Digital Transformation in a Traditional Enterprise
There are so many varied ways to define Digital transformation.
It could be the changes associated with the application of digital technology in all aspects of human society.
It could be the automation of processes to make life easy.
It could be some disruption to bring about change in day to day life – good or bad.
Small things like no paper receipt for payroll or no telephone directory in every home highlights how things in our day to day life have changed due to this digital disruption. Digital transformation is here and it is here to stay. There is a need for every CIO (and CFO & CEO as well) to have a defined strategy to deal with the digital barrage that is coming our way – anything from a simple automation to the headache that BYOD and such bring with them.
Digital transformation has the potential of completely change the day to day activities at work as in life and if used wisely can create IT as a profit center – imagine the few digital transformations of our times and then see the huge potential of adding value to the bottom line.
Mobile app for starting heat/cooling in your house so that it can be managed remotely. Huge savings in the heating charges without any disruption in your comfort.
A website that checks all the travel portals to find least price of ticket for your travel itinerary saving your cost every time you travel.
An SMS alert every time your credit or debit card is used.
Though the technology oriented businesses might recognize the change and take the necessary steps proactively, it is entirely up to the IT to drive this change in the non-technology oriented business. This is quite clear from a conversation I had with a CFOs a few years back who said “ERP definitely saves me time but I do not depend on it. My operations can go on for 3-4 days even if ERP is completely down”. Organizations go through a cycle of change – one of my seniors in IT used to call it the enhance->enrich=>transform cycle. Enhance is when organization is still developing the systems that it needs to get the operations running. The ERPs, HR systems etc should be a part of this stage. Enrich is when we bring in efficiencies into the existing systems like controls, processes and create bandwidth in the teams to do more. The last stage is transform where we think of disruptive innovations to do things faster and better.
A close friend of mine once said “transformation starts when we think big. If we cannot think beyond day-to-day then we are not transforming”. To me transformation does not mean big or beyond. The small things can be transformational too. Google doing exactly what yahoo was doing but in a better and quicker way was transformational; WhatsApp doing what sms was doing (well more or less) was transformational. In fact in a traditional organization, we need to think small and lead upto big as acceptance is a big criteria for failure or success in such kind of organizations. Change management in such organizations is sometimes bigger than the implementation or rollout of such projects. You start small and establish an ROI and then take it big.
We in our current organization have taken some bold steps towards digital transformation. We have seen our share of successes and failures but it has opened doors that we didn’t know were there previously. Our sales force automation and branding initiatives are projects we are very proud of. Here however I want to highlight the “think small philosophy” - transformation of our legacy expense management system. Our vision was to take a simple and routine process like expense management and completely transform it into an automated one – starting from employee data entry to money in the bank. A forward thinking leadership, enthusiastic client, good implementation partner, lot of brainstorming sessions, implementation headaches, trainings, robust change management, new practices and processes later we were able to automate the process. Today all this data is available at a click in the enterprise with audit trail at every step. People are able to slice and dice the data as and when they want and are using it to cut cost, plan better and work efficiently. In the first 6 months of implementation, the cancellations have come down by 10 percent which is not a huge number but has opened avenues of data based cost efficiencies within our organization. To the outside world, this might not seem to be a huge thing but for us where data was not used for anything other than clearing expenses – this is digital transformation at its best.
There cannot be a blanket strategy for digital transformation across organizations. We need to encourage disruptions – who knows which mind houses the next Google or Amazon.