Digital transformation brings new opportunities for businesses

Small and medium-sized enterprises (SMEs) represent 99% of all businesses in Cyprus and employ almost 85% of all employees. This rightfully identifies SMEs as key players in the Cypriot economy.

At a time of acute challenges, the sustainability and competitiveness of SMEs largely depend on enhancing their technological infrastructures and digital services, as only in this way they will improve their operating methods, and their employee and customer experience.

Digital transformation

The digital economy encompasses various innovations and digital capabilities, such as e-commerce, digital platforms, digital payments, cloud applications, data analytics and emerging technologies such as artificial intelligence (AI) and blockchain.

Small and medium-sized enterprises (SMEs) that make full use of technology to digitise operations, can speed up time-consuming processes and solve problems, have impressive sustainability and growth results, even going beyond the borders of Cyprus.

Examining the ranking of the Digital Economy and Society Index (DESI) for the year 2022, we still find our country in the lowest ranking positions in the European Union – 20th out of the 27 Member States. At the same time, and according to DESI, 66% of Cypriot SMEs make use of new technologies and have basic digital skills, well above the EU average (55%) by 11%.

New challenges, new business culture

According to the Organization for Economic Co-operation and Development (OECD), digitisation reduces transaction costs by providing better and quicker access to information and communication between employees, business partners and customers. It can help SMEs integrate into global markets, it facilitates access to resources, and supports innovation. However, despite the benefits, many SMEs are still lagging behind compared to larger businesses - a growing gap over the last decade. In addition, smaller businesses find it difficult to access high-quality and affordable digital infrastructure. For a successful digital transformation programme, companies need to adopt a new culture that supports collaborative and flexible operating models, the empowerment of employees through digital training and upskilling, as well as new approaches to addressing business challenges.

Strategic transformation partnerships

According to the World Economic Forum, the combined value of digital transformation across businesses, to society and businesses themselves, could be greater of $100 trillion over the next 10 years. At the same time, the OECD considers it essential to encourage the training and upgrading of SMEs with operational innovation and the provision of new digital solutions, while also facilitating digitization through a series of grants, public-private partnerships, investments in research and development (R&D), transfer of know-how, etc. In such an environment, SMEs can benefit from access to new technologies and information, through digital innovation hubs, workshops, data centres, university-to-business liaison offices, etc. At the same time, the availability of e-government and online services, such as certification, invoicing, digital signatures, but also the provision of online customer or business support and the digital interconnection of businesses with public administration bodies, are important digital steps and quick wins for SMEs in their digital transformation journey.

Olympia Group invests in platforms and technologies for the digital and green economy and maintains an active interest in the field of business software and digital solutions that help businesses to take advantage of new opportunities and to transform their operations. Olympia is owned by the Folloe Fund, one of the largest private equity funds in Cyprus operating in strategic sectors for the Cypriot and European economy, such as digital transformation and ERP software, the distribution of IT and high-tech products, retail trade and energy storage, among other sectors.