By Ian Lord, Managing Director Pembroke Technology Australia

In today’s competitive business environment, CEOs and Senior management are pressured to implement digital solutions to increase efficiency and facilitate growth opportunities. Digital transformations affect every aspect of the organisation, requiring integration to eliminate process gaps, forms, and manual intervention. Even in mid-sized companies, we have uncovered 100,000+ Excel worksheets supporting day-to-day business processes. Paperless, digital solutions that engage customers, vendor partners and employees, have the ability to realise these efficiencies and improve the bottom line. The term “digital transformation” is not a new concept. However, over the past ten years, many programs have achieved varied success.

McKinsey reported that “less than 30% of transformations succeed”, and even fewer digital transformations. 16% of respondents reported marginal performance improvements and 7% said these transformations were not sustainable long term.

A key reason why digital transformations fail relates to a lack of executive sponsorship and understanding. In the past, “point solutions” were implemented in isolation, impacting a single business unit or department. Decision making would sit with the business unit leaders, requiring no interaction at the executive level. Eliminating highly inefficient practices requires an unprecedented level of disruption. Organizational structures and power bases need to shift to realize the benefits of the modern digital platform.

There are several reasons for the failure of Digital Transformations including:

• Lack of Executive Sponsorship/Ownership
• Lack of a clear Digital Strategy and Roadmap
• Politically motivated power bases that are change-resistant and promote the status quo
• Unwillingness to embrace new technology or change
• Fear that the “Pay as you Go”, the consumption-based model will increase costs
• “Server Huggers” fear of new technology and decreasing IT job security
• Misalignment with current projects that countermand the digital transformation agenda
• Lack of guiding principles to drive key architectural decisions
• Board/Decision-makers that favor political vs. logical decisions

Considering the ‘ideal technology platform’ for digital transformation? Consider the following:

• The new workforce that brings consumer-based expectations to the enterprise; “I want it now and I want it fast and seamless.”
• An existing workforce that is resistant to change; “This is the way we’ve always done it.”
• The timebomb in your comms room; understand the business risk of remaining with outdated technology/systems.
• Your decision making; bogged down with unproductive meetings, organisational structures, costly resources, and unverified spending.

There are 9 essential components for a successful digital transformation. Companies need to identify the most appropriate “Capture at Source” point for all data entering their business processes. This data entry point can be via mobile, Internet portal, eMail, etc… to eliminate costly manual handling, forms, and spreadsheets. Components must be modular like building blocks that fit with the agreed architecture.

1.      Digital Portals – Digital portals allow information to be entered and shared between groups of stakeholders. Portals for Customers, Suppliers, and Employees allow easy data entry, access to critical business information and curated environment to enhance the customer experience. The use of AI/Chat Bots will be discussed later.

2.      Email Integration – Email is a ubiquitous and familiar tool for most staff and customers. It can be integrated into the digital platform allowing customer interactions to be captured directly into the Customer Relationship Management (CRM) system. Emails can also trigger events and link to workflow approvals eliminating the need for data to exit the platform for manual handling.

3.      Social media – Why should I care about “The Gram”? (that’s what the cool people call Instagram BTW). Social Media integration to LinkedIn, Twitter, Instagram, and Facebook provide customer feedback, opinion and trends on a real-time basis. You can gain insights regarding changes in your client network such as new roles, birthdays and even coffee preferences. Your digital platform can lead to enhanced customer intimacy.

4.      Business Intelligence – Business Intelligence (BI) provides real-time visualisation of KPI business score carding, project portfolio tracking or sales cycle efficacy. Having an integrated platform that enables this organization-wide visibility, allows for better-informed decision making and not the “gut-feel” so many C-level execs have depended on for years.

5.      Artificial Intelligence (AI) – Integrating AI services provides machine learning and deep learning to your digital platform. Enabling organisations to easily surface analytics data, meaningful enterprise search, and business process automation improve staff efficiency. The use of conversational AI bots can improve customer experience and reduce operational costs as well.

6.      Internet of Things (IoT) – IoT connects everyday machines to your digital platform. It allows machines to “speak” in the form of meaning data that when analysed ‘en masse’ will provide opportunities for efficiency gains through to predictive maintenance scheduling, reducing downtime. Inventory and fleet/asset tracking enabled through IoT, can be automated and tied to systems of record.  According to Cisco, by 2021, the average U.S. consumer will interact with 601 internet-connected devices every day and 4,785 interactions by 2025 (+800%). As with other trends as recent as the smartphone, IoT is set to have an increasing impact on both work and home. Businesses who make considered investment in IoT will reap the rewards.

7.      Software as a Service (SaaS) – SaaS enables organisations to consume only the services and number of seats required to service their requirements. This offers an opportunity to control your software spend and scale based on changing needs. These services, within an integrated digital platform, offer an advantage, in that reporting, workflow, visualisation, analytics, etc… from all products (e.g. Accounting, CRM, Email, etc…) are easily configured to be accessible and integrated by default.

8.      Third-Party Applications – Digital Platforms cater to applications programming interfaces (API) allowing for improved integration and data sharing.  Major software vendors write and maintain APIs to consume services from popular digital platforms and remain relevant in the changing environment.

9.      Cloud – Digital platforms built on Cloud Architecture have distinct advantages including reduced administrative costs, greater accessibility and the scalability required to reduce and expand services on demand.

Communication

The single most important aspect of Digital Transformation has nothing to do with technology. This is, of course, COMMUNICATION. You must develop a consistent approach to stakeholder engagement, communication and a great “What’s in it for me?” pitch. When staff understands the “why”, they gain confidence in the new digital workplace, adopt agile ways of working and become engaged. An empowered employee makes a positive impact on clients, colleagues and the company.

Evolution vs. Revolution

Organisations commonly have significant investments in “Legacy IT” (i.e. data centre, hardware, and on-prem software). Your Digital Roadmap must allow for the value realisation of existing assets, whilst gradually moving to the new platform. This is not to say that technical debt is acceptable. Those systems that are the end of life/support have provided value and now a present risk to your organisation.

Pembroke guides and advises CxO’s embarking on Digital Transformation through digital technology strategy, roadmap development and the provisioning of solutions that offer the best return on investment (ROI) for the organisation. If your organisation would like to discuss your plans for digital transformation, please contact Pembroke Technology today.

About the Author

Ian Lord consults with companies to improve their operational efficiency and employee/customer engagement through a modern approach to digital transformation. He spent 20 years working in the “Big 4” consulting firms (KPMG, EY, and PwC) where he advised and facilitated the client’s in Oceania, US, and EMEA with the implementation/QA of “Tier One” Enterprise Resource Planning (ERP) systems (SAP, Oracle, AX).