The 5 Most Common (Dangerous) Misconceptions About Business Digitization
For most business leaders, it's hard to understand how the struggle to digitize – afflicting the majority of enterprises today – could be so pervasive. According to McKinsey, over 70 percent of digital transformation efforts initiated by businesses fail to reach their stated goals.
How is this possible? Over 70 percent fail.
In the words of Gartner, “Digitization is the process of changing from analog to digital form” – a definition few would disagree with, and one that sounds objectively straightforward. And yet, leading global enterprises, high-growth businesses, Fortune 500s: they're all failing to make the digital transition. And it's costing them massive sums of cash.
Inadequate technology is an oft-cited culprit for digital shortcomings. According to a survery by Accenture Strategy, 85 percent of executives stated that legacy technology was stalling their business digitization initiatives.
Other studies point to low employee engagement, a lack of management support, nonexistent cross-functional collaboration, and a lack of clear accountability.
In short, the answer to the "why" depends largely on who you ask.
What is clear, however, is that the majority of digital shortcomings can be connected back to unclear alignment on behalf of the internal, digital process stakeholders. What does it actually mean to digitize business processes? What elements of the business do we need to digitize? How are we actually going to digitize?
To succeed at business process digitization, a highly-structured and aligned approach – encompassing the “what”, the “how”, and the "to what extent" – is a mandatory prerequisite. And in order to build that approach, stakeholders and decision-makers need to actively part ways with the following misconceptions about digitization which may be hampering success:
1. Business digitization will happen naturally over time
It sounds too good to be true and it unfortunately is. Digitization is a significant change effort. As any significant change effort, digitization needs to be an established, clear priority in order to be successful.
If digitization is not specifically prioritized, manual processes stick around, and spawn additional manual processes within the organization over time. By contrast, when managers and their teams make digitization a priority – for example, as a concrete part of their monthly review meetings and quarterly goals – change happens.
Digitizing manual processes is not hard with the right, modern digitization solution in place. But in the same way that a person needs to prioritize healthy habits – like working out and eating healthy – in order to get into better shape, organizations have to make digitizing processes a clear priority in order to achieve the immediate and long-term benefits of end-to-end digitization.
2. Business digitization will be taken care of by our IT and digital teams
You've already built state-of-the-art IT and digital teams, filled with top talent and best practice methodologies that your competition admires and envies? That’s a great start.
However, even the most advanced IT and digital teams won’t be able to deliver end-to-end digitization across your business single-handedly. Their backlogs are chronically filled with customer-facing product work and initiatives to improve the top 10-20% of highly-repetitive processes. Everything else gets left behind, or will take literally years to become a clear execution priority. And that's just the beginning of the solutioning process.
It is true that a strong IT team can enable higher-quality digitization results, but the uncomfortable truth is that there will always be too much to do and too little IT resources available to get it done. To make digitization happen across the organization, teams have to take matters into their own hands and address the 80-90% of manual processes that don’t make it through the ever-growing IT backlog.
3. Business digitization projects require significant upfront investments
Legacy enterprise systems such as ERP systems, CRM systems, and proprietary software are difficult and expensive to change. As a result, businesses almost expect any digitization project to require significant upfront investments into software development resources, consultants, and technology.
In contrast to legacy enterprise systems, modern digitization solutions allow teams to digitize their business themselves at a fraction of the cost of previous solutions. Besides the monthly cost for the software solution, the only operational costs are the few dedicated hours that operations teams spend in order to first digitize their processes, which represents a fraction of the time they would otherwise spend on explaining their problem, and aligning on the solution with legacy system providers.
Using a modern solution, the ROI for operations digitization projects is typically achieved within the first month of implementation. This is true even for more complex and less repetitive operations processes, which previously would not even be considered for digitization with legacy enterprise systems capabilities.
4. Business digitization is only relevant for highly repetitive, mature operations processes
It is never too early to digitize your operations. With the right tools and methodologies in place, you can setup the blueprint of a fully-digital company from effectively day one.
Similar to the way in which products can be quickly prototyped following a design sprint, then transformed into working applications within days, using modern digitization solutions, processes can be drafted with pen and paper – or your favorite note-taking application – in minutes, and transformed into interactive, digital processes within hours.
By applying agile methodologies, you can also quickly update your operations processes as you learn. With that, you will be ready for scale-up at any time, and can establish a “digital DNA” optimization culture in your teams from day one.
5. Business digitization cannot be run by operations teams
Modern digitization solutions empower operations teams to digitize their business processes without any coding skills required. Through simple drag-and-drop interactions, supported by an intuitive interface and best practice digitization templates, you can digitize your operations all by yourself.
Instead of spending weeks or months on summarizing your requirements in large IT change requests, aligning on these change requests in numerous workshop meetings, and waiting for the change to be finally prioritized in the IT backlog, you can get these changes done within hours, independent of contributions from other teams or external consultants.
Modern business digitization solutions put the power for digitizing operations back into the hands of operations teams. And if you require approval from IT or digital teams to launch your newly developed solution to your operations problems, you can easily share it and get feedback on it, before releasing.
On the one hand, process owners are focused on digitizing operations for their teams (e.g. transforming a new supplier onboarding process from manual coordination, spreadsheets, and emails into an end-to-end digital experience). Digitizing your recurring processes to run your business, will allow you to work on the projects required to shape the future of your business.
Don't wait for the executive board to agree on a 2-year business digitization strategy led by consultants who will more than likely upgrade you to the next version of your existing legacy systems.
Instead, look at what problems can be solved today, visualize the ideal solution, capture it as easily as you can, and then start looking into modern digitization tools that can help you to implement digital processes without the baggage, timeline, and budget of the traditional enterprise digitization approach.
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