Digital Transformation for Managing Business

 

Digital Transformation is not new

Digital transformation is a term that has been around for some time now what but what does it really mean considering we have been using digital technology for more than half and century.

Obviously the technology has changed, got faster and more powerful and more accessible to more people but you could really call it new. So why has the term digitial transformation suddenlly become a thing ?

Upgrading to more modern technology is really what it is all about but for the purposes of this blog we’ll stick to digital transformation as it is now a widely accepted term and it is certainly gaing increasing attention in businesses around the world.

Digital transformation is a never ending cycle.

Transforming or upgrading your systems is never ending and the biggest problem is how to do it in an efficient amd non-disruptive way.

The main problems seem to be, the overwhelming amount of information, skill shortages, outdated culture and the fear of change.

However, the truth is ‘’digital transformation’’ is no longer a choice, it’s a crucial driver for growth, profit and competitiveness and will ultimately set up your business for great success.

bi5 is in the ‘digital’ business and I must admit, to fully understand the meaning of digital transformation, I had to read many articles and observe companies that dared to implement a digital transformation strategy.

The consistent outcome I have seen in successful strategies is that a well implemented digital technology empowers business owners, executives and managers to make better decisions, be more confident and increase performance through the help of machines.

Data analytics allow organizations to increase operational efficiency, design new revenue streams and observe developments and trends.

“The goal is to turn data into information, and information into insight.” – Carly Fiorina, former executive, president, and chair of Hewlett-Packard Co.

Business is indeed becoming more complex regardless of the industry you are in. The endless options and ways to manufacture your products, sell your products and distribute your products, paint the picture of today’s multifaceted environment.

That said, Forbes stated that 53% of companies are using big data analytics today, up from 17% in 2015 with Telecom and Financial Services industries fueling the fastest adoption. Most companies have big data, it’s the way you use it and extract value from it, that differentiates you from others.

Whilst you can’t argue that there is a lot of data that can have an impact on your business, whether it’s a marketing – cost per lead, total leads, new customers, sales – average sale value, total order value paid or operations – output value / hour, returns, order backlog, the key to fully utilize data is integration and analytics.

In a lot of companies today, reporting is siloed and specified to a particular area or function of the business.

Therefore, the goal should be to create links between useful and interrelated data. This will provide you with actionable insights and the ability to analyse past and current developments. Moreover, having a 360-degree view of the business offers a better understanding of the overall position and the ability to view opportunities.

The solution is to have a system that can integrate ‘identified’ data from various sources and present it in an effective and timely manner. The system also needs an analytical capability to be able to drill-down to lower levels of the data to understand why outcomes happened.  Technology solutions that successfully manage these tasks are for example Board, Microsoft BI o Tableau.

 

Digital Transformation in The Future

Having covered the historical reporting aspect we now focus on the future and what could or might happen.

The data and key performance indicators (KPI’s) that you use to monitor and measure your past and current performance is the same as what will drive your business going forward. What will change are the main drivers that affect those measures and KPI’s. Exchange rates, commodity prices, cost of resources, change in consumer behavior, trends etc. Depending on the industry you are operating in, certain main drivers will be identified as critical to your business.

If your planning and reporting ‘systems’ are integrated you can plan different scenarios, what-if situations and visualise and analyse the impact going forward. Scenario planning is a set of processes for creating several scenarios and using them to aid decision making. In a time of uncertainty, the understanding of potential threats/opportunities and their implication for the organisation creates the base  for  a robust decision.

One example are Farmers, who use scenarios to predict whether the harvest will be good or bad, depending on the weather and soil conditions. It helps them forecast their sales but also their future investments.

 

Final thoughts

Concluding this article, digital business transformation is the ultimate challenge in change management. Business leaders must constantly challenge their organizations to ensure this change can unlock productivity gains and significant competitive advantage. A software-defined, data-driven and automated organization will move faster because the important facts and associations in the data emerge.

The cost of doing nothing are high…so move quickly, make continuous adjustments and keep going.