Digitalisation in SMEs: How to Decide What Really Comes First

Most SMEs do not lack ideas for digitalisation. The opposite is usually true.

The website needs reworking, customer data sits in several places, quotes take too long, employees want better tools, management would like more reliable numbers, and somewhere in the background sits the question of what artificial intelligence could mean for the company.

Every one of these points can be justified. That is exactly the problem. When everything looks important, either too much is started at once or the decision is postponed again and again. Both cost time, money and confidence.

Sound digital development therefore does not start with a list of possible systems. It starts with a business decision: which problem most limits our performance, our customer relationships or our ability to grow today?

The wrong starting question: which solution should we buy?

Software often becomes visible before the underlying problem has been described clearly. A demo shows features, a recommendation sounds convincing, or a competitor already uses a particular tool. A vague sense of dissatisfaction quickly turns into a project: we need a CRM. We have to automate. We should do something with AI now.

Yet the same technology can create entirely different value in two companies. A CRM improves little if nobody has clarified which customer information is actually needed and who maintains it. Automation does not speed up a process that is constantly interrupted by unresolved exceptions. And an AI tool creates no reliable access to knowledge if the relevant information is disordered, outdated or not approved for use.

KfW Research continues to report high digitalisation investment among mid-sized companies. That shows the movement is real. The more important business question, however, is not whether money is invested, but whether the investment produces a noticeable improvement.

Five questions that reveal a real priority

1. 1.

   Where does friction occur repeatedly today?

   Do not look for the most spectacular project first. Look for recurring friction: information entered several times, approvals waiting, enquiries getting lost, quotes taking unnecessarily long, or employees building private workarounds in spreadsheets and email. Repetition is an important signal, because small losses add up to a large burden over weeks and months.

2. 2.

   What effect does that friction have on the business?

   Not every inconvenient step deserves a project. Priority appears where the consequences are relevant: revenue is lost, customers wait, quality fluctuates, mistakes get expensive, key people are overloaded, or growth is only possible with disproportionately more staff. Linking to a business goal protects you from digitalising mere internal convenience.

3. 3.

   Is the workflow understood well enough?

   Before a technical decision, it should be clear how the process actually runs today. Not how it should run according to the org chart or a process description. Who triggers it? What information is needed? Where do exceptions arise? Who decides? How do you recognise a good result?

4. 4.

   Are ownership and use clarified?

   A system has no will of its own. People have to decide, maintain data, handle exceptions and drive improvements. If nobody is responsible for that, even a good solution slowly becomes unreliable after go-live. Future use therefore belongs in the prioritisation decision itself.

5. 5.

   Can we observe the benefit?

   Not every initiative needs a complicated business case. It does need a verifiable expectation. Should quoting time fall? Should double entry be reduced? Should customer enquiries be answered faster? Without such criteria, activity is easily mistaken for progress.

An initiative is most promising when it solves a frequent and commercially relevant problem, the workflow is understood, a responsible person is named, and the expected benefit can be observed.

Not everything has to become a large transformation programme

SMEs often benefit from a sequence of manageable improvements. One clear customer process can be worth more than a comprehensive platform. One reliable shared data source can achieve more than several new applications. A well chosen pilot can show whether an approach holds before the entire company is affected.

Starting small does not mean thinking small. It means cutting the change so the company can learn. The first step should create a real improvement and at the same time produce insight for the next one.

A simple prioritisation matrix for the leadership team

Score every candidate initiative from one to five across four dimensions:

• Business impact: how strongly does it improve customer value, results, risk or growth?
• Urgency: what happens if nothing changes for twelve months?
• Feasibility: are process, data, owners and resources sufficiently in place?
• Learning value: does it build a capability that can be reused later?

High impact combined with good feasibility belongs at the front. High impact with low feasibility is not an automatic no. It usually shows which organisational precondition has to be created first. Low impact despite easy delivery is a typical candidate for the waiting list.

Three typical wrong turns

1. 1.

   Visible instead of important

   The most visible problem is confused with the most important one. An outdated interface annoys people, while unclear ownership in the background causes the greater damage.

2. 2.

   Tool before operating concept

   The tool is selected before anyone defines how it will be used. Later the process adapts to the features instead of the solution supporting a sensible workflow.

3. 3.

   Project completion instead of business result

   Technically everything is live, yet nobody checks whether processing time, quality or the customer experience actually improved.

What a good digital foundation looks like

A good digital foundation is not the largest possible collection of modern tools. It connects clear workflows, reliable information, suitable systems and unambiguous ownership. It can be developed further because the company knows which capabilities it needs and how their effect becomes visible.

Technology is a tool here, not the goal. The goal is a company that can serve customers better, decide faster, work more efficiently and grow in a healthy way.

When several topics compete for attention at once, an honest assessment is usually more useful than the next product demo. It creates a shared picture of how leadership experiences the company today, where the biggest constraints sit and which direction promises the most effect.

Frequently asked questions

How many digitalisation projects should an SME run at the same time?

Few enough that leadership, adoption and learning remain possible. For many SMEs, one to three clearly owned initiatives work better than a long list of parallel projects.

Does a complete digital strategy have to come first?

Not necessarily. What you do need is a clear target picture, understandable priorities and rules for decisions. That guidance can be lean and still stop individual projects from drifting apart.

When should external support come in?

When the internal view is shaped too strongly by existing solutions, when several areas are affected, or when neutral prioritisation is missing. External support should increase clarity and delivery capacity, not add complexity.

Sources and editorial references

• KfW Research, KfW SME Digitalisation Report 2024
• Google Search Central, Creating helpful, reliable, people-first content

Hasan H. Hasic

Hasan H. Hasic is an entrepreneur, advisor and Key Person of Influence at wis.dom|bridge™. He combines many years of experience in the Swiss corporate and advisory world with building international, specialised teams. Delivery is carried out by the respective experts and team leads.