Avoiding common pitfalls of enterprise digital transformation journeys
Can your organization benefit from digital transformation?
We got you; that was clearly a trick question! If your business hasn’t yet realized why it needs to digitize its manufacturing, supply chain, operations, accounting, sales, marketing, and customer service processes, then the recent global health crisis has most likely kick-started these thoughts and decisions throughout your organization. The pandemic has underlined the importance of staying agile, reshuffling priorities, flipping one’s product or service portfolio, and remaining on top of quality and customer service during challenging times. Having the right digital systems in place is a pre-cursor to all those opportunities to stay afloat, or even annihilate struggling competitors. If you haven’t yet fully transformed your company’s processes and operations, the time to do so has never been more right.
The ingredients of a successful enterprise digital transformation
Even if you have implemented digitally driven ways of doing business in some areas, it’s prudent to re-evaluate the entire operation of your enterprise from scratch, as if you were starting anew. The reason for this is that, often, less significant processes get overlooked in favor of implementing larger-scale systems and solutions. When enterprise-wide processes are disconnected, however, there can be gaps in delivery, resulting in inefficiencies, errors, and missed opportunities. Therefore, it’s important to look at all functions, processes, and tasks in their entirety, as one complete ecosystem that needs to run seamlessly and flawlessly in order to reap the optimal results of having it digitized.
Setting your organization up for a successful transformation
How you approach digital transformation in your organization, whether partial or complete, depends on your organizational setup, who’s helping you undertake the journey of transformation (IT department, external consultants, or a software partner), and which aspects of your organization are affected. Digital transformation practices can be applied to a company’s processes, business model, people and culture.
In order to undergo a successful digital transformation journey, no matter which areas it is applied to, an organization needs to, first and foremost, develop a solid digital strategy and answer the most important question: “why should we digitize?” Working with an experienced digital transformation partner/software company like Verhaert Digital, can make a big difference in how the journey goes for your organization.
Second, as an organization, you need to consider your hierarchical structure and agility, managerial buy-in, expertise and readiness, employee education and aptitude for change, and last but not least: the total budget that can be allocated not just to the initial project but for its post-implementation rollout, adoption, and support.
Steps to a modern enterprise digital transformation
An enterprise journey to digital transformation consists of multiple digitization initiatives that must be carefully executed. The typical order is as follows:
- The transformation of business processes: Are you still using old-fashioned, paper-based techniques, or basic software-driven tools that replicate those, to manage essential business processes? When digitally transforming processes, new ways of managing them need to be implemented, rather than simply digitizing old methods.
- The transformation of business operations: The implementation of the best technology cannot replace the logic behind optimized, digitized business operations. Therefore, this part of the journey needs to start by examining the logic behind how things are currently done and how they need to change for the better.
- The transformation of the customer relationship: This important step in the digital transformation journey is often overlooked by many enterprises. Even when all processes and operations have been digitized, the way that businesses relate to customers needs to be carefully analyzed for potential improvements and optimizations, of which there are typically plenty.
Common digital transformation pitfalls and how to avoid them
There are several potential pitfalls that most enterprises encounter throughout their digital transformation journeys:
- Following a bottom-up approach: the transformation journey needs to start at the top, with the highest levels of management having skin in the game and buying into it, understanding and supporting the process at all stages, or you risk having the entire journey fall apart due to lack of support at lower levels.
- Allowing silos to get in the way: an enterprise-wide transformation affects every employee, team, and department and should never be approached as a ‘one function/team/process/operation/task only’ change; management and HR need to ensure this is the case throughout the journey.
- Starting with the largest projects: often, there are small processes that can be tackled first, setting the stage for the larger, more complex ones that need a good base to build on.
- Trying to do it all at once: attempting to transform all functions, operations, and departments at once is not only unfeasible, it is sure to complicate the process, confuse people, or completely turn them off to what you’re trying to achieve.
Most of these pitfalls can be avoided through careful planning, working with an experienced partner, and a realistic estimation of a company’s readiness for transforming inside and out.