Digital transformation is the big business trend of the decade, and technology can radically overhaul a business’s efficiency and competitiveness but digitising processes doesn’t necessarily make them better. Investing in technology for technology’s sake can be an expensive exercise that changes little or nothing to improve business outcomes.
The starting point in any digital transformation is your problem statement: what are we trying to achieve? Is there a problem that needs fixing or a desired aspirational outcome?
How to get started with digital transformation
Listen to your customers, they will tell you their pain points, their frustrations with their spend, actions and behaviour. These problems are symptomatic, and if you follow the value chain you can find the root causes.
Imagine your customers are becoming increasingly frustrated with the cancellations department. It is a point of friction as customer frustration boils over due to delays in cancelling contracts or services. The easy route would be to look at how cancellations are managed, and then change it to become easy and fast. But is this really a win?
Many businesses are constantly fighting fires, reacting to crises by following the noise and then throwing resources at the problem. You might just be treating a symptom. This is like sticking a band-aid on a wound but not addressing the deeper injury.
The more effective strategy is taking a deeper look at why so many customers want to cancel in the first place. If the business focuses on this and fixes the appropriate steps in the value chain, it makes space for innovative solutions, and this is when digital transformation occurs.
Implementing digital transformation that solves the real problem:
- Understand your business problems
Begin by stepping back and understanding how you deliver value. Take an end-to-end view of the business to understand the value chain and how value flows through each step to the end-user or customer.
- Develop an understanding of the processes and the context within which these operate
Once you understand how you deliver value and have a view of the entire value chain, then see how your processes fit into this picture.
- Determine the root cause of the problem
Now you can you look at your business’s processes holistically and explore what is working and what isn’t, and how to fix it. By doing this, you will find the root cause of the key problem, and then be able to dig deeper to fix or optimise the problem area. Do you have too many hand-offs? Are you generating reports no one reads? Are there poor process controls? Are there bottlenecks in the process? What is it costing you? How does it get fixed?
- Fix the process issues and implement a solution that will enable the desired result.
All businesses will have KPAs and KPIs, and (assuming that you are measuring the right things) key process outcomes should be measured against these to determine your performance and desired outcomes against your set objectives. By matching KPA/KPI’s with key process outcomes you can also identify performance thresholds – when are slight deviations acceptable and when should there be an immediate intervention? When you have a clear idea of this you can clearly articulate your requirements, the benefits and the potential ROI of any technological interventions.
Don’t digitise bad processes
When you have the business case, digitising processes makes sense. Any earlier, you might be automating bad processes and end up with bad results faster than ever before. Automation is a factor in improving processes but not the only one. Your processes should enable your people and the business, and digital solutions ensure these processes and people are fully supported.
No process is rigid and there is always room for continued improvement. The best way to develop this deep understanding of processes, and find ways to improve them, is by working with a partner, who brings an external, independent view and expertise to an ecosystem.