Sage: How Businesses can Succeed with Digital Transformation
In today's interconnected global economy, technological advancements are fundamentally altering the way businesses operate across all sectors.
Yet with consistently evolving technologies that carry great potential as well as challenges and competitiveness across worldwide industries, it’s overwhelming for businesses to know where to start, let alone how to keep moving.
This shift, well known as digital transformation, involves integrating new technologies into all areas of business to change how organisations operate and deliver value to customers.
The pressure to innovate comes not only from within companies but also from evolving customer expectations and the sheer nature of technology that is ever changing.
Sage, a multinational software company specialising in accounting and business management solutions for small and medium-sized enterprises (SMEs), has collected research and advice from multiple technology companies on how businesses can embrace digital transformation.
Sage says that digital transformation offers businesses an opportunity to "rewrite the rules of business" by leveraging technologies such as cloud computing, mobile platforms and big data analytics.
We take a look at the findings on how businesses can not only adopt and utilise digital transformation, but win with it.
Investing in data-driven insights
Sage suggests that digital transformation can help businesses "shorten the distance between what [a] company wants and what it gets".
We know that technology is hugely improving the speed and effectiveness of companies processes, but Sage highlights that a key aspect of digital transformation is the importance of deriving actionable insights from data.
- Improved customer experience
- Increased revenue
- Reduced operational costs
- Increased business agility
- Better informed business decisions
- Deeper insights from existing data
- An ability to drive new revenue streams with data and intelligence services
Sage says that many businesses find themselves "drowning in data and starving for insight".
To address this challenge, the company emphasises a term by Forrester Research, a research and advisory firm focused on technology and business strategy, that recommends companies invest in "systems of insight".
These systems combine people, processes and technology to effectively discover and apply valuable insights.
Sage emphasises the need for small, cross-functional teams that blend business expertise with technical skills in data science and software development.
These teams should be sponsored by leaders accountable for business income, ensuring a direct link between insights and business outcomes.
Additionally, the company stresses the importance of developing repeatable processes for turning insights into action.
This involves integrating data science, collaboration, governance and agile implementation methods.
Furthermore, Sage highlights a survey by PwC, a global professional services firm, that found that 81% of businesses were either using or planning to use predictive analytics systems.
Predictive analytics uses data, statistical algorithms and machine learning techniques to identify the likelihood of future outcomes based on historical data.
AI and digital ecosystems
The adoption of AI is another significant trend in digital transformation, offering big potential as well as big challenges.
We are seeing the consequences of AI bubbling across matters such as it being used to warp voter opinions for the US elections, for example.
Only confirming the danger as well as possibilities of AI, Sage says regarding last year’s PwC’s Global Data and Analytics survey:
“81% of businesses are using or building predictive systems today (59%) or planned to in the next 12 months (22%)”
Many companies have reported using AI for various purposes, including mitigating security risks, improving business automation and gaining better customer insights.
In light of this, Sage also emphasises the importance of building digital ecosystems.
These networks allow businesses to collaborate with partners, customers and even competitors to drive innovation and create value.
Such ecosystems can facilitate the sharing of standardised digital platforms and foster co-innovation.
George Westerman, Principal Research Scientist at MIT Sloan Initiative on the Digital Economy, says:
"When digital transformation is done right, it's like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar."
Sage acknowledges what can go wrong with digital transformation and the several challenges that businesses face.
These include a lack of executive understanding, existing organisational silos, legacy applications and data without context.
To overcome these challenges, the company suggests a multi-pronged approach.
This includes assessing digital maturity, building relationships between business and IT departments, creating a two-path roadmap for quick wins and long-term platform investments and investing in core systems with a clear return on investment.
"Digital transformation requires a top-down approach with leadership that has created a framework for success", Sage states, highlighting the need and perhaps necessity, for executive understanding and commitment to drive successful digital initiatives.
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