James Adams, Managing Director, Akcela
It seems whenever we hear the term digital transformation, whether known to us or not, our minds will wonder to bleeding edge technologies, teetering on the edge of the latest Gartner Hype Cycle. The truth is for some businesses, and many people, they don’t actually know what a Hype Cycle is, or why it’s relevant for their business. Mostly, in fact, it isn’t. There is, however, a reason that simple digital transformation projects get lumbered into this category and leave many continuing with business-as-usual processes.
The rationale of digital transformation aversion.
There are many a thing that can leave business owners and leaders operating in a place they don’t feel comfortable. The two that generally have people concerned, out of their comfort zone and reaching for support are Law and Accountancy. When you think about it for a while, it isn’t hard to understand why. As a much younger man, I studied Law at A-Level, but even at that simplistic level, terms such as Actus Reus, Mens Rea and causation are common place in the classroom, but absolutely useless in any context apart from the one they were intended. There is a knowledge gap with law that the simple common-sense approach just doesn’t cover, nor prepare you for.
Further to this, like it’s contextual sibling in this ramble, Law and Accountancy have a much larger and ominous threat to business leaders and their owners. That of risk. Get your legal documents bent out of shape and the ramifications can be catastrophic. The same is true of accountancy, where application of any creativity can lead you not to an award for innovation, but to a stint at Her Majesty’s pleasure.
With digital transformation projects and delays associated with them racking up headline numbers such as £173m for digital border transformation delays, or £100m bill to the television licensee payee for the BBC’s failed DMI project, there’s an associated risk of implementation with any digital transformation project. Not to mention those projects that gain funding and implementation leaving you questioning if they ever had a benefits realisation meeting, and oh to be a fly on the wall in one. Whilst we live in a world of digital technologies creating umbrella drones. Perhaps benefits realisation isn’t always the motivating driver. Really, this is the absolute crux of the matter.
What does digital transformation really mean?
Digital transformation doesn’t have to be large scale. Doesn’t have to be bleeding edge and doesn’t have to include budgets that would make McDonalds’ land bank manager blush.
In fact, digital transformation is more tangible, costs less and delivers higher value returns now, more than ever. Yet despite potentially tremendous benefits, small and medium-sized enterprises (SMEs) lag in the digital transformation.
When considering what digital transformation is, every business leader and owner can relate to e-commerce or the social media, frankly, because the likes of Amazon or Facebook (yes, it’s still called that, it’s just the holding company that’s now Meta ????) are ubiquitous in our daily lives.
E-commerce has been an incredible benefit to drive top line revenue into businesses, accelerated by COVID-19, and we should continue to press the adoption of online retailing within our SME community. I have the same opinion for social media uptake, which can offer truly incredible insights into customers through data aggregation. However, as with all opportunities, we must focus on the deliverables of said project. Or to my earlier point, we would be walking around with drone umbrellas, potentially when it isn’t raining.
Digital transformation has a much wider net that can be cast and for many businesses just as big, if not bigger, fish to catch.
Enterprise Resource Planning, or ERP systems integrate the fundamentals of business processes into a holistic operating system. An ERP will typically consist of accounting, procurement, project management, risk management and compliance, and supply chain operations. Having such a large volume and veracity of data through every facet of their business allows leaders to make well informed decisions due to the integrated nature and usually, when implemented correctly, outcome of real time data. Business processes are usually streamlined prior to integration, resulting in back-office efficiencies of moving to a digital platform. Of the many digital transformation opportunities discussed, ERP implementation is one of, if not, the largest opportunity as well as potential failure point.
Client Relationship Management (CRM) and Supply-Chain Management (SCM) can digitally enhance two major touch points within a company. Whilst many providers may integrate CRM and SCM solutions into one package, these functions can also be implemented independently to great effect. Here transparency of interaction, time-based interaction management, automation and business intelligence can optimise performance within a business. For example, understanding the last purchase or interaction with a customer can drive marketing campaigns to increase sales revenue. Real time information on supply chain management can reduce costs through improved quality control, on-time deliveries, stock optimisation and much more.
Cloud based ICT and cloud-based accounting. Putting these two in the same pot is a bit of a stretch, but for the sake of this article spanning the time it takes to drink your morning coffee. Needs must. Cloud based ICT offers a number of security benefits and also reduces the need for costly on-site networking and infrastructure. Moving to office 365 is an incredible start, but there are many more opportunities for businesses to exploit. Cloud based accounting is much more prevalent today, especially since the implementation of making tax digital. It also offers a greater level of transparency and accountability within teams, used correctly.
Digital transformation, what’s needed for implementing technology?
Digital transformation will always require capability in four cornerstone areas – the technology chosen, the data input, adaptation of the process being augmented and the organisational change that follows. In our experience of offering digital transformation and technology implementation consultancy we will usually be required to support businesses in each area. Our approach is broken down into three areas, encompassing each of the above.
Discover
Through the discovery phase time where the pain point is and what the improvement looks like. We will work to understand what the process is today, what the data is today and what the organisation looks like today too. Discovery is key because defines not only where we are today, but informs how we get to where we need to be tomorrow.
Define
The define stage takes all of the learning from the discovery phase and defines the future state. Choosing the right technology to deliver the required output is key. Too many times we see businesses augmenting software to deliver a required output, because package A was of choice. Understanding the current process and requirements or matching a process through redesign to a required outcome really can save time, effort and heartache. The technical term for this is business process reengineering consultancy – funny how we can make everything sound much more complicated than it really is. There’s a lot of sticky notes involved with this.
Define will then match data and process to the chosen system and outline the organisational alignment for delivery and ongoing use.
Deliver
The tip of the iceberg, but the piece that everyone remembers. The delivery phase executes and implements all the above into the business. Care is needed through this phase in ensuring that organizational change is delivered, but just as importantly, that the outlined deliverables are achieved.
Digital Transformation for SME’s
Throughout this discussion, we have moved into more high-level concepts around CRM’s and other words that again make digital transformation less tangible. The truth is, there are many simple to implement opportunities in this market, that feel infinitely more achievable. Companies like Hubspot, Capsule, Salesforce etc., make the implementation seem relatively mainstream. The key to starting digital transformation in your business, is to start thinking of digital transformation in your business. Hopefully this article has helped that happen.
About the Author
James Adams is the Managing Director of Akcela, a management consultancy company based in Norwich that supports Startup, Scaleup and SME businesses with business incubation, digital transformation and technology implementation consultancy as well as developing the next generation of software engineers through the Akcela coding bootcamp.
