As a representative of a software manufacturer installing solutions to improve workflows, I get around a lot in different companies. What I see on a daily basis is that the demand for digitization and process automation is at an all-time high; what is less obvious, however, and yet equally prevalent, is an uncertainty as to what is actually needed.
AI, IoT, CX, digital transformation, Industry 4.0 (or is it 5.0 by now?), digitalization, digital disruption — buzzwords like these are meant to increase influence on corporate leaders and force them to act. What seems to be happening instead, though, is that these terms are causing even more confusion. Managers are beginning to develop worry lines over the question of whether they will manage to change course in time or sleep through the introduction of new business models, possibly missing the connection altogether.
A few months ago, I was with the CEO of a mid-sized manufacturer of baked goods. While contemplating future prospects and the challenges of his industry, he told me about a visit to a regional Chamber of Commerce event with the title "Digitalization — What it Actually Means". Dialoging with like-minded people at the event, he realized it was high time to take action and modernize his IT landscape and processes. The management team was promptly called together and each department had to appoint a digitization officer. Of course, as digitalization was seen as a project, a project manager was brought on board. Ideas were collected and a decision was made: "We're going to get a workflow system!"
Digitization: It won't work without an open corporate culture
The right technology is merely the foundation. Of far greater importance is, however, the way it is utilized. For many employees, knowledge is still power. If employees are not interested in engaging in exchange or transformation in the networked digital world, they will be left behind. In order for digitization to become a reality, companies must create a culture of openness and provide scope for creativity. In a study* by the strategy consultancy Cap Gemini, 75% of the top managers surveyed believe that they have a culture of innovation in their company; in contrast, however, only 37% of the employees surveyed agree with this statement.
When it comes to ensuring global involvement in digitization, the role of managers is crucial. Flat hierarchies, open doors and appreciative conversations between equals must replace lonely top-down decisions. The manager is increasingly becoming coach and mentor in a modern and digital work culture.
Only through collegial exchange is it possible to create new ideas that can contribute to optimizing processes, to improving communication with customers, and ultimately to achieving satisfactory company results.
Focus on digitalization of processes
The example of the producer of baked goods illustrates how digitalization is often given too little thought. Digitization is not simply a project to be implemented top-down. Digitalization must be sustained by the company culture.
Even if a supportive culture does exist, a company will still need to do more than merely purchase a software solution that covers every need. In fact, rather than delivering the anticipated benefits, solutions that are highly complex are more likely not to be utilized as planned. Therefore, when implementing a solution, it is important to take a step back and first focus on the actual processes as they exist at the company, and then on how they can be improved. Analyzing existing processes and creating a model of core processes might help orient those involved in the tasks surrounding digitalization. Methods such as Six Sigma, for instance, help with this.
But what do we start with now?
When you start to examine your existing work processes, it will soon become clear which processes may have been "over-complicated" over the years, and which tasks can easily be automated with the new options you have. More likely than not, the best candidates for automation will be those tasks in business administration which are lacking in variance, repetitive in nature, and experienced as monotonous by employees. Whether it is a matter of releasing simple purchasing tasks, answering inquiries which are the same each time around, or posting incoming invoices every day, if the software solutions involved are truly suited to the tasks at hand, then they can all be automated. And when these kinds of repetitive tasks are taken off the to-do list, resources become free for addressing important company challenges.
These points might seem to merely be the basics of digitization. They don’t seem to have much to do with innovation or disruption. However, that is precisely the groundwork that has to be done to achieve digital transformation — cleaning up core processes to bring them to a higher, more efficient level. To install quality digitalization and enable progress throughout a company, foundations are required. In addition to the proper software, these foundations are to be found in the form of an open culture, a flat hierarchy, and processes that are well-organized, trimmed down and healthy.
*Further information on the study you can find at https://t3n.de/news/digitale-transformation-unternehmenskultur-829290/