PEOPLE | Aug 28, 2019

Digital Transformation makes its entrance in SMEs: an interview with Luca Carbonelli

How can you make digital technology “explode” in a micro or a small business? What are the leverages and what the advantages?

That of Luca Carbonelli and of Caffè Carbonelli is a story of a micro, family, enterprise, as he defines it in his recently published book Falla esplodere: come una piccola impresa può affrontare la trasformazione digitale (Make it explode: how a small business can tackle digital transformation). A company linked to traditions, with a beautiful story behind it, as there are so many in Italy. One of those companies about which one usually thinks “they do not embrace the digital world because they do not feel the need”, but that instead set an example and trace the path for other companies, ready to “explode”.

What led your company to transform itself through technology? Where does the perception of the need for digital transformation come from?

“Need and recklessness. During the early years of the new millennium our company was going through a rough patch. We had lost many customers and at the time our market was strictly local, so on the one hand we had the need, the requirement and the necessity to seek out new market channels and on the other, fortunately, the contacts and that little bit of experience of “new technologies” which allowed us to test whether coffee could have a certain appeal for e-buyers. And fortunately, the answer was positive”.

How do you break down those cultural boundaries which often prevent entrepreneurs from investing in technology? What in your opinion could be the role of the Government or of the trade associations?

“Cultural boundaries are brought down with training. Creating a “business school” for small businesses is an absolute necessity. Millions of small Italian entrepreneurs are managers in all respects, but they don’t know they are; they improvise their activity on the basis of a limited level of preparedness. Trade associations have a huge responsibility on this issue and are already tremendously late. If the associations wish to survive and at the same time to offer their members useful services which justify the cost of the membership fees, they must create serious training schools as soon as possible, with lengthy and appropriate courses, and not stop at single, one-off seminars. The Government should instead allocate funds to help small entrepreneurs, first to undertake this training, then to hire in the company the human resources which the entrepreneurs, thanks to that training, will understand to be necessary for the growth of their company”.

What are the possible incentives needed for micro and small Italian companies who wish to embrace the digital world?

“We really need incentives which allow us to hire resources within the company, but rather than incentives, I hope for a net reduction in labor costs. We also need financial incentives which offer entrepreneurs the possibility of increasing the size and turnover of companies with subsidized purchases of new buildings and new machinery”.

The book speaks of “customer education”. What does it mean and what role does it play in transforming the business?

“Customer education, which is also the title of a paragraph, makes me smile as it wants to be a provocation, even if behind this thought there are two of the most real dynamics of B2B trade: on the one hand we talk about that harmful mechanism according to which the supplier must offer the customer the possibility of paying for the goods months after their purchase, on the other hand the average retailer’s lack of culture as regards all that is the digital market rears its head again. In this case, almost in 2020, we still have to begin discussions in order for customers to understand that e-commerce, “the monster”, can actually be a benefit for everyone, and that, if the business strategies are well-prepared, there will be no greater competition on the products than the classic competition of the traditional market. Personally however, I think it’s time to end this distinction between the traditional and the alternative market. The mere fact of talking about it should make us understand how much we lag behind on the matter”.

Amazon, new friend or foe of the small retailer and why?

“I wrote it clearly in my book and I also clearly indicate it in my training courses. Amazon can be the new commercial partner for businesses. The most powerful. It is only necessary to study all the mechanisms and services that it can offer, and to shape these according to the potential of our companies and our products”.

Based on your experience, which technologies should you look at carefully in the retail sector?

“I have been pointing out for years that the era of distinguishing between B2B and B2C is over, precisely because e-commerce has become so widespread and will continue to expand so that even B2B transactions will take place in an increasingly automated manner. It is no coincidence that Amazon introduced the “Amazon Business” service over a year ago, which enables this type of relationship (B2B) to be carried out also on the platform, with benefits for the parties involved. In this sense, the average amount of online transactions will increase exponentially. It will therefore soon be necessary to go beyond the classic credit card payment and to get used to authorizing SEPA direct debits.

But we are getting too much into technical details. I would like to close with a quote from the book: The market has never been as free as in the era of Amazon”.

Sonia Montegiove