Earlier this month, Harvard Business Review (HBR) shared an interesting whitepaper on the state of digital business in the global economy. The authors studied 42 countries across multiple dimensions of business friendliness for digital commerce. The paper used a similar framework as a previous report by the World Bank.
The paper made some interesting arguments from a public policy standpoint. However, the findings can be equally useful for small and medium size businesses that are trying to carve a competitive edge in the digital economy. Here are some helpful guidelines that the report alludes to.
Responsiveness to new regulations needs to be a top concern
The HBR report emphasizes the importance of regulatory leniency to promote a favorable digital business environment. This indicates that regulations have the potential to strengthen or cripple companies relying on digital business.
Companies can learn from this point. They can improve their business significantly by developing a compliance strategy that allows them to adhere to these regulations without wasting a tremendous amount of resources.
They may need to invest a lot in compliance upfront. One survey found that 27% of businesses spent over $500,000 attempting to comply with GDPR regulations, while another 33% anticipated spending that much by the end of the year. However, the long-term payoff should be good for companies that meet the requirements, because they can save money on both regulatory fines and the consequences of data breaches.
Developing strong relationships with contractors around the world is key
The World Bank and HBR reports both indicated that access to global freelancers is necessary to build strong digital economies. Businesses that are trying to develop a digital business model cannot afford to ignore this lesson.
There are a number of great platforms that help connect business leaders with viable contractors. UpWork, a company that was formed when oDesk and Freelancer.com merged, is a great marketplace that connects companies with millions of workers in North America, Europe, east Asia and Africa. Fiverris another company that helps forge these partnerships.
Online freelancers offer a number of benefits. One of the biggest benefits is cost-effectiveness. They are often able to do jobs they specialize in much more quickly than In-house employees. They are also able to work at lower wages if they are based overseas. Contractors with certain levels of expertise can also offer higher quality service then employees with less experience.
SWOT analysis must be a priority
All businesses need to constantly monitor internal and external threats and opportunities. Most business schools describe this process as an SWOT analysis. They have found that digital transformation services can help them reach these goals.
They need to constantly look at new opportunities to generate traffic for their online digital properties, such as their websites and social media profiles. They also need to be aware of new markets and regulations that could stifle or stimulate their business model. The digital business environment is constantly changing, so companies need to stay on top of it to succeed.
Pursue new markets with cautious optimism
Digital business has broken down traditional geographic and industrial barriers that curtailed older business models. Companies can use digital media to reach customers all over the world.
This creates a number of opportunities for businesses that want to pursue markets in emerging countries or new industries. However, they need to be realistic when embarking on these projects.
One of my colleagues recently started a digital business that sells e-commerce products to Belgium. He quickly discovered that digital marketing channels he was used to working with were barely effective at reaching people in that region. The problem is that the market was so small, that he needed to find more aggressive marketing strategies.
You should be optimistic about pursuing new marketing opportunities. However, you also need to make sure that you set reasonable expectations.
The HBR report is a great template for growing digital businesses
Thriving businesses need to understand how to make the most of digital commerce. The recent report from Harvard Business Review has shed some light on this topic.