By Kethan Parbhoo, Services Director at Microsoft SA
Deriving true value from digital transformation demands vision, insight and investment. It’s not dipping the proverbial toe into digital. Nor is it the bold, brave leap. Done with intent, it is strategic and sustainable. Research undertaken by International Data Corporation (IDC) and Microsoft South Africa found that 20% of South African organisations are wary of investment into the concept of digital transformation because they do not believe it is relevant, and 20% believe they have more pressing business matters. They are right, if looking at digital transformation through the wrong end of the microscope.
These statistics highlight some of the most common digital transformation misconceptions - the impact of disruption won’t happen to us, it is just a trend that’s riding on the wave of hype, we have enough time. The reality is that other industries and organisations are already investing in the technologies that drive it, and those who don’t run the risk of slipping into obscurity. Volatile markets, currency fluctuations and tightening corporate wallets are shaking the foundations of business and investment. A report from Forrester that details how businesses can go about transforming digitally sums up the situation neatly - companies that fail to transform will weaken under the pressure of those who have.
Digital transformation isn’t bold leaps or tentative dabbling, it is a measured and tactical approach that maps corporate vision to deliverable reality.
The cliched comparisons of Netflix, Uber and Airbnb are tedious for a reason – they came out of nowhere, they were fast and they completely changed the landscape. The organisations they disrupted are scrambling to catch up and keep customers. The problem is that unless the business is ahead of the transformation curve, they will always be catching up.
IDC’s research also found 80% of South African organisations believe that they lack the funding needed to undergo digital transformation. However, by transforming into digital businesses, companies are able to optimise operations, make the business more responsive to both challenges and opportunities in the market, improve service levels, and reduce costs with intelligent processes that anticipate the future and coordinate people and assets more efficiently. Thus, the process does not only end up paying for itself (ROI), but actually streamlines the business’s overall operations to save the company even more money in the long run. Moreover, the problem is that if an organisation isn’t ahead of competitor and market, they may not exist in 10 years’ time.
How does the business take on the digital mantle without looking down the barrel of bankruptcy? This perhaps is the most important question that should be asked before digital transformation is even considered - when does the investment start, and where?
It’s a three-step process – hire external support to gain an accurate view of the business and its processes, assess the corporate vision and its sustainability against market and demand, then invest in the technology that can make achieving these goals into a reality. Ask questions – why does this process have to be followed, why does this need to be optimised, what is the strategic reason for this business process?
One size fits all is for fashion, not technology. Digital transformation failure is often because companies throw technology at a problem without understanding why the problem is there in the first place. Purchasing a shiny new solution only to populate it with the same old systems and issues will only deliver the same old issues and systems. Technology must be tied to strategy, it must know the problem it is going to solve, and it must integrate across silos.
Two of the most important tools to implement are Customer Relationship Management (CRM) and Enterprise Resource Management (ERP). The former allows for real-time communication and customer-relevant information sharing, which helps make every customer interaction more meaningful and goes a long way in deepening customer relationships. The latter provides businesses with a real-time view of virtually every facet of their operations from production and inventory, through to order processing. This solution allows for easy integration into existing IT systems, and offers companies seamless links into social selling software, enables employees to gain actionable insight and allows them to visualise these insights by turning data into easily comprehensible charts.
With Microsoft Dynamics 365 there is one version of the truth as the solution provides comprehensive insight into everything that is happening across the organisation at any point in time. There aren’t 1000 Excel spreadsheets, manual processes and varied versions of reality. With these systems integrated across the company, they can update immediately and can work both online and offline to include all levels of employee and application. It sounds simple, but this level of communication is what lifts the constraints around productivity and allows for the organisation to adapt and pivot on demand.
However, the business will only achieve these vaunted levels of capability if it follows a clear strategy and ensures complete integration. There won’t be any new deals if the CRM system isn’t being run across all silos, isn’t supported by executives and isn’t solving any problems. It will just be another technology investment that cost money and didn’t deliver results. What the business needs is a technology that breaks down the silos between CRM and ERP, that brings the back office into the front, and that allows for the business to benefit from comprehensive synergies. That’s when the data and the deliverables defeat the competition – complete system integration.
IDC’s research found that digital transformation has a 48% lower initial cost than organisations realise, and that it delivers the scalability, access and flexibility they need to remain relevant. It allows them to set themselves apart from the competition when it comes to customer engagement – millennials don’t care about brands, they care about experiences. Today, the qualities that differentiate the business aren’t its products and services, they are the business itself. Agility and speed to market, and the ability to collate and analyse the data to enhance research and development and drive customer acquisitions - these are the side effects of a digital transformation strategy done right.