Digitalisation: start now or prepare to fail
Two words have topped the ‘boardroom bingo’ card in the past five years: ‘Amazon’ and ‘disruption’. Amazon is a threat to many businesses precisely because it was such an effective early disruptor and because most businesses did not prepare for the company to go beyond being an online bookseller. When people cite Amazon in meetings, they usually do so because it is the alpha male of disruption. And disruption, in modern business parlance, means digitalisation.
Amazon took bookshops and removed the premises, the cashier and the journey to the shops. That’s digitalisation. Uber took taxis and removed the dispatch centre and much of the ride-hailing hassle. That’s digitalisation. And so on.
Digitalisation is important to your business. If you don’t do it, someone else will. And they will scale faster, work more efficiently and succeed better.
As Andrew Duncan, partner and UK CEO at Infosys Consulting puts it, “digitalisation is the future.” His view is that companies who were slow to start digitalisation have been thrown into a “sink or swim economic landscape” by the onset of Covid-19, a tectonic shift that promises to entrench the divide as businesses weather the incoming recession.
“Before Covid-19, businesses typically took incremental steps towards rolling out digitalisation programmes,” he says. “We are now seeing a widened resilience gap between digital leaders and digital laggards – a gap that is likely to continue to grow during the economic downturn.”
Digitalisation: Covid-led transformations
He points to the competitive advantage granted to early adopters of digitalisation, who were more easily able to weather the onset of the pandemic while others struggled to implement systems to deal with sudden changes to their working practices.
“These companies had a distinct advantage during the outbreak of the pandemic, with stronger capabilities in risk management, greater visibility over their supply chain, and the flexibility needed to make quick decisions and adjustments. As we continue into the ‘new normal’, business viability will only become further reliant on the leverage of available technology.
“This is not just my prediction. The importance of digitalisation in business continuity is supported in the success of the companies which have taken a proactive approach to digitalisation through a decisive and global transformation programme – one that’s a top-three priority for the CEO and driven by management across the organisation. Where digitalisation was once reserved for industry leaders, it is now widely necessary for business survival.”
It’s a view shared by Richard Allen, Director at Infinity Works, who also sees opportunities for the future as a silver lining in the Covid-19 cloud. “The pandemic has placed greater importance on brand loyalty, user experiences, and rapid supply chains to handle often unpredictable demand, he says. “No one knows what will happen over the next 18 months, but the wealth of data that’s being captured now because more people are buying online and via contactless payments will create some interesting data points.”
The data alone, he argues, needs to be marshalled and acted upon. To remain relevant, businesses need to use the data to understand their customers and “create environments where they embrace innovation, accept failing fast, and be able to pivot where necessary.”
Digitalisation: The road to digital nirvana
On paper digitalisation makes sense, but for companies struggling to make real-world progress, the route to digital nirvana is cluttered with obstacles, not least how to begin.
Peter Walker is CTO EMEA at Blue Prism, which specialises in robotic process automation. His view is that the process of digitalisation has to be led from the top. “While IT and technical leaders are vital to ensuring smooth rollouts and the ongoing running of the platform, it's down to business leaders who best understand their operational challenges and demands to make judgments about where digital workers will have the greatest impact on swiftly delivering positive business outcomes,” he says.
“This also means taking time to evangelise the benefits right across the organisation to educate potential internal customers to turn them into positive proponents and adopters of the technology.”
Matt Shearer, Director of Product Innovation at Data Language, says there is “an ever-increasing plethora of ML SaaS products and open-source projects that are making it far easier to spin up new prototypes and, in many cases, show promising signs rapidly,” though he also advocates a ‘look before you leap’ approach.
“Where companies often go wrong with AI and machine learning (ML) is that you cannot use these technologies effectively without truly understanding the challenges they are trying to resolve.
“Too often, businesses buy into technology ‘hype’ rather than solutions that are actually best suited to long-term improvements of their processes. This can lead to solutions being designed around an expensive technology investment, instead of being focused on true problem resolution, and is particularly common when a generic solution is purchased over something specifically focused on their sector or digitisation challenge.”
Digitalisation: Look before you leap
John Appleby, CEO of Avantra, calls digitalisation “an imperative for almost any business to survive today”. He also urges a more cautious approach to AI-led digitalisation. “It’s not so much that digitalisation with ML/AI is easier, but rather that intelligent technologies are a necessary consequence of digitalisation,” he says. “We expect vendors to make purchase recommendations, we expect to understand what other buyers like ourselves are interested in. ML/AI are required to deliver the consumer experience that we expect.”
Culturally, digitalisation needs to be approached holistically, says Duncan. “The transition to digital represents a collective-action problem, and therefore businesses should approach DX as a company-wide solution. From the very beginning, a multi-phase transformation strategy and a detailed execution plan is required, whereby silo walls can be broken down and replaced with open communication channels between every department.”
Collaboration is “key”, he says, adding that it is “not about removing departments or bringing them together under a single umbrella” but “establishing a new mindset: networks instead of silos, flattened structures instead of hierarchies, and speed over precision.”
Companies, agrees Shearer, must “involve your employees”.
“Spend some time and tease the information out,” he urges. “The value locked in their heads is a large part of your core business advantage.”
Digitalisation: Don’t forget your customer
He adds that too many companies think of digitalisation as a single project. “But,” he adds, “This is a fundamental misunderstanding – digital transformation is an ongoing process, rather than one with an end goal.”
In all the back-and-forth about digital transformation and digitalisation, one important element often gets forgotten: the customer.
Michael Chalmers, MD EMEA at Contino, says companies must become customer focused. “To do this they need to drive actionable insights from the masses of data they have at their disposal and ensure they have the capabilities to act upon this information at speed. They must create a data-driven strategy that enables deeply informed decision-making across each tier of the organisation,” he says.
Appleby agrees: “Businesses simply need to put their customers first. What are the customer’s needs? How can we service them? What digital approach do we need to help our customers be successful in what they need to achieve? If we put this lens on our activities, the approach to digitalisation will take care of itself.”
Digitisation vs digitalisation: what’s the difference?
To put it simply, digitisation is a process; digitalisation is a way of doing things.
Digitisation takes things from the analogue world and converts them into a digital format. So entering fuel receipts into a spreadsheet in the back office is digitisation. A film shot in full or in part on analogue cameras must be digitised to be shown on Netflix.
Digitalisation, on the other hand, is the handing over of an entire process to the digital realm. In business, that might mean using Slack or Zoom instead of visiting someone in their office or calling a meeting. In a supermarket, it might mean scanning your own shopping and paying via a self-service terminal.
For businesses, digitalisation represents both an opportunity and a challenge. Done at scale, it creates huge efficiencies in costs and time. But managing the transformation is difficult and it is costly to implement and integrate systems. IT leaders must also weigh the benefits of early adoption against the double whammy cost of migrating to newer technologies later.
Leeds Building Society increased its deployment of digital workers to cope with the high demand for mortgage holidays requests that now exceed 2,000 a day. This is reducing call centre calls by 75% and providing answers to most of these requests within 21 seconds. This also allows front-line colleagues to focus on quickly resolving issues, delivering better customer experiences and enabling back-office processing teams to work on other priorities for the business.
The Royal Marsden NHS Foundation Trust is seeing a significant acceleration of eReferral processing and automation of that workstream has protected its existing back-office resources from the impact of that increase. Automating the private patient billing function has sped up the process and removed processing errors. The team has been freed to focus on developing relationships with customers, and to chase debt in a more sympathetic and empathetic way that only people can do.
Source: Blue Prism