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Four tips for successful digital transformation
Nicola Downing, CFO, Ricoh Europe, has some advice for those looking to help customers carry out a successful digital transformation project
Digital transformation has troubled businesses large and small for many years. At its heart it is the reinvention of business operations to draw maximum benefit from digital technology. This usually isn’t a straightforward process and no two digital transformation projects will be exactly alike.
It is therefore crucial to avoid thinking too rigidly about transformation. For example, you could argue Tesla’s decision to release its electric vehicle patents for free was a progressive example of industry-wide digital transformation. This helped the company make its technology the industry standard, as well as benefit from an accelerated electric vehicle industry.
Ricoh research has identified almost universal agreement on the importance of digitisation. Around 95% of mid-sized businesses (50-500 employees) across the UK, France, Germany, Italy and Spain expect digitisation to provide business advantages. It is therefore a given that all businesses will need to adapt.
European employees are aware of the value of digitisation. We found that 61% would like their management teams to use technology to balance the impact of broader macro-economic changes on their business.
However, as with any major change or initiative, communication is one of the most important skills for executives to master.
Employees will feel the effects of digital transformation keenly, so it’s crucial to keep communication lines open and be honest with your staff about progress, outcomes and impacts.
It’s impossible to do absolutely everything at the same time, so, when prioritising, make sure people understand what you’re doing and why.
Know your business and listen to your employees
Despite the much discussed benefits of digitisation, many businesses still struggle to effectively transform core processes. Interestingly, 91% of mid-sized business leaders expect to face a harder path to digitisation than large enterprises and small business rivals.
At Ricoh Europe, we’ve faced these challenges and our business is stronger today for having overcome them. Throughout the process, we never lost sight of the kind of organisation we are at heart.
Assuming we could operate just like a startup would have been ill-advised, possibly even dangerous. There has to be a balance between the requirements of good corporate governance and the innovative blue-sky thinking that the startup mindset allows.
However, it’s important that the often rigid hierarchies of large organisations do not stifle innovation. Good ideas will frequently emerge from lower down an organisation – after all, these employees are at the coal-face, working with the specific processes you’re trying to change. Make sure employees throughout your organisation are regularly given a voice throughout any transformative process.
Efficiencies are a crucial target of digital transformation. In our case, we had 23 national operating companies duplicating administrative work and effort using different IT systems. As a result of the transformative process, the national operating companies can focus on the vital business of sales, while four shared service centres cover administration for the group.
By standardising these essential processes and IT infrastructure, including drastically simplifying their execution, Ricoh Europe was able to save tens of millions of euros across the region.
Bring every department into the process
Digital transformation, by its nature, will be as varied and complex as the business itself. Business processes can encompass a whole range of initiatives.
Successful transformation will inevitably have an effect on every element of a business. As such, each department has to be effectively engaged and included in the process.
The human resources (HR) function is one that is often overlooked in programmes of this kind, however it has a crucial role to play. Fundamental workplace changes often have the longest lasting effect on the staff who have to adapt to them.
Without the support of the HR department, you risk alienating and upsetting your most valuable assets. Strong change management is one of the key ingredients to success.
Lead the way
Perhaps most importantly of all, a high-level leader in the business should be identified to take on clear responsibility for any digital transformation project.
The leader’s role must be to balance the requirements of employees, departments and shareholders. Crucially, if they are to drive real change in the business, they must be supported by other members of the board.
This is not the sort of thing you can do on your own. Don’t be afraid to acknowledge where you have a skills gap, and potentially hire to fill it. Surrounding yourself with strong, innovative people is crucial for guaranteeing the success of your project.
Businesses and employees are agreed on the importance and benefits of digitisation. But for this to become a reality and drive tangible business benefits, organisations need a driven leader, capable of uniting the whole business behind them.
Digital transformation is one of the most important, exciting evolutions for any business to undergo. We owe it to everyone concerned to do it right.
