Digital transformation is becoming increasingly crucial for businesses to adapt to the uncertain conditions that lie ahead. Defined as integrating digital technology across an enterprise, digital transformation typically requires a fundamental culture shift. Often, digital transformation has become synonymous with "our business is moving to the Cloud." While this is one aspect of the transformation process, digital transformations have come to include a deep understanding of an end user's process, reskilling employees, and centralizing systems across multiple departments.
SAP defines digital transformation as "a business-wide initiative to integrate intelligent technology into all business areas to achieve better outcomes and optimized performance and business processes." In alignment with this definition and greater go-to-market strategy, SAP and its partners continue to release new applications that can be implemented into the existing tech stack, including solutions for simplified purchase requisitions and service entry sheets. When implemented with a proper strategy, these technologies can automatically adapt to deal with business changes and anticipate other changes to come.
This blog post will share our advice for a successful digital transformation strategy that produces a significant return on investment (ROI).
Why Should Your Business Invest in a Digital Transformation Strategy?
Companies that are slow to adapt to changes and improve the way they do business will struggle to remain competitive in today's marketplace. The accounting company BDO has even described this future shift to the cloud as the turn of a paradigm forcing innovation in the business world whether it's ready for it or not. As a result, many businesses have begun to leverage digital transformation as the opportunity to reshape an organization and to create alignment between an organization's mission and more efficient business models.
It's true that considering the Covid-19 pandemic, many organizations have focused their investments on operational efficiencies and design to protect revenue in the short term. However, a proper digital strategy can address both short-term and longer-term objectives like diversifying revenue and modernizing IT infrastructure. Again, looking at a report from BDO, numerous studies show a direct correlation between digital advancements and revenue growth.
Regardless of what these goals are in your organization, the approach to a successful transformation is more or less the same and will involve considering the following areas.
A Clear Understanding of How People Really Work
To limit risks, organizations are often encouraged to optimize critical processes. However, existing processes may have been created with limited strategy or foresight, resulting in workarounds by the affected end-users. Properly optimizing the process then requires a more foundational pillar, understanding exactly how people work.
In many cases, change management teams made up entirely of outsiders will apply a set of "best practices" in a one-size-fits-all solution. Businesses are unique, and the approach to address these problems should be too. A more empathetic approach is design thinking. Design thinking takes a group of people inside the company, typically end-users, who have an intimate knowledge of what works and what processes are being used, and if they are different than those documented in the policy binder. By considering processes and digital empathy, your organization will shift from the thinking of "implementing technology for the sake of implementing it" to developing a change management strategy that positions the new tool as one that will enable team members to work more efficiently and better serve your customers.
Therefore, giving team members new technology will not be a sufficient solution. A lack of user understanding is the root problem that needs to be addressed. Human errors and slow data entry are symptoms. The digital offering that is leveraged in a transformation should be intuitive and without friction points based on the people's perspective.
A Roadmap That Aligns with a Business Strategy
After understanding your organization's starting point, leaders must determine their business strategy before they invest in technology to support it. With these goals in mind, transformation teams can begin developing a comprehensive plan that directly correlates to the company's goals.
To tactically reach each objective, businesses are encouraged to create a roadmap that addresses process improvement, identifies areas to exceed company goals and achieve employee support. At a high level this roadmap should answer a few basic questions:
Why does our business need digital transformation?
What must be achieved to consider a transformation successful?
What processes do we need to transform?
What phases do we need to execute the transformation?
Who are the stakeholders affected in each phase of the transformation?
A Reminder for Employees That They Are Valuable
The IT department is typically the first place people look to when they think of a digital transformation strategy. That said, digital transformations are primarily a people change. Initiatives to advance technology often affect workgroups, job titles and business processes that team members have been using for years.
As a result, when clear guidance isn't given regarding the proposed outcome, many perceive digital transformation as an ominous force that could take away their jobs. Therefore, leaders must be careful to recognize employees' views and emphasize that few, if any, jobs will be lost due to digital transformation. Rather, organizations can educate team members about their new roles and how an employee's job will be made easier. Reinforcing the enablement of existing team members will result in fewer pushbacks from key end-users and other concerns about adoption.
To address IT and business transformation, leaders need to continue to provide transparency into changes to build trust with affected departments. Doing so can be further supported by opening communication to platforms that encourage back-and-forth interactions instead of one-way communication through a company information board or email.
A Centralized System
One of the significant challenges that users need to consider is efficient information integration. Currently, many technologies operate in silos; your finance team might have one solution while procurement has another. When data is stored in multiple places, teams have difficulties answering simple questions and may not have access to information needed for both innovation opportunities and everyday tasks. Integration to an SAP style business suite of applications avoids wasted time, reduces risk and error, and allows different business systems to be linked and optimization opportunities to be easily identified.
The ultimate goal is to use as few integrations as possible. The more consolidated an organization's central system, the better.
A Clear Method of Measurement
Good Key Performance Indicators (KPIs) should be simple and present information to senior leaders that enables them to gain clear insights into project progress and make decisions accordingly. Digital transformations are not new, and neither are their KPIs. Therefore, ensure that your digital transformation team has KPIs that report on the following topic areas:
Return on investment (ROI)
Agility and the ability to adapt to uncertainty
Innovation and how that impacts a business's ability to remain competitive
Impact on customer satisfaction
Failure to meet or exceed these KPIs may suggest that minor adjustments throughout the process may be needed.
The ConvergentIS Approach
The ConvergentIS team helps organizations enhance their bottom line by taking an approach that relies on change management through user experience. While many organizations hire change management consultants to help implement a difficult solution for users to adopt, ConvergentIS uses a guided process engine to provide step-by-step guidance for complex problems. By creating solutions designed with the end-user in mind, adoption becomes a simple and natural step requiring little to no training.
Our approach to digital transformation extends across many departments, including procurement, where users can leverage a combination of SAP software and out-of-the-box Fiori applications.
Learn more about how you can become an organizational hero by kickstarting a successful digital transformation strategy today.