SME's are falling behind on Digitalization

There are both extensive and quick profits to be made for Danish SMEs by digitizing more of the administration and operations and utilizing the data that can be collected.

While most Danish companies are digital front-runners, some Danish SMEs still need help to get off the ground. According to the business organizations The Confederation of Danish Industry and The Danish Chamber of Commerce, the explanation is, among other things, that it can be challenging to decide where it makes the most sense to digitize and to find your way in the jungle of digital services.

”All companies know that they need to digitize, which is crucial for competitiveness. But, many are unsure which parts of the business they should start with. There are a myriad of digital tools that can help you. Still, few have the prerequisites to know if the individual service fits the company's needs,” says, Frederikke Saabye, Chief Consultant at The Danish Chamber of Commerce responsible for digital members. 

Select one area

The way forward is to take digital steps precisely where you feel the greatest appetite. Which part of the business you choose is less crucial, says the Confederation of Danish Industry, and it can be a straightforward process.

”There are many opportunities to do it smarter with digital aids. You can't digitize the entire business at once, so choose an area you have an appetite for. For some, it is easy to get started; for others, it is more complicated. Whether it is a new system for bookkeeping, resource management or customer management is less important,” says Head of Digitalization Policy at the Confederation of Danish Industry, Andreas Holbak Espersen. 

Digital tools targeted at SMEs

In recent years, a large number of digital tools have emerged. They can help with everything from bookkeeping and law to climate action, employee satisfaction, and retirement. The services are characterized by being Software-as-a-Service (SaaS) with relatively low prices, and they are mainly aimed at SMEs. The solutions can facilitate administration and optimization in some areas and thus also remedy the general lack of qualified labor.

”Digital services for specific tasks are growing rapidly, and many products on the market can create value and make everyday life easier. The solutions are typically not tailored but may fit 80-90 percent because most SMEs usually have the exact needs. They are cheap because you don't have to buy the rights. Still, you pay on an ongoing basis, and they are extremely easy to cancel again,” says Andreas Holbak Espersen from the Confederation of Danish Industry. 

If, on the other hand, you fundamentally want to change the company in a digital direction, you should, according to Andreas Holbak Espersen, seek advice from professionals.

In recent years, more than 3.500 companies have received funding from the Danish state's subsidy pool SME:Digital for digital advice, investment support, and skills development. The scheme has contributed to Danish SMEs not only digitizing and automating unthinkingly but where it creating the most significant value and supporting the company's growth ambitions and digital strategy.

”SMV:Digital can help create a business case that shows, for example, that your investment has paid off in three years. It provides quality assurance, and the decision to automate or digitize production or operation becomes easier to make,” says Frederikke Saabye from The Danish Chamber of Commerce. 

navigator provides an overview of the various options

Another tool that can guide small and medium-sized enterprises on the digital journey and be a ’growth enabler’ is kompasbank's digital marketplace, kompasbank navigator. Kompasbank already helps SMEs with tailor-made financing solutions and banking products. With the new platform, small or medium-sized enterprises will have access to many specialized digital partners who can help with everything from administration, reporting, and law to sales and marketing.

”We have a burning desire to be there all the way for SMEs. This applies to flexible financing but also, to a large extent, to digital development. Based on our new digital toolbox, we will be an advisor and an accelerator on the digital transformation that many SMEs are in the middle of, thus supporting their development and growth ambitions,” says founder and co-CEO of kompasbank, Michael Hurup Andersen.

Business organizations welcome services that can help SMEs gain an overview of and access to the many digital services.

”Few SMEs have what we call integrators, i.e., employees who have both business and digital understanding. Therefore, it can be hard to figure out who has a service that suits one's needs and creates value,” tells Frederikke Saabye from The Danish Chamber of Commerce.

”All solutions that can make choosing digital solutions more manageable are good. It's about being presented with the existing options, without using too many resources - and then trying some of them out and seeing if they provide value,” says Andreas Holbak Espersen from the Confederation of Danish Industry. 

A digital megatrend has emerged

Regardless of the size of the company and the industry you operate in, there is no way around digitizing more and more. Customers also prefer the most digital companies. In addition, the customer data you can collect and use is an increasingly important competitive parameter. 

”The expectations for your digital capabilities are increasing. The megatrend for all companies is that you must be intelligent, fast, and digital, regardless of whether your customers are end users or your business is B2B. Even when choosing a window cleaner, we typically go with the best website because it shows us that they are ahead of the game,” says Anders Holbak Espersen.

In a new survey among decision-makers in Danish SMEs conducted by Norstat for kompasbank, more than four out of 10 (42%) SMEs express that the company experiences problems with administrative tasks and the time they spend on them. At the same time, 56% of the respondents believe that it is easy or very easy for the company to get started with digital tools, while only 11% find it challenging to get started. 

How to accelerate the digitalization of your business

• Embark on your digital journey now - otherwise, it can damage your competitiveness in a short time.

• Start with a single defined area in production or operation.

• Choose the area of the business you are most passionate about and where you see the most significant potential in digitizing.

• Try one or more digital services on a subscription basis. If they don't add value, you cancel them again.

• Apply for funding from SMV:Digital for an advisor who can help identify where it makes the most sense to automate or digitize.

• Get a better overview of the many specialized digital services through platforms such as kompasbank navigator.