When we talk about “digital transformation”, what exactly do we mean?
Digital transformation is not exclusively technological. It involves a cultural shift which has the potential of revolutionising the way your business is run. It can provide you with the power, tools and flexibility to take your business to the next level.
Understanding the full capabilities that digital transformation can offer you and your business is essential in determining the success of its implementation in your company culture and operations.
At vH3, we like to breakdown digital transformation with the following stages:
- Establish a clear strategic blueprint and set of objectives to achieve your business goals.
- Recognise where your business is not currently in alignment with your objectives.
- Test and validate that the objectives and proposed blueprint for transformation will manifest your desires for scaling the business.
- Schedule a roadmap to implement and deliver the agreed changes.
- Measure and analyse the successes based on the objectives and proposals set out in 3); then reevaluate and readjust processes as required.
Diagram/Graph - titles to add in
Step 1 - Establish business objectives and goals.
Step 2 - Recognise where processes are out of alignment with objectives.
Step 3 - Test and validate the proposed reforms will result with the desired changes.
Step 4 - Schedule a roadmap to implement changes.
Step 5 - Measure successes and readjust processes as required.
Digital Transformation opportunities and challenges
It is easy to assume that digital transformation is only for large scale companies, but contrary to that misconception, it can be easier to implement in a company with under 100 employees.
Reforming the processes, systems and culture of a business with 10,000+ staff can be a huge and challenging overhaul.
If you are a small company, now is the time to think about reforming your systems and processes, so that you can scale in the right way and with more ease and speed.
Knowing your business objectives
We cannot emphasize how important it is to establish your business goals and objectives - it is the key to any successful business transformation.
However, technology should just be an enabler in improving your business systems and process, making you more ready to scale. The success of your project is knowing your business objectives; technology is just one tool in the journey of transformation.
Challenges with digital transformation
Expertise:
Many businesses are too hasty in their desire to reform their processes, buying systems advertised as “digital transformation”systems without taking any expert advice or strategic planning in the implementation and rollout. Without the assistance and knowledge from an experienced system architect, there is no clear blueprint or bespoke designing of systems to serve your business’s objectives and needs. Nor is there a system in place to monitor and analyse the successes and gaps, in order to upgrade and improve the changes.
Current Systems:
Digital Transformation does not always require new systems. Sometimes your current processes, data, systems and people simply require streamlined software integration, automation of processes or portal creation to enhance what is already working well. Testing and validating the proposed reforms against your goals and objectives reduces costly and unnecessary new systems.
Expense:
Some businesses delay exploring digital reform as they perceive they don’t have the budget. But with expert planning in the validation of your proposed automation and digital reforms, there will be no case for you not investing in change.
When you can see the benefits and scalability of your business, how can you afford not to create the budget for digital transformation?
Changing business models:
Covid19 aggressively changed the way many businesses thought. Digital Transformation became the fashionable buzzword for many small and medium sized companies, with many shifting from: Manufacturer - Retailer - Consumer to Manufacturer - Consumer.
eCommerce platforms like Shopify, Magento, WooCommerce were adopted en masse by manufacturers. The impulsive adoption of these platforms without sufficient planning resulted with a string of problems including:
- The manual processing of orders between eCommerce and accounting solutions
- Administration burdens from processing orders from couriers and in solving returns.
- Sudden increases in stock requirements.
- Implementing JIT (Just In Time) systems for material suppliers.
- Handling customer service complaints.
- Aligning production and stock requirements with market activity.
- Onboarding and management of partners and suppliers.
- Under-resourced finance teams dealing with bank pressures.
With no digital transformation roadmap, many of these manufacturing companies suffered; damaging their reputations and brand from poor customer service and losing money through ‘pushed down’ administration costs.
Operational Costs and Spend Management Tools:
There is no doubt that spend management tools can reduce administration costs and help transform operations. However, if businesses only focus on imputing siloed cost centres without examining their entire business’s processes, new manual administration expenses can mount up.
Processed expenses need to be fed back into an ERP or accounting solution. Further complications can occur when intercompany trading is part of the value chain.
Customer Service:
Customer Service can certainly be improved through the digitalisation of some processes. Staff training, feedback loops and process flows may however have a more important role.
With the hardest competition for businesses no doubt being to offer unbeatable customer service, many businesses are reevaluating their digital transformation objectives to see if it competes in what is a very competitive market.
Having digital tools to assist the speed and efficiency of customer service is beneficial, but customers want choice. Being able to offer clients the opportunity to purchase the products and services they want, receive the communication they need on any device and getting queries or complaints resolved quickly and easily is the bedrock of exceptional customer service. However, businesses should remember that many clients prefer person-to-person communication.
Digital Transformation Success
Pragmatic planning and attention to detail in the implementation phase will enhance the success of your digital transformation programme. In our experience, success is usually down to:
- Clear Objectives: Have a clear set of digital transformation objectives. Communicate the benefits this digital roadmap will bring to the customer, business, supplier or other stakeholders to those that will be a key part of delivering it - your team.
- People: It is really important to communicate to the key personnel that digital transformation is not fundamentally about technology. For example if customer call centre employees do not understand from the off that a self-service customer portal will not result in them losing their positions, they will not go above and beyond in assisting with the implementation of it.
- Processes: Save time and money by mapping out all your existing processes, rather than rushing to create new systems. Digital transformation can enhance what already works.
Measuring Digital Transformation Success
How can we measure success? We can monitor success by creating digital transformation KPIs to be set at an operational level. Be sure to identify which KPIs are more important for your business.
As an example let’s consider which is of greater importance between
a) the number of customer requests processed in one hour, versus b) an increase in customer satisfaction scores?
The answer may seem obvious, but it actually depends on the unique requirements and status of your business. For example, the importance of KPIs will differ greatly if you already have the most competitive customer satisfaction scores in the market, or control 90% of the market. Setting KPIs should be streamlined with your core objectives, strategy and position in the market.
Common KPIs that may be useful to your business could include:
- Monitoring customer revenues
- Reducing operational costs
- Order to delivery times
- Staff performance
- Timing new product launches
- Market share
- Brand recognition
- Profitability ratios
Digital transformation roadmap
If this article has inspired you to create a digital transformation roadmap for your business, vH3’s expert team of system architects are available for a consultation. Contact us here and book a call with one of our system architects today or download our brochure at vh3.digital.
In the meantime, we have created some useful steps for you to begin mapping your processes to decide what changes you want to implement. Our advice? Start small Perhaps you want to build a self-service experience for your clients? Or streamline purchase/payment processes?
- Download our project planning workbook here to get you started:
- Map your existing business processes and any new ones you would like to implement.
- Identify the areas in the process where personnel, systems or other stakeholders are active contributors.
- Create a visual flow of your processes to assist you in isolating key requirements and challenges.
An additional great resource to assist you can be found here: Guide to BPA Project Management
Conclusion
You can start your journey towards digital transformation today. Perhaps the most important thing to remember is that digital transformation is not just about technology! Be wary of buying software labeled as such, because the technology alone will not grant you the desired outcomes you seek. Remember to communicate with your staff, suppliers and stakeholders to identify what your business really needs and what your objectives are. vH3 is available to assist you in creating and actualising your digital roadmap to success.
