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How to build buy-in for digital transformation

(Image credit: Image Credit: Konica Minolta Business Solutions UK )

Digital Transformation is a priority for many CEOs, probably due to the sky-rocketing market share and valuations of tech-led new entrants to traditional markets, but it’s not just Silicon Valley digital disruptors that are reaping the benefits of DX. Across all sectors, digital leaders outperform their competitors. According to a CapGemini report into over 400 businesses, digital leaders - those companies which have successfully adopted technology to transform their business - can expect to enjoy +9 per cent revenue from physical assets, +26 per cent profitability and on average +12 per cent market valuation than their peers.

So how do you go about convincing a business to begin a long and sometimes arduous process to fundamentally transform itself? Some of the more dynamic CEOs/founders can push through digital transformation projects by sheer force of personality, but for most businesses, embarking on the journey to digital transformation relies on a number of factors, critically:

  • Strong business case to build consensus and stakeholder buy-in
  • Openness to transform four main areas of the business alongside the technology:
  1. Business processes
  2. Culture
  3. Customer experience
  4. Business agility

To take these in turn:

Stakeholder buy-in is critical to success regardless, so even the most visionary leaders need to break down the benefits and priorities for a DX project before embarking. Typically, the first focus should be on delivering fast ROI. With the cost of custom development now lower than ever, advanced development platforms speeding up delivery time, plus the advent of cloud infrastructure, it’s entirely possible to deliver transformative large-scale enterprise projects in months rather than years - and at a cost which is within the realms of realistically expecting positive ROI just weeks after go-live.

Wherever possible, technologies should be prioritised that solve the 60-80 per cent of repetitive processes that can generally be easily automated, providing two main benefits: instant efficiency gains on go-live, and building business confidence in the value of DX that can then be leveraged for the next phase of deliveries.

Alongside ROI, an often-overlooked benefit of building a custom solution for digital transformation is that it is an investment in the future of the business. An enterprise solution tailor-made to fit a certain business is an asset, especially when the business owns the IP. Not only does this help increased valuation multipliers should the business be sold, but it also enables companies to offset development costs as capital expenses and even claim R&D tax credits in recognition of innovation.

Transformation of business processes will happen naturally as a result of automation, but this should not be a passive process. Whilst it’s a common mistake to spec the system you want in an ideal world rather than what reflects the on-the-ground reality, smart business leaders know that digital transformation will lead to opportunities to both streamline existing business processes and provide new opportunities to utilise resources in innovative ways to deliver more value. It’s not uncommon to see a DX project used as the foundation of a restructuring or parallel corporate transformation that ensures that people and processes are optimised to exploit the agility and flexibility that a true digital business can offer.

The fundamentals

Similarly, as people and processes evolve, so too must the business build out a digital culture to enable employees to embrace new technologies and the new opportunities that come from DX. It’s common to see companies with custom-built software provide more flexible working, more variety of tasks and faster and more efficient working, but the truly successful projects rely on employees feeling ownership of the technology and seeing their own contributions and ideas brought to life in the system. Only by building an inclusive culture and encouraging shared ownership of the transformation project can executives unlock the value that the expert users possess.

Improving the customer experience is another fundamental part of delivering a successful transformation. At an initial level, this may simply comprise faster service due to improved efficiency, or a reduction in errors and resolving complaints faster due to increased transparency, but in the medium to long-term true digital transformation will allow a business to increase customer engagement through the provision of richer data and a customised experience. Oftentimes we see digital leaders providing a level of service that outpaces the competition to the degree that customers will not consider using a competitor - whether this is the provision of customised corporate booking platforms for travel providers or MI information and audit controls in the security sector.

Finally, DX provides a basis to exploit the opportunities offered by the increased agility that a Digital Leader possesses. With a flexible enterprise system and developer resource on hand, businesses can develop new technologies quickly in response to changing market conditions. The best companies do not have a crystal ball to see future trends and new market requirements before they happen; they have the technical know-how and agility to build and deploy new solutions so quickly it appears that they can see the future. Whether it’s working with a new partner or platform, bringing a new customer app to market or exploiting new technologies such as AI, agility should be prioritised as an early stages benefit of a digital transformation program that builds confidence and delivers clear benefits.

To conclude, it's clear that digital transformation should be the foundation of most companies’ short to medium-term planning, as it’s certainly on the competition’s agenda. Whilst there are a multitude of approaches, the foundation of any successful project will be to plan a clear route to go from today to the DX future and be transparent on prioritising early ROI and stakeholder buy-in. In the current tech landscape there is no reason for companies not to consider building their own proprietary systems, combining their own domain expertise with internal or external development teams, to build a forward-looking software development capacity that both delivers value now, and supports the business evolution, success and rapid scaling that true digital transformation will inevitably bring.

Alistair Laycock, Custom Solutions Director, Haulmont UK