soluție pentru performanța afacerii tale

Digitization – the solution for your business performance

In a dynamic and challenging economic climate, the competitiveness of a business is essential. Therefore, the benefits of implementing digital solutions often reach the top of any entrepreneur’s objectives list.

Until 2020, the advantages of digital transformation, although recognized, were slow to be adopted by the business environment. However, the context of the pandemic has demonstrated to all entrepreneurs the usefulness and feasibility of integrating key technologies into essential business processes. These bring significant potential for innovation and efficiency improvement, especially among SMEs.

The status of digital technology integration in Romanian businesses

In the European Union, the progress made by member states in the digital field is monitored annually through the Digital Economy and Society Index (DESI). Among the dimensions of this index, the integration of digital technology is a good measure of technology adoption by the business environment.

The 2022 report shows that Romania has good results from the perspective of connectivity: the proportion of fixed broadband coverage usage stands at 57%, and that of high-capacity fixed networks is at 87%, which is above the EU average. 

However, despite this local advantage, the proportion of SMEs with at least a basic level of digital intensity is only 22%, indicating a significant potential for digitalization that has yet to be exploited.

Local trends in adoptopting digital solutions

Surveys conducted this year at the request of the European Commission among Romanian companies show that approximately 36% of them focus on data analysis, while another 33% use data analytics tools. Since this can be best achieved through the use of digital solutions, it is expected that the adoption of technology will increase significantly in the coming period.

This trend is also supported by substantial non-refundable funding allocated to Romanian companies, aimed at supporting the integration of digital solutions such as artificial intelligence, data, cloud computing, platforms, blockchain technology, and digital transformation of business procedures.

Benefits of digitalization for your business performance

The Covid-19 crisis and the acceleration of digitalization processes

Companies that have survived and even thrived in the last two years have relied on cloud architecture, modern security protocols, an agile organizational culture, and a wide variety of technologies designed for business processes. 

Only in this way could they meet the specific requirements of remote work, as well as the new transactions and interactions conducted exclusively in the virtual environment, in order to avoid disruption to their usual economic activity.

On the other hand, companies, non-profit organizations, and government entities that were behind in digitization initiatives had significant difficulties in adapting to changing economic conditions and the social environment.

Main benefits of implementing digital solutions

Although the success measured by the return on investment (ROI) in digital transformation initiatives varies from one program to another and from one enterprise to another, most entrepreneurs report a series of benefits that seem to have a universal character, being connected and interdependent.

Below, we detail only a few of them. However, the ones in the list below are not the only benefits of digitalization, as others such as promoting innovation, maintaining relevance for a longer time, increasing transparency, making better business decisions, reducing human errors, and even boosting employee morale can also be mentioned.

  • Improvement of processes and increased productivity

Digital technologies streamline processes and simplify operations. For example, data analysis software collects and analyzes data faster than human resources. Employees can then use the results to make prompt decisions.

  • Reduced operational costs

Inefficient processes usually lead to up to 30% annual revenue increases in operational costs. Digitalization facilitates the efficient use of core resources, including from a cost perspective.

Increased resilience in difficult economic contexts

  • Increased resilience in challenging economic contexts.

Organizations that adopt technology and cultivate a digital culture that views change as a natural element are better able to respond to contexts in which market conditions change rapidly. Moreover, they can do so even in the case of phenomena with severe economic and social impacts, such as those during the pandemic.

  • Improved business agility

Quick and tailored responses to customer needs lead, among other things, to better customer retention and contribute to the long-term financial sustainability of the business.

  • Increased profitability and liquidity

An Oxford Economics study shows that 80% of interviewed CEOs of organizations that have undergone digital transformation processes stated that as a result, the respective companies have recorded increased profitability (through the cumulative effect of revenue growth and cost optimization).

In addition, by using digital platforms for working capital financing, companies can obtain better business liquidity. Moreover, these platforms promise to become the preferred and dominant business model in the financial services market due to the advantages they bring to their users.

 

Increased popularity of accessible financing solutions through digital platforms

Recent years have been marked by a migration of small and medium-sized enterprises (SMEs) from traditional financing solutions to alternative financing, carried out through online platforms.

Multilateral digital platforms bring together SMEs in search of financing, investors (banks, financial institutions, and other private investors) in search of profitable opportunities to use their funds, as well as other service providers – interested parties to facilitate the exchange of value within a broader financial ecosystem.

Among the financial instruments that can be efficiently accessed through digital platforms, factoring is one of the most popular, as it fully capitalizes on the digitization advantages mentioned earlier.

SMEs that use factoring through alternative financing can easily convert internally generated resources into liquidity, obtaining financing for invoices issued to customers on a very short term. In addition, they reduce their operational costs and become more agile, improving their profitability and liquidity.

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