Digital Transformation is primarily heralded by Technology, but there is much more to it. How did it come about? In the last 20 years or so, a motley group of disruptive technologies made rapid strides, helping each other in a virtuous cycle of development completely transforming and dominating the technology landscape. The leaders of this motley crew are Cloud Computing, Wireless and Mobile Communication, Internet of Things, Artificial Intelligence and Smartphones. While these disruptive technologies were rapidly developing, somewhat simultaneously, things in the physical world have been progressively replicated in digital form starting with emails and moving on to music, photos, videos, books, newspapers, magazines, radio, television, movies, shops, banks, currencies, wallets, schools, colleges, health records, passports and so on. As a consequence, a substantial portion of human activities and experiences have now been transported to the digital world, that every individual, leave alone organizations need to pay heed and formulate a digital strategy. For those of you who are more technically inclined, I recommend the blog post “The complete and modern guide to technology convergence.” I have reproduced an image here to illustrate the extraordinary technology convergence that is powering the Digital Wave.
Thanks to this amazing digitization of material things and technology convergence, you are able to shop from you home, transfer money from anywhere to virtually anyone, enjoy music while jogging and learn while you commute to your office. This has changed people’s lifestyle in very many observable ways in several aspects of their lives. Therefore as consumers they prefer to deal with businesses and services that engage with them through Digital means. However, this level of living convenience has to be safeguarded with abundant precaution as the theft of your digital identity could result in grievous losses.
Therefore, Digital Transformation in your industry or business on the one requires you to embrace the technology that enables you to cut costs, improve quality, improve margins, achieve scales, diversify and so on. On the other hand it requires you to engage with your customers, suppliers, shareholders and regulators on various aspects of your business using the digital paradigm. Doing so creates new business opportunities for you and the ability to scale your business many times over. If you do employ digital means to engage your customer, but not in a planned manner, you may end up with sub-optimal results at best or compromise your business to cyber threats at the worst.
A good way for a company to start its Digital Journey is to take stock of the important business activities, both internal and external. One should examine the benefits and constraints in digitizing each one of them, along with the cost of implementing the change. The cost of upgrading the skills of the workforce should also be considered. While a company does not necessarily need an outside expert to help them in this effort, expert help would greatly simplify the process and reduce risks. Once a comprehensive analysis of all activities is tabled, priority areas can be selected and taken up for implementation. For instance, if your operations involve Sales, Purchase, Inventory, Planning, Manufacturing, Warehousing, Shipping and Plant Maintenance, you could start with Inventory and then digitally enable its upstream and downstream functions in a phased manner to ensure an orderly transformation that starts yielding benefits almost immediately. When you plan this comprehensively, you are also able to pay attention to proper security, resilience and compatibility with external or partner systems where there are significant mutual benefits.
When you digitize a business activity in your industry, you do not just make the process more efficient, you open up a world of possibilities. For instance, when your entire inventory is digitized, the information can be used in multiple ways to enhance the work experience and quality across the organization like:
- The Sales Department gets real-time information on inventory availability before making delivery commitments to customers
- The Stores Officer is able to optimize Inventory Carrying Costs by avoiding over-ordering and shortages based on sales pipeline and past procurement data
- The suppliers get early signals on impending material shortages and order levels
- The whereabouts of critical materials and their movements are always available on your mobile so that critical theft or loss is avoided
- Physical inventory levels are automatically tracked and reconciled with books to alert any discrepancies, shortages
- Store indenters are automatically routed to the store nearest to them where the required store items may be picked up
Hence the workforce in your organization needs acquire the Digital mind-set whereby they leverage the ability to monitor and handle the inventory from practically anywhere on the planet to make faster and better decisions to improve the quality of work.
Even when there is no planned digital transformation happening in your Company, you may find arbitrary ad hoc adaptations of it in various activities, such as sharing the photographic image of a company purchase order with your supplier to speed up the communication of your purchasing intent and hence speed up the delivery of the ordered items. However, such ad hoc digitisations of your Company will not help you in getting the full range of benefits from it worse, it could lead to leakage of sensitive information and loss of privacy. It is the absence of having a clear Digital strategy that leads to ad hoc and potentially harmful usage of Digital Technology and you should take steps at the earliest to prevent this.
Hopefully, you have gained some understanding in what ‘Going Digital’ means for your business and what it takes. Please watch this blog for updates, or write to me if you want to ask me, or share something with me on the subject. See you until next time!