We could write endlessly on the fact that many businesses are now digitising, rare is there a business that doesn’t have a digital implementation plan underway.
Yet, while “digital transformation” has become the buzzword of choice, we are still waiting for a universal acknowledgement of what the term is. It’s this ambiguity that potentially leads many to view digital transformation as merely “hype” and for the topic to become divisive. However, the focus on becoming digital – or being seen to be digital – is arguably not what matters.
BIE hosted a breakfast with senior leaders exploring the role of digital, predominantly within the finance function, and what became clear is the world is now shifting, along with consumer expectations, and businesses must respond to the change.
Here are some of our thoughts from the discussion.
It’s clear that industry is going through unprecedented change with the rise of consumer power, growing connectivity and competition. For the big four, connecting the dots between technology and customer-centricity means a deep dive into the rise of new digital, such as Robotic Process Automation (RPA), Machine Learning, and Artificial Intelligence.
While focus has traditionally been on front-end processes as businesses have responded to rapid changes in consumer demand and expectations, Deloitte suggests that over the next 18-24 months, digital-savvy CFOs and CIOs will also “be developing new digital capabilities in their core systems” as they realise that “efforts to transform customer-facing systems and processes are limited without equally effective and integrated back-office operations.”
The problem is though, while some businesses are making strong inroads, others have no clear meaning on what digital transformation could look like for their industry. As well, efforts to digitise core business practices is not new, and many businesses are still grappling with ERPs and the same data and process challenges they had 20 years ago – and it’s clear that digital is not the magic bullet. Many businesses must first overcome the data challenges and employ the right skill sets to capitalise on the opportunities available – as well as identify where a digital programme would sit within the business and commit to the investment.
It seems therefore that there is not only a digital gap – between how fast technology is evolving and the rate at which businesses can realistically respond and implement new systems. But also a distinction between using digitalisation to improve existing processes and efficiencies in operations to leveraging digital technology to make a business more competitive and even disruptive in the market. As areas such as machine learning are predicted to gather pace, it’s likely the C-Suite will be under increasing pressure to add new models that actually add value to the organisation.
With this in mind, could digital transformation just be hype? Well, we may not see a technology come in and radically disrupt the market overnight, but instead those that are leveraging the opportunities available and addressing the skill set shortage in their business are more likely to cement their place in the future.
In a recent interview with Information Age, Deloitte’s Oliver Vernon-Harcourt explains why digital transformation shouldn’t just be about ‘fixing’ things: “There can be a real danger when approaching transformation that people fall in love with the technology and forget why they need it in the first place. The important thing is to keep the user, whether that is a customer or an employee, at the centre of a solution, then determine the technologies that are needed.”
To this end, it’s the people that own the current processes who can help you best determine what improvements need to be made.
However, our panel agreed that it is also important not to simply automate an awful process. Once you decide to automate a business process, you have the perfect opportunity to analyse and reengineer it. This is no easy task when people within the business feel they have ownership of a process and are more comfortable maintaining the status quo. It requires effective change management and communication to ensure your employees are onboard.
After all, as we’ve seen with new technologies such as expenses software Concur, employees will often go through the necessary steps for a successful outcome when they can see the benefits.
Up until now, research has shown that robotic and cognitive automation are lacking scalable implementation, with few organisations having progressed beyond pilots. But according to several sources, this is about to change. Forrester assert that 2019 is the year businesses will start to use AI and RPA to create digital workers. And PwC predicts a shift from robotics for standalone uses to full integration into a company’s business-as-usual activities, according to their recent Financial Services Technology 2020 and Beyond report.
All this is opening up vast opportunities not just for businesses, but for employees too. Writing for Forbes, Bernard Marr stipulates, “The key to the digital transformation of accounting and financing is pairing people and machines together allowing each one to contribute in areas they are best skilled at.”
While digital transformation has been on the agenda for years, it seems now is the time to bring the right skill sets into the business, refine the plan and get prepared to implement.