We live in changing times – as John F Kennedy said fatefully: “Change is the law of life. And those who look only to the past or present are certain to miss the future.” And how things have changed since he said that back in 1963.
Business transformation vs digital transformation
In 2020, transformation has become an imperative for most businesses. And it seems that the terms, “Business Transformation” and “Digital Transformation” have become synonymous. But they are significantly different. Digital transformation is just one element of the whole transformation landscape.
Businesses that were thriving 50 years ago are struggling to adapt – think of the companies that have gone out of business in the last year, particularly in the retail and manufacturing sectors. Failure to change quickly enough has contributed to their downfall. Also, in the professional services sector, technology and legislation have had a massive impact and firms are adapting.
A holistic, strategic vision
Although the word is often used as a euphemism for cost cutting, true transformation needs to look beyond tactical measures and should have a vision for the future of the business. Automation of standard business processes may drive leaner, more agile workforces, but tactical cost reduction exercises will not achieve the holistic changes necessary to remain competitive.
Business transformation is more than process change, it must embrace cultural change. It needs to cover every aspect of the business – from production (whether services or products, every business produces outcomes); sales & marketing; technology platforms; supply chain; purchasing; accounts and administration; and HR.
Before embarking on the change programme, the overarching objective for the transformation should be assessed. Where does the organisation want to be in five or ten years time? Does the business want to be bought or to grow by acquisition? Are there longer term ambitions? Consider whether the transformation needs to be radical or just an adjustment for added value creation? Have changes already been implemented and are these right for the business? Transformation will be a journey for any business that should be mapped out, with benchmarks agreed to help assess the path to change.
Appoint a transformation director
The business should appoint an executive to direct the transformational programme – transformation cannot be agreed by committee , although all stakeholders need to agree or if they can’t, compromise must be achieved
The transformation programme director needs to have strategic vision, understanding of the business, negotiation, diplomatic and persuasive skills. It also helps to have financial acumen and understanding. It may often be the CFO who takes responsibility for business transformation. And the role of the traditional CFO is changing as businesses evolve.
The digital aspect
Digital is one of the strands of business transformation – which will help to improve processes and make the organisation more streamlined. Digital transformation will cover a range of technology tools and platforms. Examples of digital transformation can include adoption of a cloud platform to improve business agility, or an ERP system to integrate business processes.
Does the transformation director need to have IT skills to ensure success of the digital transformation aspect of the programme? It helps to have an understanding of the latest IT developments and what they can deliver for an organisation, but it’s not really necessary to be an expert. That’s where your IT consultancy comes in to advise the business on the optimum IT strategy to fit into the business transformation strategy.
We will look at digital transformation and how it can be an essential element of business transformation in our next blog.
For more information on how Orca can help you with your digital transformation, contact us.