Digital Transformation of SME’s in Slovenia – Status Quo and Opportunities

Day 29. June 2017

Novel digital technologies, such as cloud computing, big data and Internet of Things, are drastically changing the way business is being done. Consequentially, digital transformation emerged as a highly important paradigm that has been established with the rise those technologies. One of the most important outcomes of digital transformation is to enable more comprehensive and systematic business models while simultaneously lowering overall costs to companies. Focusing on SME’s and start-ups, one of the biggest challenges for them is going digital, with the main goal of leveraging their business as efficiently as possible. This is covered by effective transition from current business models to new, technologically advanced and user-friendly ones. The problem is that many of them are suffering from the digital revolution as they still don’t have enough competencies to cope with the challenges of digital transformation. 

Project DIGITRANS, funded by Interreg Danube Transnational Programme, focuses on these challenges. Its primary goal is to help SME’s and start-ups adapt their business models, activities and processes in an efficient way and make use of the opportunities provided by digital technologies. This will be achieved by developing an appropriate innovation method which will enable SME’s to create competitive digital business models, establishing incubator premises in different regions based on the newly developed DIGITRANS method, developing online learning content and a method tool box which will be integrated into online learning platform and, finally, teaching SME’s the skills needed to handle the transformation process by providing them appropriate trainings. The DIGITRANS consortium consists of 17 partners from 9 countries in the Danube region. The consortium represents a mixture of scientific experts, experienced practitioners, intermediaries and educational institutions all with a special focus and interest in supporting SME’s in the development of digital business models. Slovenia is covered by two partners: Faculty of Computer and Information Science, Laboratory for Information System Integration from University of Ljubljana and IRP – Institute of entrepreneurship research from Maribor.

First important mission of the project was to assess regional digital maturity. An insight into digital readiness of SMEs in Slovenia has been performed by conducting the research survey and interviews in three representative sectors: advanced manufacturing, health care and creative industry. Each sector was structured in 8 business dimensions: strategy, leadership, products, operations, culture, people, governance and technology. Estimation of digital maturity for each dimension was estimated on a rating scale from 1 to 5. Research has been carried out on 24 representative SMEs, 8 from each of three representative sectors with half of them from western and the other half from eastern statistical region. The results are presented in the enclosed infographics. To get a better overview, digital maturity of SME’s in Slovenia is also compared side-by-side with the transnational digital maturity, covered by countries in Danube region. The level of digital maturity in Slovenia and in region are comparable, where digital readiness rates of Slovenia are slightly below regional scores. Thus, overall digital readiness scores reveal average readiness, but indicate positive trends, especially in terms of technology, digital products, operation, governance and culture. However, there are still plenty of challenges on digitization especially with awareness of employees, leadership and strategy of SME’s. According to individual sectors it is obvious that digital maturity level of SME’s from creative industry is highest since SMEs in the creative industry can often be counted to the early adopters of recent technologies on the market and its products often being digital by their nature. Healthcare and advanced industry sectors are indicating lower rates, especially in terms of strategy and leadership. However, by conducting the survey and several interviews it turned out that also the leaders are becoming aware of the importance of digitization, but there are still a lot of challenges on employing proper methodology and implementation. Besides that, there is also lack of emphasis on digital strategy. 

We aim to address these open challenges by DIGITRANS project since the current status quo on digital readiness clearly indicates gaps and needs, simultaneously implying subsequent steps for designing and performing digitization methods. This project also brings important messages for crucial stakeholders. From the perspective of SME’s, we want them to know how digital transformation can improve their business. By our DIGITRANS methodology we also want to leverage the advisory services of business support organizations. We also want to make an impact on higher education and research institutions about the benefits of digital transformation. Finally, we also want to inform target groups of regional public authorities about benefits of digitization and invite them to actively get involved in the project.

Author: Sebastijan Šprager, FRI UL

Photograph source: internet
Izvedba: Mojdenar IT d.o.o.