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A Guide to How Digital Transformation Empowers SMBs to Cut Costs Effectively

digital transformation

The realm of business literature champions the cause of digital transformation with unwavering enthusiasm. In the current economic climate, characterised by unprecedented global layoffs, the imperative to reevaluate operational strategies and implement astute cost management practices has never been more apparent. 

Digital transformation emerges as the beacon of hope amid these challenges, aligning with advancements in the business and technology sectors. For small-to-medium businesses (SMBs), navigating the intricate landscape of digital transformation is not merely about cost-saving; it’s a strategic operation vital for survival and growth. Delving into the pivotal role of technology in cost reduction for businesses, this exploration seeks to provide insights into the nuanced world of digital transformation. 

Deloitte’s findings affirm that SMBs embracing digital transformation with a progressive mindset can catapult their growth trajectory, outpacing competitors hesitant to embark on the digital journey. As we unravel the layers of how digital transformation contributes to cost management for SMEs, the focus remains on fostering a mindset that transcends mere survival, steering businesses toward thriving in an ever-evolving landscape.


To provide additional context highlighting the disparity between digitally adept and less sophisticated businesses, the collaborative study conducted by Deloitte and Google, as referenced earlier, revealed a noteworthy insight. 

Specifically, small-to-medium businesses (SMBs) embracing a digital mindset exhibit a remarkable 21% surge in gross profits. This acceleration in profitability can be dissected across three fundamental business pillars, underscoring the imperative for digital projects to strategically target cost-savings. 

It necessitates a conscientious approach, recognising the interconnected dynamics of digitalisation across Management, Operations, and Strategy.

1. Digital transformation holds the potential to streamline management costs significantly. 

With a pragmatic and well-researched approach, small-to-medium business (SMB) leadership teams embarking on digital transformation can realise cost-saving advantages through the following measures:

Reducing persistent project costs, such as those associated with phone calls, including hardware, installation, and maintenance. Shifting from conventional hardware telephony to zero-hardware cloud-based softphones can mitigate calling expenses and render certain workflows either redundant or self-sufficient.

Eliminating daily administrative tasks for sales and support teams: By alleviating substantial management costs, automating manual responsibilities like CRM administration further reduces the need for extensive best-practice training.

Enhancing performance accountability: The ability to assess team performance in real-time becomes feasible. Performance tracking analytics emerge as a potent and practical option in achieving this objective.

To augment management cost savings, cloud-based technologies like Nuacom are specifically crafted to empower non-technical managers to operate independently, minimising the necessity for major IT interventions. This feature is particularly advantageous for SMBs prioritising resource efficiency.


2. Digital transformation can yield operational cost savings, and these savings in management workflows have a cascading effect on operational benefits. 

The process involves some key steps:

Process auditing: Examine the duration operations and IT spend on phone-systems configuration, maintenance, and reporting. Conduct a thorough audit with process owners to understand the cost of each workflow.

Cloud process migration: After auditing operational processes, identify those suitable for streamlining through cloud migration. Determine which online services and technologies have a proven track record in enhancing the cost-efficiency of these processes.

Process optimisation: Having moved problematic processes into the cloud to reduce excess operational costs, the next step is to optimise these new digital workflows for additional cost savings.

The combined impact of process auditing, cloud migration, and optimisation should radiate outward, providing managers with increased autonomy and enhancing team productivity.

In our examination of the business cost management benefits associated with replacing traditional telephony with Nuacom’s zero-hardware cloud-phone telephony (as an option), SMB teams can achieve a remarkable reduction of over €1000 per user in maintenance and calling costs, resulting in overall savings amounting to massive savings per user per year.


3. Ultimately, digital transformation extends its cost-saving benefits to strategic aspects, but this outcome is contingent on the successful execution of the initial two stages. 

While we’ve explored how digital transformation can reduce costs in management and operational workflows, it’s crucial for these efficiency gains to have a lasting impact on the broader business. This is a stumbling block for many SMEs embarking on sustainable digital change. Localised implementation of cost-saving measures, divorced from an overarching strategy, often results in benefits that lack widespread influence.


