Digital transformation will be different for every organization. Generally speaking, however, it is the adoption and integration of digital technology into products, services or operations, resulting in fundamental changes to how businesses operate and how they deliver value to customers.
The goal of digital transformation is to increase value through innovation, invention, customer experience or efficiency. It’s also a cultural change that requires organizations to continually challenge the status quo, to rethink old operating models, experiment more, and become more agile. While data analytics, technologies and software enable digital transformation, they do not drive the process: at the heart of its success, lies culture and leadership.
Here, Keith Hausmann, Chief Revenue Officer at procurement provider, Globality, shares his insight. “The purpose of digital transformation is to render operations more autonomous, but in a way that is intuitive, insightful and smart. We need to view this technology as a consumer would. It should be on a par with what we use in our personal lives. While it needs to be appropriate for an organization’s procedures and policies, it must incite enthusiasm, add value, and enhance ways of working. It’s much more than applying a standard process across the board, it’s about making processes better, smarter and faster.
“An important consideration prior to embarking on a digital transformation program is organizational engagement. While the word mandate can be controversial, and every organization should have the option to conduct business as it sees fit, if there is a need or a problem to be resolved, people have to collectively change how they work. That said, if changes are to be made and mandated, they should be made in a way that adds value, and is easy to adopt enterprise-wide.”
Keith continues: “In recent years, the enterprise technology world has been dominated by a handful of Enterprise Resource Planning (ERP) software systems, which were never really designed with this more intuitive, consumer-centric approach in mind. As a result, in the last two-to-four years, there has been a proliferation of technology companies trying to effect change. Enterprise technology is behind consumer technology, and while some operational functions may have moved faster on this continuum than others, there is still a way to go across the corporate board.”
Indeed, evaluating older operating models is an essential part of digital transformation, but so too is an understanding of the capabilities of digital technology to modern enterprises. “If, for example, an organization is avoiding supply chain disruption and catastrophic risk or making a modicum of savings, this may be enough for some C-suite decision-makers,” Keith explains. “However, it’s important for leadership to understand what is possible in terms of digital transformation. Taking procurement as an example, how much more value could be extracted from that function? Procurement is responsible for managing and dealing with thousands of suppliers and millions of dollars of spending. Additionally, 75 percent of the carbon footprint of a company is actually attributable to its suppliers and not the company itself. This is just one example of the many aspects of an organization’s operations that can be transformed by digital processes.”
Keith goes on to discuss the industries that are more attuned to digital change: “The financial services market works at a much higher pace around digital transformation. These organizations know how their consumers interact with their products, and have been driven to make digital changes internally. The life science, Consumer Packaged Goods (CPG), and tech and telecom markets have also been driven by their consumers to be more digital and more automated, whereas the manufacturing, oil and gas, and public sectors, for example, tend to be much less digitally driven. Re-fueling at a service station is no more a digital experience than it was 30 years ago. However, the way customers interact with a telecoms company has changed massively over the last 30 years. As such, many companies have internalized how they deal with their customers and have adopted this approach for their employees and ways of working.
“This has undoubtedly been exacerbated by the pandemic. The way in which people interact with each other has changed fundamentally, and has trended towards digital interaction. While this may be more evident in some sectors than others, there has been a shift towards making functions more autonomous. For all intents and purposes, the pandemic is effectively over, yet, the way in which we interact with each other has probably changed forever.
“Furthermore, I think people using technology expect their experience to be increasingly personal, and data is the driver of personalization. It is the fuel for making a process insightful or smarter. People want to make informed decisions, and data provides a perspective from which to assess or rank information.”
Best of both worlds
When discussing the merits of digital transformation, Keith believes that we’re often hardwired to assume machines and algorithms harbor bias. “It’s crucial for companies like ours to be really thoughtful about how not to let algorithms and machine learning perpetuate bias. I have had conversations with many customers surrounding bias, and always return to the thought that a human making a decision with no information at all will have as much, if not more, bias than machine learning or algorithms. What we are trying to do is overcome human bias with real data and insights. To me, the best of all worlds is when human judgement is combined with machine learning to come up with the best decisions. This is how we work at Globality: knowledge is combined with analytics and insights that are derived from data to make a holistic decision.
“There is real value in championing and investing in digital transformation. From the perspective of procurement, for example, whether in terms of savings or supply chain resiliency, it’s important to understand what is possible. Technology is ever-evolving: what worked ten years ago may no longer be relevant today. To deliver digital transformation, organizations need to view the process through the appropriate lens.”