do a cost analysis to check that I achieved my profits for an order? How do I ensure we meet quality and traceability requirements?
The key is to tie it all together by tracking it with data. This makes sure that the manufacturer can manage a tight supply chain, as well as keep a good visibility on its production planning and procurement.
Making big changes to the whole organization is at the heart of digital transformation projects.