This scenario can lead to cost management fatigue, impeding collaboration and decision-making. As digital projects falter due to a lack of strategic guidance, aligning business leaders around proposed incentives for digital change becomes increasingly challenging. The solution, though straightforward on paper, necessitates active collaboration among leaders in management, operations, and strategy.


When contemplating new digital technologies:

Engage with peers in those departments to precisely map out how cost-saving benefits in management and operations workflows will translate to strategic gains.
Develop a strategy for targeting specific costs for elimination, freeing up finances for reinvestment in positive, strategic areas. For instance, consider allocating funds to product development for expansion into new markets and increased competitiveness.


Consider the scenario of replacing high-maintenance telephony hardware with a zero-hardware virtual phone solution. A recent study revealed the business impact of introducing technology, indicating substantial cost-savings:





Year 1
Year 2
Year 3

If these cost-savings were realised in both Management and Operations, how would you strategically reinvest these funds? 

Whether it’s devising a new customer strategy, investing in team training, directing funds towards research and development, or fuelling product development, having these answers before investing in new digital technologies is pivotal for experiencing the long-term benefits of digital transformation cost-saving.

Your ultimate objective: Attaining Digital Maturity

At its core, digital transformation for SMBs revolves around one overarching goal: achieving digital maturity. Throughout this journey, the collective mindset of your executive teams should center on two fundamental aspects—enhancing service for existing clients and gaining new customers.

While this might seem ideal in theory, it’s crucial to take gradual steps before accelerating the pace. The realisation of digital maturity becomes evident when all your essential business drivers are digitised. Until that pivotal moment, advocating for digital change with a customer-centric mindset proves instrumental in garnering support from C-level peers.

Once consensus is achieved, SMBs can embark on the journey towards digital maturity, creating a distinct advantage over digitally hesitant competitors. In a benchmark insights survey, Deloitte uncovered that digitally mature businesses are more likely to achieve various goals, including customer satisfaction, product quality, long-term financial performance, and gross margin.

As Deloitte aptly phrases it in its insights survey:

"Digital transformation is about both doing old things better, faster, and cheaper and doing new things that weren’t possible before. In some ways, cost savings and efficiency are the low-hanging fruit of digital transformation." — Deloitte


This underscores the significance of digital transformation for SMBs, allowing them to break free from competition and stand shoulder to shoulder with larger players. Cultivating a “save to thrive” mindset, focused on achieving digital maturity, represents the most sustainable route for SMBs to foster growth.

Final Word: Three Horizons to Reduce Base Costs


For ambitious SMBs and C-level teams, the key takeaway is clear. Regaining control over day-to-day operational costs serves as the gateway to unlocking finances for more impactful investments in growth. Digital transformation across daily management, operations, and strategy plays a pivotal role in distributing cost control uniformly throughout the business.


If you’re an SMB business leader advocating for digital change, consider presenting a case grounded in rational, sustainable transformation with the three “R’s”:


1. Reduce Short-Term Costs: 

Commence by investing in digital initiatives aimed at achieving immediate cost reductions without significantly altering management, strategic, or operational models.


2. Replace: Out with the Old, In with the New: 

Once the effectiveness of short-term cost reductions through digital transformation is demonstrated, shift focus to medium-term cost reductions by substituting legacy technology costs with more budget-friendly digital alternatives.


3. Rethink: Targeting Big Cost-Savings: 

Having already experienced incremental savings on your journey to digital maturity, it’s time to pursue substantial savings. This involves strategic changes that redefine the concept of “efficiency,” not just in day-to-day operations but also in long-term cost reductions that scrutinise technology architecture, processes, and overarching operating models.

Need some open-ended questions to ask your prospects? Check out The Sales Engagement Guide for some great examples! 

Ann Jones
Greetings! I'm Ann Jones, a dedicated content enthusiast at Nuacom. As part of the Nuacom team, I'm committed to sharing insights about seamless communication, innovative solutions, and the ever-evolving business landscape. Join me on this journey as we explore the world of tech and connectivity through engaging blog posts. Let's connect, learn, and inspire together, right here at Nuacom!

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