The coronavirus pandemic has brought with it challenges and changes. For businesses there has been a shift to focus on the modern workplace, the 'new normal', and the emerging 'Low Touch Economy' which describes the changes in the way we interact. But these are just the tip of an iceberg of digital advancements that are likely to be adopted by businesses. Whether this will be a revolution, or an evolution is yet to be decided, but how it will impact you and your business should be understood.
Understanding the need for the digital journey
Changing technology has been powering improvements in business over the last 15 years, and the pace of change appears to be accelerating. Technology is not only becoming more affordable but also easier to implement, and thereby more accessible. As we headed into the coronavirus crisis, capital was also becoming more available, allowing businesses to take advantage of these technologies.
It is understandable that many businesses will now be focused on protecting their cash position, rather than investing in new digital approaches and technologies. But is this the right approach?
The changes across society and consumption suggest that a business’ size and volume no longer guarantee a winning position. The need for businesses to adopt new models, innovate and exploit new market conditions mean that speed and flexibility will be increasingly important. For example, boohoo, the online fashion retailer founded in 2006 generated £1.2 billion revenue last year and is worth £4.6 billion, twice the value of Marks & Spencer.
Navigating the digital transformation journey
Organisations of all sizes are taking advantage of new digital technologies to refine business processes and create new ways to add value. But when considering what digital and technology changes to adopt businesses are confronted with a huge range of choices.
At RSM we have defined five steps to help you achieve your digital ambitions:
① Develop a clear strategy and actionable road map
Implementing new technologies in a piecemeal and tactical manner, driven by the perceived ability to achieve quicker returns on their investment, run the risk of building an ecosystem that becomes more difficult to manage and sustain. This can result in higher costs, reduced integration, and reduced agility and flexibility, which are largely the drivers for adoption in the first case.
Developing a clear strategy and actionable road map should ensure that your digital strategy and objectives are aligned with your business strategy and objectives.
Building an effective technology and digital strategy requires you to:
- step back and consider your business strategy;
- consider your customer experience and how this can be enhanced;
- consider how your business organisation works and how this can be enhanced with better collaboration;
- consider whether your products and services are appropriate to the market; and
- consider if your operations are appropriate, agile and efficient.
A short assessment should look at existing digital components, how data flows across the business and how your customers want to interface with you.
② Design an integrated digital ecosystem
Many businesses are failing to realise the benefits of integration across their modern digital solutions. Whether with legacy internal or external systems businesses are facilitating technology integration with manual effort, using staff to pull information from one source, enrich it with information from another, and then enter finalised information into a third system. This lack of automated integration is typically driven by one or more of these reasons.
- Lack of planning: Solutions were implemented to deliver specific, tactical outcomes, with the wider benefits of broader integration to deliver additional value not being considered.
- Lack of knowledge: The internal IT team lacked the knowledge and skills to create a sustainable integration between systems. This is potentially caused by lack of knowledge of either, or both, the technology and the business process.
- Lack of vision: No one took the time to look at the holistic position and failed to recognise the potential value that could be driven by integration.
Lack of integration and offline data manipulation is a significant cause of higher costs, increased risks of errors, reduced productivity and staff unhappiness leading to challenges on key staff retention.
③ Build a viable digital foundation
Today the number of affordable commercial systems has expanded hugely. These systems are helping businesses standardise and automate core processes and offer easy integration with other solutions (often using standard and supported connectors). Even so we often see a reluctance to abandon decades-old solutions, driven by a mindset of 'if its not broke, don’t fix it', this can limit and prohibit flexibility that may be required by business in the future.
While every business is different, the digital foundation will typically consist of the following four core components:
- Enterprise resource planning
- Customer relationship management
- Human resources information
- Enterprise data warehouse
④ Manage change in the organisation
One of the most difficult and critical factors of success for change is a business’s capacity and willingness to support and adapt new ways of doing things. Many studies suggest that project failures do not occur during the technical implementation but rather during the introduction of new practices.
- Include designated resources for programme and change management within your transformation.
- Ensure that you understand the impact of the changes from the introduction of new technologies and ways of working and provide a programme to help mitigate these.
- Encourage adoption through a programme of communication, initially on the reasons for change with messages being refined to more specific “what does this mean to me” towards the go-live date, and training.
- Make sure that the business leadership are clear and vocal in their support for the change, staff take their lead from your leaders.
- Monitor adoption of the changes through process metrics and consider how you will deal with leakage away from new processes.
⑤ Build a viable digital foundation
It is common to hear of businesses that once thrived but are now closing. Often it is because the dynamics of their industry shifted and they just failed to respond, or, didn’t respond early enough.
Organisations must continue to review, reflect and build their digital foundations, to incorporate the necessary people, processes, data and technologies to stay relevant and competitive. This is therefore not a one-off implementation, but a change to culture to embrace continuous reflection, disruption to markets, and improvements.
The business environment is changing quickly – customer and employee expectations are evolving, the need for immediate actionable data is more important for more effective decision-making. Change is no longer linear but now exponential and therefore a new focus on technology is required.
Although new technologies are now affordable and available to mid-market businesses and can be harnessed to create new opportunities for growth, businesses must take a structured approach to map out their path.