Digital Transformation: what it is, why change and how to change
A definitive document to undertake the innovation process in your company
8 min.Digital transformation is what happens when companies rethink the way they do things or provide services in terms of what is currently possible, using technology.
What does the term Digital Transformation mean exactly?
Like most buzzwords, “Digital Transformation” means something different to almost everyone. Companies that are successful with this approach are using innovative business management systems and putting the customer at the center of everything; In addition, they are automating their processes and creating new business models.
Shortly…
- They use less pencil, paper and spreadsheets, and more online management applications.
- They use fewer of their own servers and more cloud storage space.
- They are customer centric (the customer at the center of their activities).
- They are more connected: both company employees and customers can be in their city or on the other side of the world.
- They redesign their processes so that the flow of data from marketing, sales, services, operations and logistics are interconnected.
- They modernize their delivery services.
- They exceed customer expectations.
They use data to make their business decisions.
Why should you transform your business?
Digitalization is influencing all aspects of our daily lives. Competition is increasingly complex, more demanding and more global, and is different from previous forms of competition, since it competes with other tools.
In this new competition there is no longer a place for companies with manual activities, repeated data entries, few or non-existent controls, multiple data sheets scattered throughout the company.
To face these challenges, companies must transform deeply, entering the digital world. That is, they must achieve a total change of mentality.
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What should we transform?
1. Company Culture
Any tool is useless without a goal, a process, and an experienced guide. When implementing new software, you need to ensure that every user in the company knows how to take advantage of it. Additionally, by supporting and incentivizing continuous learning, improvement, and innovation, business leaders will make adapting to change much easier for their employees.
We must align the company culture and the team’s perception.
If using any tools and software is perceived as an unnecessary task added to your daily work, you may want to start your digital transformation by increasing your team’s digital IQ. Simply investing in tools is no substitute for innovation-oriented leadership. If you have ensured that your team’s knowledge and capabilities meet the planned changes, move on to the analysis phase of your processes.
2. Work processes
New technologies allow you to carry out processes in a different way. In a fully connected, more efficient way, eliminating repetitive tasks. So this is an excellent time to analyze your old processes in depth one by one and redesign them, adding the available technology and making your flows more aligned with the best practices in the industry.
The tools you will evaluate in your selection process may already have incorporated many of the best current management practices of companies.
Let’s look at four processes that you should analyze:
- Commercial Processes
- Operational Processes
- Customer experience
- Technologies in Product Development
Tip: Take advantage of this moment of analysis and process design to incorporate the Good Practices of your Industry.
3. Integrated System
The first and most important step would be to integrate the right software and tools to fully support your processes.
What do we mean when we say Integrated System?
An Integrated System is one that accompanies all of your company’s processes from start to finish, reusing all the information that the system already has. All in the same environment, without using accessory or complementary tools..
This way you can follow the flow of processes with a single system.
Depending on the type of industry, the processes would be:
- Customer budgets
- Collaboration between staff
- CRM
- Sales orders
- Billing
- Financial administration
- Manufacture
- Warehouses
- Logistic operations
- Human Resources
- Control panels
You no longer have to enter the same information multiple times into the system. It is the software that suggests what you should do and accompanies you in the workflow. From beginning to end.
How should we transform our business?
1. Align your team
The transformation strategy must come from the company by thoroughly analyzing its current processes, activities and tools, followed by the search for solutions available on the market.
In the analysis process you will need to map in depth the current workflows and discuss the main areas of improvement and transformation. This is a fundamental job and in many cases it requires the support of professionals who are experts in the business processes that you want to transform.
2. Select the best system for your company
Once you are clear about your needs and requirements, you should start searching for available solutions that meet the requirements that were determined. You can read more about this topic here.
Note that the best time to start this project was yesterday, and the second best time is today.
What options are there?
Type of system:
- The best system for each functionality (best of bread): choose the best option for each necessary functionality.
- Comprehensive system: A single system that covers the necessary functionalities. End to End.
Deployment type
- Cloud Software
- Software installed on own servers
3. Determines the bases for evaluating the System
The system selection process can be a complicated process and to counteract it you must create an objective methodology for its evaluation. Here you can read how to manage the selection of an ERP for a medium-sized company.
- Write a document with your Software Requirements
- Determine what you want to see in vendor demos
- Conduct a survey in the Software market and make a list of suppliers to contact
- Evaluate each presentation from 1 to 10, with regard to the system and the solvency of the consultants
- Analyze the strengths and weaknesses of each system
Other important elements to take into account:
- Data migration
- Gap Analysis Process
- Management of Flow Tests and Verifications
- Customizations
- Possibility of integrations
4. Find out about the policies of the system provider’s new updates
A good software provider will keep its functionalities updated, so your company will be technologically protected for a long time. But you must delve deeper into these aspects.
Ask yourself what the updates were, for example, from the last year, what functionalities were incorporated and most importantly, what is the roadmap for the next 2 years. There you can see what the concern of each software provider is and what they plan to evolve.
A good software solution will support you now; An excellent one will help you be prepared for the challenges to come.
Cloud systems are the only ones that guarantee that your software will always be up to date.
5. Take care of people
In every company, there is a way to run your business. The reality is that in all companies there are workflows. They may be using manual processes, pencil and paper, spreadsheets, or simple, disconnected systems.
And these “old” ways of managing the company must be transformed into the “new” ways of managing it. This moment of transformation is a delicate moment, where the most important thing is people .
Support, training and supervision are key at this stage, and we must never forget that the systems do not perform the tasks, it is the people who perform them.
Digital Transformation with Comprehensive Management Software
The comprehensive management system transforms and streamlines crucial company processes by integrating processes, people, customers and suppliers. This helps your organization increase efficiency, centralize information, data accessibility, reduce time loss due to duplicate data entry and as a result increase business profit.
Choosing a comprehensive solution over other options that include multiple tools will save you a lot of time in the setup phase and even more in the long run. You won’t have to worry about entering data from one tool to another, nor will you have a partial view of your company depending on the tool you look at.
Conclusión
In 1998, Kodak had 170,000 employees and sold 85% of all paper photos in the world. In just a few years, his business model disappeared, leading him to bankruptcy. What happened to Kodak will happen to many industries in the next 10 years (and many people don’t realize it!)
Did you think in 1998 that 3 years later you would never take photographs on paper again? Digital transformation has been a rapidly evolving process over three decades, but even more so in the last one, where this transformation became exponential.
For your company to remain competitive, make sure to invest in these two aspects:
- increase your team’s digital skills
- implement modern technological solutions throughout the entire company
The benefits you will obtain will be very deep and extensive, you will be able to face the changes that are coming in a more confident and competitive way.
The enterprise software market has been dominated by single-function, disconnected tools and technologically outdated and primitive systems. The growing complexity of the near future will demand a significant increase in the functionalities of IT solutions and a need for immediacy and comprehensiveness of management. Everything connected, everything available, everything online.
Therefore, don’t let yourself be overwhelmed by the digitalization train: get on and see this new reality for yourself!