The world is becoming more and more interconnected and global. Digitalization is of paramount importance in the current business climate. It uses technology to streamline tasks and enhance specific operations. Digitalization fosters efficiency, customer-centricity, global reach, data-driven decision-making, innovation and cost savings. SMEs that embrace digital transformation can better adapt to changing market dynamics and gain a competitive advantage, positioning themselves for long-term success in an increasingly digital world.
Awareness has been very low in the past for the benefits that could be derived from digitalization. That is slowly changing with interest growing for SMEs to leverage every possible tool to gain an advantage. Macedonian SMEs are in a great position to take advantage of the benefits afforded by digitalization.
Digital infrastructure is already in place, reliable and high speed internet is available in N. Macedonia. It is up to SMEs to utilise this resource and take advantage of all the possibilities it affords them.
A good example of how digitalization can help SMEs in N. Macedonia is e-commerce. E-commerce has been a growing segment in N. Macedonia and a good example of how embracing digitalization can help companies grow and increase revenue. According to the yearly analysis done by the Macedonian Ecommerce Association, we see massive growth of revenue for e-commerce retailers in N. Macedonia; sales in 2021 were 46% higher than in 2020, and that trend has continued in 2022 where they have seen a 22% increase in the first semester.
Benefits of digitalization
Digitalization automates repetitive tasks, streamlines workflows, and optimises processes. This leads to increased efficiency and productivity within an organisation because employees do not have to waste time on menial tasks which do not add value. By reducing manual work, employees can focus on more strategic and value-added activities, ultimately leading to better outcomes and more satisfied clients. Additionally, employees can feel more satisfaction with their work because they do not waste time performing tasks from which they do not see any benefit for themselves or their company.
While digitalization may require a big initial investment of capital and employees’ time, it often leads to long-term cost savings. For example, cloud-based services reduce the need for physical infrastructure and maintenance costs. Moreover, digital is overshadowing traditional ways of performing tasks; digital marketing is often more cost-effective than traditional advertising methods. The initial leap into digitalization may seem off putting to some, in the long term it can significantly improve the operations of any company, big or small.
Digital technologies have eliminated geographical barriers, enabling businesses to reach a global audience. E-commerce platforms, online marketplaces, and digital advertising allow companies of all sizes to tap into international markets and expand their customer base beyond traditional boundaries. The internet enables seamless worldwide communication. SMEs can leverage that to offer their services to the world and not be restricted by the boundaries or consumer base of just one country.
Challenges facing SMEs
The digital transformation of SMEs necessitates a skilled workforce proficient in utilising digital tools and technologies. However, in Macedonia, there may be a shortage of skilled professionals with expertise in industry specific areas. Bridging this skills gap can pose a challenge for SMEs. This can be done by bringing in outside experts and working with educational institutions to create new and update existing curricula to the ever changing landscape.
SMEs in Macedonia may resist digitalization due to a lack of awareness, fear of technology, or a preference for traditional business methods. Overcoming resistance to change and encouraging SMEs to adopt digital technologies can be a complex process requiring education and support. This can be done through focusing on the positives aspect digitalization brings and promoting the success stories which have embraced new technologies.
Another challenge is that some internationally available services cannot be accessed by Macedonian SMEs. For example Paypal and payment processors like Stripe and other popular and widespread services do not offer access to their services in N. Macedonia. This constitutes a barrier to the global ecosystem that needs to be overcome through adopting other similar services or by developing homegrown services.
In conclusion, SMEs can reap countless rewards from digitalization. However, there still remain challenges that need to be overcome like lack of expertise, lack of awareness, lack of available services or any combination of them. This does not mean that digitalization is impossible or hard to achieve. All the challenges can be overcome through engaging outside experts to help integrate the new solutions and through education. We see how digitalization can have a big positive impact, right now it is most apparent in e-commerce in N. Macedonia with big growth in sales year over year.
Author: Ognen Jankulovski