Digital Transformation and ESG are two hot topics amongst developing businesses right now. In this blog we’re going to explore why that is, and why you should know about them.
What is Digital Transformation and ESG?
Digital Transformation is the act of implementing or optimising technology within a business’ operations to increase efficiency, automate processes, and deliver actionable insights.
ESG is the acronym for Environmental issues, Social issues, and Governance issues. Organisations can implement policies, procedures, and targets to reduce the negative impact or increase the positive impact on each of these important areas.
Digital Transformation
Over the last few years, we’ve seen a major increase in businesses adopting Digital Transformation.
When coronavirus was declared a pandemic in 2020, many commerce businesses found themselves quickly adapting to online operations and implementing eCommerce platforms to enable consumers to purchase goods from almost anywhere with an internet connection. The Office for National Statistics reported that, by May 2022, revenue from internet sales had increased by half compared to 2020.
During that time came the 2021 global supply chain crisis, where we saw many manufacturers, wholesalers, and retailers implementing more robust supply chain management systems that enabled them to better manage stock purchasing by tracking lead times and projected replenishment needs.
And now – with inflation, many businesses are re-thinking their strategies. How can they not only survive through these tough times, but thrive for years to come? Thousands of business owners are using technology as a strategy to ensure the health and longevity of their business. At a top level, tech can be used to:
- Automate internal processes to free up staff time, increase productivity, and save money on wages
- Improve data visibility to unlock insights such as reporting on purchasing and suppliers to help identify opportunities to reduce expenditure
- Introduce collaborative tools such as project management or instant messenger; enabling fluid communication between various departments and resulting in a reduction of bottlenecks and waste
- Enhance marketing and growth efforts through channels such as social media
How is ESG helping businesses make more sales?
Whilst a large portion of businesses are choosing to focus on Digital Transformation in 2023, many are also electing to review their impact on the environment and set strategic goals around energy use and social impact.
With inflation, it’s becoming more and more difficult to market a business as the cheapest or best quality competitor in the market as we’re in an economy where we can’t avoid price rises. Regardless, research shows that many consumers are now considering other credentials when procuring a product or service.
Buyers have tapped into eco-friendly products as a more innovative way to save money. They are purchasing sustainable, recyclable, and durable products that last longer that the competitor, and give them a sense of pride and involvement in the suppliers’ sustainability efforts.
They are also seeking credentials such as the supplier’s energy consumption, social initiatives, B Corporation status, and staff diversity, and viewing them as attractive selling points, as well as the deciding factor when comparing suppliers. Research carried out by Deloitte shows that as many as 40% of UK consumers are actively searching for businesses with “strong sustainable and ethical credentials.”
Having ESG strategies in place are not only attractive to potential clients/customers, but also to investors and employees/applicants. Are you adjusting your business’ strategy in line with the developing economy and customer base? Have you set objectives for Digital Transformation and ESG?
ESG Technology
As an example, here are two simple pieces of technology you can implement to start your ESG journey.
Ecologi
Ecologi allows you to calculate your business’ carbon footprint for free. It does this by integrating with your accounting platform to measure your purchasing impact. By partnering with Ecologi, you could give back to the environment by funding their impact partners to plant a tree for every order placed with your business. Not only does planting trees reduce the impact of global warming by (more than) offsetting your employees’ carbon footprint, but it provides workers in impoverished regions with jobs and purpose. With Ecologi, you can set targets for change and track your business’ impact on climate avoidance by funding climate crisis projects such as forest restoration, wind power construction, and investment in renewables. If you have an eCommerce business, Ecologi can directly integrate to Shopify and other platforms via Zapier to automatically fund tree planting with every sale.
B1G1: Business For Good
With B1G1, you can give a percentage of your revenue to whichever causes are important to you and your business. This is how the platform works:
- Select a core business activity
- Such as a sale of a product, interaction with a customer or a special milestone
- Using Zapier, there are hundreds of milestones you can choose to link to an activity. For example: a document is signed with Docusign, a new customer is added in Salesforce, a survey response is received via Survey Monkey, a Google calendar item is created, a link is click on an Active Campaign email
- link a specific impact to the activity.
- There are dozens of causes you can donate to such as: textbooks for children in India, music lessons for disadvantaged children in the UK, planting a fruit tree for a family in Kenya, and supporting a beach clean-up in Indonesia.
- Display live impact counters on your website
- Use the B1G1: Business for Good branding to share your efforts with consumers
How do I start?
At Menzies we can help you decide which strategy (or combination of strategies) is best to achieve your business goals. If you feel that your business is not quite ready to kick off a full Digital Transformation and/or ESG project, we can still provide you with advice on how to determine your purpose, as well as implement and reach short term micro-goals.
Please complete the form below for a complimentary call to find out more.