Digital transformation is not a short-term gimmick, and this has to be necessarily factored-in by organizations that have either started or are going to start their journey. It is a set of processes that enhances business prospects and ensures the sustainability of business.
Though technological disruption is not something new, it has been rather varied in terms of speed of adoption. While many are actually finding new ways of doing businesses using disruptive technologies, there are still many who are catching up with the new forms of business engagement.
However, what has considerably changed is the way in which new ways of doing business are gaining momentum in a matter of years or months as against decades before. Indeed, the new and dynamic terrains require readiness and planning.
Here is a recommended way forward.
Build from scratch
Keeping these factors in mind, it is important to understand that there are no set ways to achieve digital transformation. What can be done by businesses is that they can consider their customer base, their key differentiations and value-addition prospects as well as weaknesses and opportunities that can help them plan their interactions, no matter how big or small and can also enable them to engage the customers on a daily basis in order to have an edge.
Knowing the inside-out of the business and being able to communicate about it with the customer base can help businesses despite its growth and size.
Don’t take for granted
The business environments are typically known to be dynamic such that they are constantly evolving or witnessing a slump currently due to the impact of Covid - 19. In such environments, if the business is not careful to external impediments, it can lose out or can be demolished by competitors. Digital transformation can happen if businesses are aware of the changes happening around them.
A SWOT or Strengths, Weaknesses, Opportunities and Threats analysis can help businesses to understand where they stand in terms of their limitations and opportunities. At a transactional level, process automation can be implemented which can be followed by a strategy design, planning and funding. Delegation may not help at this stage. Instead, businesses can use a dedicated or specialised team to oversee the strategy and can use agile methodologies to sustain.
The idea of digital transformation is to hold back on activities or processes that can be achieved through alternative means. This means that activities that are not central to the business can either be internally digitised or outsourced completely. Businesses should pay attention to the fact that when services are outsourced, instead of looking for companies with the cheapest interaction costs, it is advisable to look for companies with the business process that can help reduce the total cost of ownership. Reusing cost savings with a dedicated investment from the board of the business firm can help.
Though SWOT helps track the business’ gaps and opportunities, external competition is something that needs to be adequately tackled from time to time so as to remain in the business. This should keep happening simultaneously as and when the business is transforming its services and offering. For instance, the combined force of new IT solutions and actual IT assets such as big data or Internet of Things (IoT) can help in cloud services and legacy modernisation. The investment budget will witness a rise by the savings pulled together.
Friendly end-user experience and application of process automation have shown a lot of promise. Even before the demand arises, smart businesses should create the need for such services. After all, digital transformation is all about knowing the customer and the business well in keeping with the constantly evolving landscape.
Procurement’s turnaround through digital transformation
Owing to the disruptive technological changes, there are transformations happening in all spheres of our lives. Technology is enabling everything to be seen as a service (XaaS). These services are undergoing value-addition through technology that is customised, flexible and on-demand. Here are a few instances:
· Cloud computing has enabled infrastructure as a service (IaaS), software as a service (SaaS) etc.
· App or business services include procurement function services via service level agreements that use interfaces to define outputs and inputs.
· Shift from a manufacturing to services economy involves Internet of Things (IoT) that measures the potential of physical objects through sensors to manage outcomes.
· The traditional models of Business Process Outsourcing (BPOs), consulting and physical supply chains are being reshaped by Managed Services Providers (MSP).
· Shared services models are constantly evolving such as Global Business Services.
· There has been a change to on-demand labour services from service firms and contractors as against employee-based resources.
· Prosumers or producers and consumers together can use platforms to aggregate, match and transact services.
Management of assets that create the services along with managing the services is the key to succeed in a Xaas economy. The returns need to be optimised through optimisation of assets in a business’ portfolio. Though assets are outsourced, assembled and on-demand, there is a requirement of internal capability to manage these external assets.
Considering that externalisation and digitisation are two important factors driving a solid transformation in the industry, chief procurement officers are set to gain immensely if they take advantage of the opportunity.
This could be an effective model that can solve a whole lot of issues for business executives and can help simplify the process of digital transformation in supply chain management across companies and organisations.
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