“It’s important to define what digital transformation means for companies as it can depend greatly on what they are looking to achieve,” says Ralf Hustadt, Digital Acceleration Lead at Telindus. “Digital transformation is a big buzzword at the moment, especially in light of the coronavirus pandemic, where people are increasingly working from home.” During the crisis, it has become more crucial than ever for companies to streamline their digital systems in order to enable their staff to shift from the office to home environments. According to Ralf Hustadt, digital transformation can help find new ways of improving internal processes, such as turning from analogue operations into a paperless office, cut costs and increase revenues.
Posing challenges
Companies, however, are facing a number of challenges in the digital transformation process. “The biggest challenge is changing mindsets,” explains Ralf. “In other words, the most important thing in digital transformation is not what you need to learn in terms of new things, but what you have to unlearn in terms of doing things the old way. I’d always allocate a certain percentage of digital transformation budgets to staff training, it’s just as key as the improvement of systems. You can give people the most sophisticated tools, but if they don’t like them because they don’t know how to use them, they simply won’t use them.”
You can’t just throw new tools at people, you need to live it top down and make sure employees understand there is a cultural change.
Ralf recommends starting with small pain points, where staff can notice quick wins and then build slowly from there. For example, for a company that handles a lot of invoices, a good way to get people to see the benefits of a new digital tool is by showing them the efficiency of a system that simplifies invoicing processes. “Don’t start with big changes,” says Hustadt. “You can’t just throw new tools at people, you need to live it top down and make sure employees understand there is a cultural change. It’s all about senior management fostering a company culture where this type of behaviour is well accepted.”
Cybersecurity: a must
Security breaches also pose a challenge in the digital transformation journey of companies, especially when switching to cloud-based systems. In this case, customer contracts and other data are no longer pieces of paper sitting in a folder on a desk; they involve the internet and thus open the gate to cybersecurity risks. “If you’re too busy with daily business you might forget about security, but cyber risks have real consequences on business,” explains Ralf. “Especially now, where companies are shifting from the traditional nine-to-five model to allowing staff to work from home, they have less control over what’s happening. They have to make the leash longer, meaning that maximising security is definitely something they need to consider.”
Key KPIs
In order to achieve better returns on investment and guarantee the sustainability of their projects, companies should from day one define and measure a number of KPIs. “The top KPI for all companies is how to increase revenue and decrease cost. All other KPIs ultimately come back to this money-making KPI so they are fairly easy to measure,” says Ralf.
If you’re too busy with daily business you might forget about security, but cyber risks have real consequences on business.
For example, if a company is digitising reimbursement processes, they can measure the success of this change by determining how much time it frees for their employees to focus on other tasks. Ultimately, this helps to optimise the company’s performance in more ways than one and allow the business to grow. “Many companies believe they need to think big, but two years down the road they might find themselves in a situation where their ambition is too big to be achieved,” explains Ralf. “As far as innovation is concerned, it’s all about starting small and taking things from there.”