10 things business leaders need to know about digital transformation
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Article by Greg O’Loan, regional vice president of ANZ for Epicor Software Digital transformation is not just a phase or a buzzword. Business leaders are realising the important role technology is set to play in their growth strategies. A recent Gartner report states that the number of CEOs ranking IT as a priority has risen from 19 per cent in 2016/17 to 31 per cent in 2017/18. As more people rely on connected devices, businesses must adapt their products, services, and processes accordingly. Society and technology are changing faster than most companies can adapt. From enterprise resource planning (ERP) to cloud computing, new tools, platforms, and channels are creating unprecedented opportunities to connect with customers and improve processes. However, only the businesses agile enough to transform and adapt to these new digital realities will be able to achieve the competitive advantage promised by digital transformation. The reality is that digital transformation will require some difficult choices to be made to ensure organisations are not dragged along or left behind. Transformation on this scale will fundamentally shift how businesses operate, so organisations should consider the following 10 key tips to help them navigate the journey. 1. Focus on the right level of change New digital technologies should deliver better, more streamlined business operations that will drive competitiveness and growth. Business leaders should focus on where digital transformation can deliver the most benefits and add the most value. 2. Choose the right technology for the business Technological investment is crucial to growth, however, sometimes less is more. Technology, used correctly and to its full potential, can radically improve business operations by empowering employees, driving efficiencies, and increasing agility. By contrast, deploying technology for no real reason can be self-defeating. Being open to the transformative impact of new technologies is one of the most important considerations for organisations. The latest study from Epicor on worldwide growth trends found that companies in high-growth markets demonstrated a strong inclination to invest in technology to empower their workforces, drive efficiencies, and increase agility. For example, around three quarters (74 per cent) of Chinese firms cited IT investment as important, compared to a global figure of 54 percent. The study also found that 62 percent of Australian respondents agree that IT investment is a high priority for their business, higher than the global average of 54 percent. 3. Consider where the company is on its digital transformation journey It can be challenging for business leaders to keep on top of the latest technology trends and solutions being launched in the market. Different solutions provide new ways for businesses to reduce costs, and improve the customer experience and the business’s bottom line. Many competing technologies profess to drive digital transformation. However, the usefulness of solutions depends on which stage the organisation is at in its transformation journey. 4. To ensure employee buy-in, business leaders must drive the digital transformation process There’s no single roadmap for digital transformation, and the path is different for every business and industry. However, one common thread is that business leaders must attempt to obtain employee buy-in from the beginning. This requires a commitment to digital technology from the boardroom down to all levels of staff. Organisations need leaders with the right mindset and motivation to lead the digital transformation process. 5. Understand and use data for insights Companies that undergo a true digital transformation process place data and information at the centre of their technology-focused business models. Many leaders are shocked to discover just how much information they had available but were not using effectively. Integrated business data is the fuel for any digital transformation journey, so unlocking its value is critical to success in the current environment. The new data landscape provides business leaders with unique opportunities to turn data into insights, with real-time updates powering better decision-making. Forrester research has found that more than 70 per cent of decision-makers use initiatives to encourage more data-driven decisions. Unlocking the value of integrated business data is critical for success in today’s marketplace. 6. Embrace change as part of a wider growth strategy Change is a constant in today’s marketplace. Business leaders must be realistic about what can be achieved in a short period of time. When innovation is driven by rising consumer expectations, growing companies should have specific short-terms goals that embrace innovation and business change as part of a wider transformation journey for growth. 7. Keep an eye on the competition It is crucial for business leaders ensure digital potential is translated into competitive advantage. This requires leaders to champion the deployment of flexible, digital technologies that can change the way the organisation engages with their customers. Gartner states, “Technology shapes business strategy, but market, political and financial factors prevail. Embracing the correct digital technology can bring employees together, let businesses expand into new geographical locations with minimal resources, and make the product development lifecycle more responsive to consumer demands than ever before.” 8. Encourage collaboration across departments and divisions New solutions must be aligned with a bigger mission, such as to evolve internal processes, structure, and culture, or to match the evolution in customer behaviour. However, when new technology is introduced, a disconnect can be created between employees and the challenges the organisation is attempting to solve. Business leaders must consider how they communicate both internally and externally, the strengths and weaknesses of employees as a group, and whether employee skills are fit for purpose. Business leaders should question whether they need staff with more advanced digital skills to assist in the transformation journey. 9. Align with customer expectations The speed at which digital trends are impacting every part of business operations will not slow down. It is the same playing field for all competitors and every start-up attempting to steal market share. Customers expect organisations to embrace digital transformation because they are doing so, and businesses need to join them on the journey. 10. Walk the walk To make digital transformation successful, high-growth companies don’t just pay lip service to ideas surrounding new technology and innovation. Rather, they back them up with investment. Recent research on worldwide growth trends by Epicor found that in the coming year, 88 per cent of high-growth companies are planning significant investments in technology and innovation, while only 49 per cent of slow-growth companies are doing so. Digital transformation is different for every business. While some organisations will have more challenges than others, and some will embrace more technologies than others, being aware of these 10 considerations will help every business that is embarking or has already embarked on this journey.