Digital Transformation happens when a business decides to improve its operations using technology. The technology used could range from ERP or back-office software to e-commerce systems to speed up order entry and fulfilment.
Companies that back themselves started and completed the initial work to improve their businesses using technology. Since lockdown, we’ve observed many companies are struggling, not financially, but rather operationally due to delayed shipments and shortages both in stock and labour. This has meant these vital transformation projects have been put on the back burner for a while, even though they will help with some of these issues.
This is behaviour we have seen for quite some time. Business owners who run multiple projects simultaneously, end up with delayed projects because their priorities are split. Some companies work with advisors, coaches or consultants to help them prioritise the projects to make the most significant improvement.
When IT projects are prioritised, these companies have the largest growth. We’ve not seen it just a few times; every client we’ve worked with that have prioritised this Digital Transformation has grown.
What can you expect from a Digital Transformation project?
Additional capacity – There is an initial thought that there will be cost savings, but this seldom happens as the businesses realise they needed the free up capacity of one or more key people, so they get more business through their systems rather than lay people off.
You’ll find new problems – Once a key constraint is flowing better, companies will have a raft of new problems come up. We’ve warned clients of these before they arrive and help them resolve these problems quickly.
You’ll wish you’d started sooner – Working on the project requires a lot of hard work and more hours tidying up data etc, then you’ll see the return and want to get it done faster. This is a comment we have heard many times.
What stops companies from transforming their business?
Companies delay these kinds of projects because they are close to retirement or selling their business. This means they don’t realise the maximum sell price for their business – just ask any business broker. Mostly though, it’s fear. Business owners have heard some horror stories or had one themselves.
We always advise companies to find out what a provider is like to work with and hear that things don’t always go to plan. It’s the hard work companies put in that make their transformations a success; their partners are there to support them in the areas they don’t have expertise in.
Where should you start?
Work out what process or system is causing you the biggest headache, then get some help to determine if that is the problem. Many advisors have experience across many industries, so see common issues. Some issues might not be in the place you think they are, so having a second pair of eyes can help clarify the issue.
Decide you want to solve a problem, and work out how much that problem is costing you. Often, a problem is costing you much more than you can easily quantify.
These problems are worth solving first. Then you’ll find a string of related problems that can be solved at the same time.
