You don't know what you don't know
Nowhere are these sage words more true than when referring to digital transformation within a business, says Gerrie Terblanche, CEO of Deltalink Consulting.
It all comes down to digitisation and digitalisation, says Gerrie Terblanche, CEO of Deltalink Consulting. He elaborates: "Digitisation is an important starting point, but digitalisation is the journey. It's important to know the difference."
Terblanche believes there's a need to create awareness about the distinction between the two terms, as many businesses use them interchangeably. He says: "There's also a need to understand the role of each of these activities and how they are related."
Digitisation in the business world, according to Terblanche, mostly involves the conversion of paper documents to digital form, but also refers to the creation of information in digital form. Digitalisation is the use of digital technologies to support a business process. "When you consider that many businesses have hardly started with digitisation, and are still heavily paper-based operations, the real benefits of digitalisation may be a long way off."
He goes on to say that while the ultimate goal may be to digitally transform the business, the first step is for a paper-heavy business is to become less paper-intensive. "While it may seem counter-intuitive, some businesses embark on digitalisation ahead of digitisation simply because the cost of digitising paper-based systems may (initially) be prohibitive. These businesses regard the digitalisation of non-paper-based processes as a sensible starting point for digital transformation. However, paper will eventually become a drag on the transformation process and will need to be addressed sooner rather than later."
The challenge that many small- to medium-sized businesses face is that they may not know where to start their digitisation/digitalisation journey and what the potential impact on their business could be, says Terblanche.
You need to determine the current state of the digital landscape of your business before going on this transformation journey. He says: "If the necessary skills and experience do not exist in your own business to do this, then it is best to employ the services of a suitably qualified outsider to establish this objectively.
"A good starting point is to get an in-depth common understanding of all core business processes and to document it. This is an important activity because if digital technologies are used to support these processes, then the modelling must be accurate to make provision for all possible activities, metrics, permissions, responsibilities, escalations and decision points. While this is a seemingly simple process, it often proves to be a challenging one as it is often found that each person in a division or department will have his or her own understanding of the exact nature of each process."
Start with a department or division where digitisation or digitalisation will resolve the biggest challenge or have the biggest positive impact to improve efficiencies, reduce shrinkage, reduce risk, improve service responsiveness, improve customer experience or any other activity that will bring about a meaningful and tangible improvement.
Digitalisation allows you to build service levels into processes and to manage the service levels because you can measure performance against standards or targets, such as the time it takes to perform each specific task and the process as a whole. It removes the fuzziness from your business processes.
There is much to be said for creating information digitally from the outset, instead of on paper, which means no digitisation is required and digitalisation can proceed unhindered.
However, some sectors are just too invested in paper-based systems to simply change over to digital. The pervasiveness of paper waybills and proofs of delivery is a case in point. While these functions can be done electronically, the required investment is often a deterrent.
In addition to the clumsiness and inefficiency of paper-based processes of any kind and the lack of visibility of the underlying processes due to the siloed nature thereof, according to Terblanche, they are also susceptible to fraud, which may be costly and take lengthy times to uncover. Yet companies tend to stick with paper because they're unsure about the cost implications of moving to electronic processes and the perceived disruption to operations the changeover may cause.
Digitalisation will require new systems and/or upgrading of existing systems. In some cases a renovation approach instead of a transformation approach may yield adequate results and may cost less. Whichever approach you follow, digitalisation should be viewed as an investment that could yield meaningful returns and should not be viewed as a cost.
He adds: "There's also often resistance to change, because some people simply don't believe that digital processes will necessarily bring about any improvement. Therefore, user adoption from the top down is key to the success of any digitalisation project."
Terblanche has the following advice for companies looking to embark on their digitalisation journey:
1. Do your homework, commit to the process, start small and get everybody in the business on-board.
2. See this as a long-term project, a journey, not a race.
3. Choose the right solutions that can be tailored to your unique business requirements; changing systems is expensive.
4. Choose your partner(s) carefully as this is a long journey.
Whereas digitisation delivers many benefits, it is digitalisation that will transform your business.