Beginning Your Digital Transformation
Like so many tech buzzwords, ‘Digital Transformation’ is a nebulous term that has been used to cover everything from automating logistics companies to digitally-enabled social change. Despite having been high on the corporate agenda in some form or another for well over a decade, Digital Transformation (AKA DT or DX) still remains a hot-topic, with IDC predicting that US$2.3 trillion a year will be invested on digital transformation within the next four years, with worldwide DX technology investment set to hit at least $7.4 trillion over the next four years.[*]
However, Digital Transformation is not something most companies embark on for its own sake - it’s a long and difficult process to truly transform a company, so typically the need to change is prompted by one or more of the following factors:
- Outside-In - customer demand for digital engagement via apps, websites, portals etc. forces a business to build digital products at the edge of the enterprise. Naturally, this forces a transformation of internal systems and processes to support the digital customer experience
- Inside-Out - operations / supply chain efficiency drives internal technological adoption and process automation, which provides a model for wider adoption throughout the business and a need for digital products to utilise the data and benefits generated by Ops
- Tech Evolution - siloed digital projects are started by corporate entrepreneurs within different business areas, working separately until a critical mass is achieved that requires a cohesive and holistic approach to enable these silos to function together
- Tech Revolution - external competitive pressures or a visionary leader forcing through wholesale change, leading to a full-systems replacement approach
With over a decade of supporting Digital Transformation in SME and mid-market companies in the UK, Haulmont has seen examples of all of these models for generating a need for DX and each approach has its own strengths and weaknesses. However, the most common example we have seen that leads to technology being genuinely transformative for a business is actually a subset of the ‘Tech Revolution’; namely a desire to scale and differentiate.
As a custom enterprise software developer specialising in automating business processes and solving complex scheduling and allocation challenges, we are often approached by companies fitting the following profile:
- Turnover of £5-20million
- Strong management team often led by a dynamic founder / CEO
- Success up to a point but now constricted by one of two factors;
- Inability to scale operations efficiently
- Tied to a legacy platform also used by competitors in the sector
These businesses take a revolutionary approach, but not necessarily a risky one. With parallel running and data synchronisation they can avoid the all-too-real dangers of a big bang approach and bring new systems on in phases - with full roll-back - and, in effect, implement a full systems replacement as a kind of accelerated Inside-Out transformation; transforming their ops systems first then cascading the benefits out to the customer as they deploy new functionality built on the capabilities of their newly-automated and data-rich operations systems.