Is Your Business Ready for the Coming Digital Transformation?
The COVID pandemic may have accelerated the trend towards digital transformation, but it was coming nonetheless. Take steps to make sure you don't get left behind.
Thanks to the vaccines, the COVID-19 pandemic may be entering its later stages, but it has already upended everything we were previously accustomed to. For businesses and economies in general, the effect has been quite drastic. Businesses of all sizes have had to deal with interruptions to supply chains, increased workforce risks, shifting customer demands and, perhaps most importantly, the need to accelerate digitization to cope with the changing workforce structure.
A report by Gartner projects that the ongoing digital transformation will affect about 70 percent of organizations by the year 2025. The report is not unrealistically optimistic, however. A wide-scale shift to embrace the use of digital tools will have plenty of challenges. Organizations will have to work hard and be creative if they intend to improve their efficiency and meet these obstacles.
Constellation Research and WalkMe conducted a joint survey to get insight into the objectives of CIOs amidst the ongoing digital transformation. The survey relied on data from hundreds of CIOs in charge of well-known firms. The aim of the project was to determine the strategies that CIOs and IT experts put in place and the goals they hope to achieve. The survey highlighted that a majority of respondents’ strategies centered on automation and cloud computing resources. In fact, 51 percent of the respondents favored automation to mitigate disruptions.
The coming change isn’t just theoretical, either. Companies are making material plans to prepare for the future. According to the study, 77 percent of CIOs prioritize digital transformation in their budgets, showing just how important a role digitization plays in ensuring business continuity.
Companies choosing to prioritize digital transformation is not a surprise considering the impact that the coronavirus pandemic has had on businesses globally. Firms have had to digitize and adjust their operational models for better results. In fact, one KPMG study found that about 74 percent of U.S. CEOs had seen their companies accelerate digital transformation in a matter of months, all thanks to the pandemic. So, let’s take a look at what this digital shift might entail.
Preparing for Transformation
CIOs should use the Plan-Do-Study-Act (PDSA) framework to determine the specific technological goals they would like to achieve. PDSA is an evidence-based approach that allows for effective changes to plans.
Once the company develops goals and key performance indicators, the organizational leaders can collect data on the various applications offered by the cloud vendors. The third stage of the PDSA entails a trial-and-error testing approach, whereby prototypes are integrated into business networks to determine whether they meet the needs established. As a result, the final stage allows you to adopt a solution with confidence since the ideal applications have been selected.
After completing the PDSA analysis, companies should be prepared to upgrade their processes. At this point, they can take advantage of cloud computing vendors like Amazon Web Services to meet digital transformation needs such as enterprise applications, analytics, developer software, networking and database solutions. This is a cost-effective solution, too, as it’s much cheaper than developing software systems in-house from the ground up.
Each organization’s specific needs and budget will determine which tools will best fit its goals. Therefore, businesses would be wise to test various applications to determine if they can be aligned with their core objectives. Fortunately, many IT services vendors allow trial periods to test applications for free before committing to the software, which allows you to experiment and make sure a product will work for your business.
Employe-focused Digital Transformation
Remote work has been one of the key business functions for companies during the past year. Most businesses are likely to retain many aspects of the shift to remote work, even after the end of the pandemic.
Ironing out the finer details of collaboration and remote work is often a challenging affair, however. Businesses usually need to align their workforces with the right tools for effective collaboration, which can be an uphill task for startups and small businesses without sufficient financial resources. Fortunately, companies can pick from a range of applications like Proofhub, Basecamp, Instagantt, Troop Messenger and Slack to enhance collaborative procedures.
Of course, because preparing for this new normal requires extensive changes to employee interactions, there’s always the possibility that people will resist change. Another benefit of the PDSA approach is that it incorporates employees’ perspectives into the decisions affecting them. They’re involved in the planning, data collection, testing and implementation of the applications to ensure that they assume ownership of the changes. By encouraging commitment from the staff, the CIOs can learn about how the digital transformation will impact the different departments of the organization. Therefore, the organization can address resistance to change can be addressed proactively by incorporating the feedback from the staff throughout the PDSA cycle.
Prime Your Strategy for the New Normal
Reshaping business strategy is an important step in ensuring business continuity. For example, the pandemic brought with it immense disruptions to all levels of business. Companies that relied on supplies from China, for instance, could not receive goods in a timely fashion. Supply disruptions can undermine business continuity, indicating a need for innovative sourcing techniques to mitigate potential shortages.
To manage supply change challenges, CIOs should evaluate short-term liquidity. By instilling short-term and long-term monitoring protocols, organizational leaders can anticipate cashflow pressures and introduce interventions in a timely manner. Pulseapp is an example of a software application that can assess short-term liquidity. Alternatively, you can apply the PDSA protocol to test the offerings from cloud vendors such as Amazon Web Services, Google Cloud Platform and Microsoft Azure.
Establishing strict approaches in managing receivables and inventory build-up can provide companies with the flexibility to adjust supply chain patterns as soon as a need becomes clear. For instance, a company can centralize working capital operations and develop appropriate metrics to gain a clear picture of the causes of delays.
Tie It All Together
These strict approaches to managing working capital can improve risk management outcomes as you can identify and avert ineffective agreements with unreliable suppliers. Communication strategies can also play a significant role in mitigating risks. By maintaining regular contact with suppliers and clients, businesses can identify cost and price escalations and their impact on product margins.
For instance, as soon as the prices on commodities increase, organizations can engage their consumers in focus groups and use surveys to collect data on their attitudes relevant to the emerging pressures. Furthermore, in scenarios involving price increases, discussions with suppliers can lead to mutually beneficial arrangements such as adjustments to payment patterns and durations. In some cases, convincing a contractor to extend the payment duration for commodities can free up working capital.
The measure will be instrumental in re-negotiating new terms and conditions to ensure business continuity. Companies that are slow to re-negotiate terms with suppliers and customers are likely to lose out due to the financial strain imposed on their supply chain logistics.
Success in digital transformation is measured by the value created when people work with technological tools. These tools should make employees more productive and not have them struggling to cope. As a business trying to adapt to the new normal, ensuring your business survives this crisis shouldn’t be a short-term endeavor. Find ways to make your business resilient during this and future crises to ensure long-term business continuity.
Author: Vikas Agrawal