Digitally enabled productivity gains to accelerate the Fourth Industrial Revolution
“There’s no going back. The significant acceleration in the use of technology, digitization, and new forms of working will be sustained.” McKinsey & Co
In the near past, the need for businesses to change was sporadic and controllable. IT projects were normally planned as staged processes and implemented over months, sometimes years. Therefore, it is not surprising that with static technologies still at their core, many organizations have approached digital transformation as a journey requiring much thought, planning, development, and management with fixed milestones along the way and likely to be time-consuming and expensive.
Arguably, we have arrived at a digitalization inflection point, and the pandemic has been a catalyst. How we did things before is not how we will do something in the future. Everything is changing. Formerly labor-intensive and manual processes will all be digital. Orphaned or siloed departments and functions previously not prioritized will become streamlined and joined-up. The agile business is now defined by opportunities and needs, not budgets, technical capability, or sunk investment. The capabilities, efficiencies, cost control opportunities, and competitive advantage afforded to a digitally enabled business is too great to ignore. What if we could, now becomes what if we do.
Agile is a much-used or maybe overused word that means different things to different people. For a technical audience, it is an approach to developing systems and processes; from a business strategy perspective, a way of thinking, analyzing needs, and implementing change; and within a market, it can be a description of the culture of the business, how well, and the speed with which it can adapt to maintain and improve its positioning against its competitors. This is at the center of what is required, yet many organizations are currently the antithesis of customer-centric and agile. Still, none can afford to ignore either the threat of the enormous opportunities digital transformation promises: streamlining their processes, improving their responsiveness, reducing costs, and positioning themselves for a bright future.
Now, as the long-term effects of the global pandemic — including seismic changes in working, buying, and living practices have become more apparent, operating in an ‘always on’ connected world presents fundamental challenges, creating enormous opportunities for responsive and flexible digitally-enabled organizations.
What works today needs to change tomorrow.
Without a doubt, organizations must respond by embracing the digital world within and beyond their enterprise or risk becoming obsolete. No longer is it sufficient for the business to fit around the IT capabilities. Digitized processes now need to be at the core of all operations providing the company with accessible and adaptable functionality and knowledge while maintaining brand values and enhancing customer engagement.
The challenge for many businesses is that the enormous investments they have made into highly complex and often cumbersome large-scale systems have resulted in the conundrum: What currently facilitates their core day-to-day operations is constraining their flexibility. Creating new relationships inside and beyond their enterprise, identifying and analyzing new data sources, or making minor changes even to simple processes can require complex work. Forrester Group notes 78% of digital transformations fail to meet their business objectives and 73% to provide any value at all.
What can digitizing an enterprise enable?
For those embracing a digital future, the benefits it offers are clear, from responding to evolving customer behavior and expectations in real-time; to meeting new regulatory requirements, employing new technologies such as AI in its processes, and deploying solutions across the business and beyond.
Where to start? Digitization may be the key, but approaching it as multiple projects, each focussed on a visible area of the business, prioritizing the technology, not the business needs, can consume resources with no tangible return on the horizon. Large projects seeking to remodel entire processes based on the existing systems are too slow, too expensive, and too disruptive and run the risk of leaving parts of the business isolated and non-responsive.
A paper-based HR department, for example, currently utilizing Exel spreadsheets and fixed forms and static processes may not be seen as a priority for digitization even though it is expensive to maintain and inefficient. However, for such an HR function to adapt to new ideas, legislation, or business need is complex utilizing static systems. By digitizing their entire HR function from recruitment and onboarding to ongoing employee management, currently unavailable data and statistics can be captured and analyzed, identifying increased resource needs and other requirements. Digital HR analytics with automated functionality like real-time tracking of individual training, holidays, and absences will provide detailed reports to inform and support management on demand and automate processes.
The reality is that the more nimble and adaptable a whole organization is to the speed of change, the bigger the potential benefits. The challenge is to keep in place the core systems, processes, and data, not seek to change what is not broken but reimagines how it can support new operations and practices in every aspect of the business from HR to Marketing. Ideally, what is needed are rapidly deployable solutions in which digital technologies can create a business-controllable digital layer around existing systems, bringing the business users and business needs and customer engagement ahead without touching core processes.
How enterprise functions, responds to, and adapts to evolving conditions, meets new challenges, and seeks opportunities will define its likely success. For the successful business of the future, agility and flexibility need to be inbuilt into processes. Digitization can rapidly transform every aspect of an organization’s operations, contextualizing and qualifying data to present intelligent and actionable knowledge on demand.
However, they achieve transformation, digitally-enabled enterprises, unconstrained by the capabilities of previously fixed systems and processes, will be infinitely responsive and adaptable, capable of generating and analyzing management information in real-time, identifying failure, adapting strategies, and measuring and implementing successful solutions and across their business, from customer engagement to product differentiation.
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Originally published at Upstack.co on Jun 7, 2021, by Symon Blomfield.
