What does the term Digital Transformation actually mean? I’ve been in the IT industry for over 30 years and have been in the fortunate position of witnessing the information technology revolution at first hand. My first job was working for a furniture retailer in computer operations, (Honeywell DPS8 in case you were wondering). Thousands of paper sales orders were posted to the HQ, arriving in mail bags full of order slips. These had to be manually entered into a minicomputer system by an army of women, (the position was open to anyone, but no men ever applied). Once inputted, the data was exported to the mainframe for processing. The business goal was to save money by digitising this process. My job was to install a network of terminals in the branches, enabling the sales staff to input the sales order at the point of sale, in real time.
The benefits were clear and virtually instantaneous.
-The department of data entry operators was reduced to zero
-The cost of postage was reduced to zero
-The time from order to cash was reduced
-The customer waited less time for their furniture
-Order Errors were significantly reduced
I would call this a good example of digital transformation. The process flow of a customer ordering furniture was quite similar, but the process was dramatically improved through the application of technology. This, by the way, was in 1983!
So why are we talking about digital transformation as if it was new phenomenon? There are a few factors that I think have contributed to this.
-Undoubtedly, the biggest impact on all our personal and working lives has been the smart phone. We should now probably just call the phone, as it’s become the default device and no longer needs a special category.
-The cost of processors and memory has continued to follow Moore’s law, making phones, laptops and IT infrastructure economically viable for large scale adoption.
-Connectivity underwent a revolution making cellular and WiFi ubiquitous, cheap and fast. (In my project in 1983, the terminals were connected via modems at 2400bps!)
-Open standards mean we’re not constrained by single vendor solutions
The abundance and relative low cost of technology has now given businesses the tools and capabilities to improve their existing processes or change them completely by the application and adoption of the relevant technology.
The key words here are, “relevant and adoption”. What’s right for company A may not automatically be right for company B. Businesses in different industry vertical sectors have unique sets of challenges. Business to Consumer companies, such as in retail, need to operate a just in time supply chain to ensure the right amount of stock in the shops at the right time. Real-time operations are key here. A firm of lawyers doesn’t have that business issue. They are focused on large amounts of sensitive data, bound by regulation and the need to effectively communicate and share relevant documents.
Therefore, there is a key role to play for companies such as Clovertec to invest time with customers to fully understand the specifics of their industry any compliance requirements and business goals in order to apply the right technology. The objective of this consultative process is to deliver tangible business outcomes akin to those in my example.
There are a couple of additional really important elements of digital transformation that are critical to success. When I say customer, I don’t mean just the head of IT. This person is key, but it’s essential that all the key stakeholders are engaged in the conversation. If we are to deliver the best outcomes, we need full involvement of the people who run the business and experience the day to day pain.
The other success factor is adoption. An idea born at board level, then executed without the buy-in, education and adoption of the whole workforce will fail. Efficient execution of digitally enabled processes relies on making sure the employees are informed, understand the impact to their role and are engaged. Not only will this help realise the business benefits but will improve employee satisfaction. Many companies have seen lower staff turnaround and a “happier” workforce.
Based on my last comment, you wouldn’t think the data input ladies would be happier, since they lost their jobs! Today, we’re not looking at technology replacing people, (watch out for AI though in the future!) but looking to digital transformation as a way to free up more time for employees so that they can do more on what they do best.
Finally, Digital Transformation has usually been associated with larger corporates. The assumption is that they have the cash, the critical mass of people to work on the topics and time to implement. My comment here is that if you identify the challenges and goals of a business and can clearly show the outcomes, then it doesn’t matter if you’re a multi-national bank, a global car maker or the local engineering company down the road. Digital Transformation has a role to play.
Speak to Clovertec to see how we can help you on your Digital Transformation journey.