The 2020s will forever be what I call a watershed decade, as it has forever changed the way businesses function around the world.
Consumer habits today are largely driven by digital innovations and technologies. The digitally connected world makes information gathering easy & social media has become so intrinsic to the next generation as the de-facto primary source of information.
How companies learn to adapt themselves to the changed circumstances and re-invent themselves into an enterprise 4.0 organization will determine who survives and grows in this decade.
Companies must transform digitally across the board to be an enterprise 4.0 organizations. Regardless of the services business, selling physical goods offline or online to direct consumers or serving B2B clients, unless you digitally transform to meet the expectations of your customers and employees, the chances of being stagnant and failing will increase proportionately with every passing year.
Key Elements of Digital Transformation
CEOs or organizations transiting themselves should be aware that digital transformation is not just restricted to the tech department but to be truly an enterprise 4.0, the transformation should be all-pervasive.
The 4 key areas every CEO should focus on for digital transformation:
1. Transformation of businesses processes and system
2. Transformation of the business model
3. Domain transformation
4. Culture transformation
Transforming Business Processes
Moving from being a company to an enterprise 4.0 organization will call for CEOs to completely overhaul the way various departments function including the processes within each. Employees need to be digitally connected given the hybrid nature of work these days likewise mobile apps, cloud-based applications, and seamless data flow between departments are critical.
Transformational technologies like Artificial Intelligence coupled with Deep Learning can significantly transform business processes. Workflows can be optimized to deliver higher throughput. Manufacturing companies can leverage machine learning and AI to fully automate production processes, while AI can be used by services companies to generate insightful data points leading to informed decision-making.
The use of Blockchain as a technology can be transformational in changing how businesses address customer transactions and agreements. The Internet of Things (IoT) can bring out a change in the way logistics and supply chain processes are implemented.
Take, for example, the sales function. Leveraging cloud-based CRM tools and Power BI will aid sales teams to make better-informed decisions during sales calls. Sales reps need to be trained in social selling. At the same time, the vast amounts of data collected through every sales visit will enable marketing departments to develop personalized conversations with potential prospects while being able to cross-mine existing customers for a higher share of wallets. Implementing AI within the organization’s systems will help managers manage processes better.
Likewise, digital technology could be applied to supply chain teams integrating vendors, logistics partners, procurement, production teams, and finance teams into a holistic seamless unit where data flows happen instantly. AI could be used to gather intelligence at every point of the supply chain to drive down costs whether it be in lowering transportation costs, leveraging better route planning, vendor planning, or even procurement costs.
Business Model Transformation
Digital technology has completely democratized business models. Customers are now able to choose their preferred mode of consumption or purchase of any product or service. Geography too is no longer a barrier to purchase.
CEOs of Enterprise 4.0 understand this and tailor their products and services for the new generation of buyers. SaaS, PaaS, IaaS & BPaas are no longer just terms, rather have become realities in the new world order. Companies need to evolve their business models to cater to changed customer buying habits.
For example, Rental has become a growth business model. You can rent everything from an IT product to furniture to cars to entertainment on a monthly subscription model. Services have been productized to meet the changes. Products can be rented instead of bought. D2C models are growing across every industry.
The Productization of services has been gaining ground in recent years. Service organizations need to look at their service lines and determine what aspects of their traditional service areas can be productized. Productization of services leads to the ability to cater to a larger market with products tailored to different customer needs. Productization also allows organizations to leverage e-commerce models instead of traditional direct field sales models so as to cater to a global market.
The cloud has changed the need for hard drives. Software systems no longer need to be physically residing in one place. The cloud offers vast amounts of data storage and allows for AI-based applications to run seamlessly through all the data streams and provide a singular dashboard for better and faster decision-making.
Enterprise 4.0 need to invest in the cloud, ensuring being free of costly IT resources but allowing employees to work seamlessly no matter where they are.
The growth of public cloud and hybrid cloud services allows organizations to move all their workflows and applications seamlessly to the cloud. Creating a flexible cloud solution for running all workflows, gives organizations the flexibility of not being locked with a single platform or a vendor and at the same time provides scalability of operations
Manufacturing companies can integrate IoT, Machine learning, and AI within their production process and monitor manufacturing seamlessly without being physically present on the shop floor. Likewise for all other business processes.
Having a set of employees culturally aligned with the organization’s value system is extremely critical for long-term growth and survival. Embracing a digital transformation will lead to resistance within the organization, especially among those who have not yet seen the benefits or who are technology deficient.
Organizations are likely to witness employees lacking in, relevant implementation of desired digital tools & assets. CEOs need to be an active role model for the absolute digital transition and impress through frequent town hall meetings, webinars, and HR initiatives & activities, all need to align to transform into a digitally connected enterprise.
Digital transformation into an enterprise 4.0 organization is not just about digitalization, but a complete transformation of the organization as a whole. It is a cultural shift in thinking, innovation, and re-imagining the business in totality. Think of it as a pivot that startup CEOs do to re-invent their companies.
Digital transformation in the end is all about building a technology bridge that connects data intelligence, employees, and customers into a holistic whole.