Much of the writing on Digital Transformation follows a well-trodden path, describing the technologies that make up the digital landscape or the classic examples of industry disruption. Industry “disruptors”, Uber, Airbnb, Netflix, Amazon etc provide inspiring stories for some but sleepless nights for others. The “disruptors” invented new business models underpinned by great technology. They motivate the millennial generation to work for start-ups rather than large corporations and provide a burgeoning weight of case studies for business schools.
These are exciting times, but the risk for businesses is that they focus too much on digital technology and not enough on the business problems they need to solve. Turning Digital Transformation on its head means start with the business problem and then apply the “best” digital technology to solve it. And never forget the adage - technology alone rarely solves the problem. If you’re working with a solution provider to solve a business problem, make sure they come with deep knowledge of your industry, processes, best practices and change management.
The business challenge or problem will depend on who you talk to in the C-Suite. For the CEO or Financial Director, it could be bottom line growth and return on capital employed. For the Marketing and Sales Directors, it could be market share, business growth by channel and customer service. For the Operations and Supply Chain Directors, it could be unit costs and inventory levels. For the IT Director, it could be trying to develop an IT strategy in the fast-paced world of technology change and how to overcome a shortage of IT specialists. Beneath the C-Suite, managers will have their own business challenges, people are becoming increasingly technically savvy and are coming forward with their own ideas on how technology can help.
For most organizations, coming up with a long list of business challenges and problems is the easy part but determining the right business solution takes more time and requires detailed root cause analysis. For example, low inventory availability in the supply chain could have numerous causes: forecasting errors, poor inventory deployment, low stock accuracy etc. If you determine low stock accuracy is a major cause, then you need to further peel the onion. Low stock accuracy could be the result of manual data capture, poor business processes, high staff turnover etc. In this case, implementing a technology solution involving RFID tags and scanners alone would not solve the problem unless process and people issues are also addressed.
Companies need to consider the maturity of digital technologies and therefore the level of risk. Blockchain is an emerging technology with huge potential to streamline cross industry value chains. International trade offers a use case, with a complex web of suppliers, customers, asset providers, freight forwarders, banks, customs etc. often linked together by inefficient and slow manual processes. But getting cross-industry programs working is notoriously difficult. Big Data used to analyze massive data sets, identify patterns, draw business conclusions and make predictions is also receiving increased attention. One oil company has used data analytics to identify multi-million-dollar savings in spare parts inventory while many companies struggle with data integrity in their ERP systems. You need accurate data if you're going to draw any meaningful conclusions. It’s worth repeating another adage - garbage in, garbage out!
Prioritizing business improvement opportunities is very much about getting “the biggest bang for your buck”. With a constrained budget and a long list of business problems, you need to identify which projects provide the best Return on Investment (ROI) and shortest payback period. If you want to solve your current business problems, focus on using “here and now” digital technology. Based on Innovapptive’s experience of working with over 60 clients implementing mobile solutions we would offer the following advice on Digital Transformation:
- Start with the business problem you are trying to solve. Be crystal clear on the business value and outcomes expected and don’t get hung up on the functions and features of the technical solution
- Take a holistic view of the business problem. Process, people, data and technology all need to work in harmony to drive a successful outcome.
- Do something real, practical and tangible. Its ok to start with a pilot but always have ambitious business goals in sight. A Digital Transformation program will gain traction when you start to get runs on the board.
So now you’re ready to turn Digital Transformation on its Head.
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