Embarking on a digitalisation journey
Why Digital Transformation Efforts Fail
Digital transformation encompasses how organisations employ technology to re-imagine and re-invent their processes and offerings, to achieve a competitive advantage across the business.
However, over the years, digital transformation has been used as a catch-all term that encompasses not only transformation but also the integration of digital technologies that automate manual processes and addresses operational inefficiencies within an organisation as well as the optimisation of the suite of digital systems that an organisation uses.
By carefully mapping out and clarifying the nature of the digital journey required, whether it is digital transformation, integration or optimisation, will help key stakeholders understand how and where resources are best placed, enabling their buy-in. Overlooking these distinctions may result in misplaced and squandered resources, and is often why digital journeys fail.
Digital transformation is the evolution of new business operations, outputs and outcomes. It employs technology to help a business anticipate new market requirements. In its finest form, digital transformation has the power to create new market leaders and disrupt industries.
While digital transformation is often the phrase thrown around, what businesses more frequently require is digital integration – that is, assessing an organisation’s existing workflows and determining whether greater efficiencies can be achieved through the use of technologies.
Digital integration encompasses the concepts of “digitalisation” (making analogue data digital) and “digitisation” (using technology to enhance and augment formerly analogue processes). In its more common uses, digital integration involves the use of analytics to better define customer profiles and segments, then using this data to improve customer experience through better digital user interface design, for instance.
Take for example a Singapore enterprise in a traditional industry – that is, marine bunkering in need of digital integration. Two years ago, Equatorial Marine Fuel (EMF) – a marine bunkering services provider that supplies fuel for ships as well as manages the logistics of loading fuel and distributing it among available storage tanks – approached us.
Despite Singapore being the world’s largest marine fuels hub and as a sector that comprises 7 per cent of the Republic’s GDP, most of the industry players’ processes were still managed with a pen and paper. It was the same for EMF which had kept its legacy process since the founding of the business.
When the next generation of the family – Choong Zhen Mao – joined the family business, he saw how operational efficiencies could be achieved by integrating technologies.
Said Mr Choong, EMF’s Executive Director: “With the advent of the recent digitalisation wave, and improvements in technological infrastructure, we relooked our processes and felt there was an opportunity to be more cost-effective, as well as to increase the transparency of our business.”
Digital optimisation means tackling an increasingly common problem: digital bloat.
Digital bloat occurs when different teams across the organisation use many digital tools, some with overlapping functionalities and many with incompatiblilities that – in turn – create costly silos, double-handling and frustration. A business that has too many fragmented digital systems leads to inefficiencies and process roadblocks.
The digital optimsation process involves taking stock of all digital tools that an organisation currently uses, identifying overlaps and conflicts as well as finding potential opportunities for the consolidation of data, systems and processes.
While digital journeys are strategic and long-term endeavours, it is important not to lose sight of measurements, progress and adjustments. Strategies for digital transformation, integration and optimisation should be implemented and improved upon in phases to ensure success.
Given the pervasive nature and results that may be incremental or realised in the long term, it is also important to obtain senior management buy-in and support for the long haul and to keep the lines of communication open with regard to progress.
That is why digital initiatives should have success metrics that are well defined and structured in a way that can be easily understood by the entire organisation – not just the IT team.
Against the backdrop of Covid-19 global pandemic and potentially lower level of business activities, the time is now for businesses to rethink about what digital initiatives they might need to implement presently to stay relevant and competitive for the next decade.