Becoming a digital enterprise
By definition, almost all companies are digital, using computers to collect and process data. However, many organizations capture data from paper, and use that information to create more paper; that scenario is not efficient or truly digital. To streamline operations and make better business decisions, organizations must take the next step to leverage electronic information across all areas of the organization.
Your company can realize significant benefits from going digital. A successful digital initiative enhances several processes, reducing paper usage and enabling your company to store, share, move and combine information much easier. Data becomes much more effective and valuable when other people become involved with it.
Companies normally equate digital investments to tasks like making website improvements or introducing mobile apps. However, by increasing efficiency in internal operations such as enterprise resource planning (ERP) or customer relationship management (CRM), the savings from going digital go directly to the bottom line. Spending on external systems may grow sales, but after delivering products and services, only a percentage of that growth is reflected in profits.
Transitioning to a digital enterprise requires a philosophy change. It is an ongoing journey, as technology evolves and allows your company to do more things digitally. For example, going digital 10 years ago meant something completely different than it does today; with almost all customers and employees using smartphones, organizations now have more sources for collecting data and constant access to information.
Your company must follow a series of steps to become digital, as seen in the graphic below:
First, you must have a clear strategy. It should identify valuable areas of the business and where processes can be improved. You should minimize time and energy spent on automating processes that only take a limited amount of time per month. Instead, identify where digitization could bring more value, and prioritize those workloads in terms of what should be evaluated at what point.
When becoming digital, your company should adopt a two-speed IT approach. Some areas of your business can be innovated very quickly, such as introducing electronic document imaging or an email marketing campaign for new customer engagement opportunities. However, more complex areas such as managing manufacturing operations or improving financial accounting compliance must proceed slower to avoid significant risks. Larger systems can’t be easily replaced, so you must build around their edges to introduce more automation.
For instance, you may not be ready to move an on-premise ERP system to the cloud. However, you can implement a cloud employee expense system and integrate it with your back office platform. Some workloads can be integrated very quickly, while others carry more significant maintenance, risk and change management concerns.
Your digital strategy should also detail how to connect key processes end-to-end. Companies tend to alternate between digital and manual processes and multiple applications to accomplish a single task. To become more efficient, those processes must be integrated from start to finish. Many processes can be automated using an integration platform or similar technology.
Finally, because automation is a constant journey, the final strategy step is rebalancing. This process involves rebalancing priorities, but it also means rebalancing staff processes are automated and employees are freed up to be more strategic. Especially within your IT organization, rebalancing frees people from maintenance to increase innovation. Instead of rekeying information to another system, or constantly patching a system that could be moved to the cloud, employees can participate in higher value, more innovative activities.
After designing a strategy, your company should take the two-speed approach for the customer decision journey and process automation. The two tasks should go concurrently, but digitizing the customer decision making process can proceed faster, while internal operations process automation must be more deliberate.
With technology becoming more pervasive, you must focus on digitizing customer interactions. When a customer submits a website form, is an email only generated to someone, or is information integrated into your CRM system to create an opportunity and track activities? Is a case generated where you can follow up and the customer receives automated emails on its status? With today’s innovations, you can digitize how you analyze data from customers through dashboards and other formats.
With greater automation, customer satisfaction increases. There is a preconception that all customers want to talk to a person; however, many people simply want an answer. If they can get that digitally through your website, customers are happy, because they don’t have to wait on hold to get desired information. Digitization decreases your costs to serve those customers.
In parallel to the customer decision journey, internal process automation offers significant opportunities for improvement. A successful exercise is to look at your processes with fresh eyes. Act as if you just walked into your organization, looking at your processes as a new hire. What would you change; with that new perspective, what seems strange about your processes? Think across departments to gain a complete perspective of issues and opportunities.
In many cases, the fresh eyes concept can benefit from a third party or implementing an evaluation project. It’s hard to get out of your comfort zone and your background, and evaluate processes with the right amount of perspective. That’s where an unbiased advisor that understands your environment could be valuable.
With a two-speed IT model, you may need to break up your IT teams. Different skillsets may be necessary, with people that can manage Web and cloud applications while others keep servers and internal infrastructure healthy. One successful strategy is dividing personnel into teams with different goals, skillsets, timelines and evaluation metrics. For example, uptime might be important for one team, but an innovative team may be performing experimental tasks where uptime is not as critical.
For your company to become digital, IT must manage remote access and mobility, enabling employees to take work anywhere and reduce paper usage. The IT team also must work across departments; in some organizations, each department has their own IT team. That can create challenges to becoming a truly digital enterprise, because the interaction between IT departments may be on paper or through Excel spreadsheets, depending on their level of innovation.
The final step to becoming digital is determining how to manage data and analytics. Many companies accumulate data, but they don’t often utilize it as a strategic asset to better serve customers. You must determine what information really matters and what is actionable. Measure what is truly important and automate that measurement.
Meaningful analysis requires identifying translators in your business who can help you understand if you are effectively measuring your key metrics. For example, an increase in Web traffic is not necessarily beneficial unless the traffic is going to the right products or services. You must understand what the numbers really mean, and whether they are good or bad.
You may think that you are a digital organization, but there is likely significant room for improvement. Becoming digital is not just about external investments; instead, the most valuable innovations are those focused on increasing internal efficiency and utilizing data that has already been gathered. A third-party assessment or software integration can help evaluate your environment and provide clarity into your digital strengths and potential opportunities.