The Business Case for Digital Integration

by Mateusz Kuczera

Published May 23, 2023

“You think it’s worth it?” asks Malenia, Ripple Construction’s president, to her partner, Alina. “I mean, they’re saying it is, and they’re experts…”

Alina immediately raises her eyebrow and answers “well, that’s exactly the problem. Since we’re not experts, how do we know that what they’re saying is true?”

“Right,” says Malenia, crossing her arms. “But look at is this way. Right now, I have to manually transfer about a hundred invoices per month from one system to another. It takes me like ten hours a month. Imagine what I could do with those 10 hours. And that’s just one of the things they’re going to automate. They’re talking about invoicing, inventory management, recurring orders. And they said there might be more things!”

“It’s true that there’s a bunch of time savings,” replies Alina. “But it’s a hunk of cash…”

“And on top of it,” continues Malenia, “there’s obviously the value of the whole company going up. And we gotta start planning exit at some point, better sooner than later. Plus, we’re not even talking about all the things we can’t quantify, like how much more organized it’ll get and how decisions will be easier.”

Alina glances at Malenia, smirks and says “are you trying to convince me?”

“I mean,” says Malenia, crossing her legs, “Kinda, I guess?”

Alina, shakes her head with a smile and says “fine. Let’s ask them to show us a demo. If we like it, let’s do it.”

“Ok I’m good with that,” replies Malenia, uncrossing her arms and legs. “Let me call them.”

Deciding whether to go forward or not with a project costing thousands of dollars is always a difficult decision for small businesses. This money can be used for so many other things, like buying a new truck or paying out dividends. However, for businesses looking to provide more independence to their owners, making operations more efficient, structuring and automating redundant tasks, or increasing the value of the business prior a sale, investing in digital technologies ultimately makes a business more effective, more profitable, more competitive, and more valuable.

Efficiency Improvements

Let’s take the simple example of semi-automating bookkeeping for purchases. Manual processing of purchase receipts, which includes adding them to the ledger, scanning, and filing, can take up to a few minutes per receipt. With a well set up bookkeeping software, despite a few operations remaining manual, processing times get to a less than a minute per receipt. For a small sized business with hundreds of receipts per month, this task can save a bookkeeper several hours every month.

Gain in Profitability

With efficiency improvements come increased profitability of the bottom line. Overhead costs will drop, and earning will of course go up. However, bringing in digital systems to a small business will provide an even stronger element to profitability. For instance, digitalizing product lists, which include prices and supplier costs, as well as cost of labour, will provide instant visibility on gross margins. And for jobs which are not billed as time and material but as lump sum jobs, a business can quickly see if the quotes it makes are accurate or too low to allow for profitability.  Without digital tools, this manual task usually takes too much time for business owners to bother looking.

Increase in Business Value

We’ve now saved time and money, and added visibility on how the business is doing financially. This in itself would justify an investment in digital technologies. But here’s yet another great reason: the business will become more valuable as well. First, there’s the impact of profitability on EBIT and cashflows, which immediately boosts the value. On top of that, digitizing will ensure that processes are well defined and well documented, easing the transfer of knowledge during a business transfer. This in turn makes the business more attractive to potential buyers, and raises its value even further. With Mondro’s proprietary valuation tools, this value increase can be quantified and helps in justifying the investment in digital tools.

Strategic and Competitive Advantage

In addition to the quantifiable benefits of going more digital, there’s numerous benefits that are slightly harder to quantify but nonetheless extremely hard to ignore. Having visibility on all of the business data almost instantly allows for quick decision making. Visibility on revenue reduction by market segment can trigger marketing actions to ensure revenues are maintained. Increases in specific expenses can also trigger cost-reduction actions. Add a little bit of business intelligence and analytics to the mix, now possible with digitized data, and strategic decisions become much clearer.

With digitalization, fast decision making on strategy challenges becomes possible, which makes a company significantly more agile in the market. And in the market jungle of highly competitive markets like constructions, being faster can sometimes make a difference between life and death for a business. It therefore goes without saying that a digitized company, more agile than one which is not, is significantly more competitive. This in turns also says that businesses which do not invest in digital technologies become less competitive and are left behind.

Improvement of Management and Organization

Then comes the improvement in general management. By having visibility on all business data and information, a business owner or general manager can easily re-direct focus and re-prioritize specific tasks and actions, making the entire management of the company much more effective. Plus, the entire business becomes more organized almost overnight. This of course brings change management challenges but brings an amazing amount of value to the company.


Justifying an investment in digital software may be difficult for small businesses. However, there are several extremely good reasons why the investment is not only well worth it, but sometimes absolutely necessary. With a digital solution correctly implemented, a business immediately becomes more efficient, more profitable, and more valuable. It is also enables to make better and faster strategic decisions, making it more organized, easier to manage, and significantly more competitive. And for companies which do not go forward with digitalization, the risk of being left behind to better competitors quickly becomes impossible to ignore.

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