Although digital transformation has been around for a while and for good reason, it is certainly moving higher up the agenda for businesses across all sectors. 21% of global retail CEOs we spoke to as part of our report on the subject say it is one of their top strategic priorities over the next three year. Among financial institutions it is even more of an urgency with EY‘s Global Banking Outlook 2018 finding that 85% banks cited implementation of a digital transformation program as a business priority last year. There are good reasons for this, as while it is difficult, with McKinsey finding that less than 30% succeed, if done correctly it’s well worth the journey.
Digital transformation isn’t just about implementing new technology and then letting it do the rest of the work. Businesses, in fact, need a detailed roadmap which explores how these new digital tools will be leveraged to continuously achieve greater business agility.
Once complete, businesses will be better able to overcome new complexities brought about by the digital age and unlock new potential. Among the wide-ranging benefits, a successful journey can lead to reduced costs, consolidated operations, streamlined workflows, greater analytical abilities and create a more customer-centric focus.
So, with a great many benefits, how do organisations prepare?
Digital transformation certainly won’t happen overnight. In fact, it should be viewed as an ongoing process that involves assessing every area of the business and redesigning processes that deliver value. From our experience in this area, we have found that before undertaking anything, there are four key considerations organisations must address:
It is vital that organisations have the right people in the right positions. These people should have the relevant experience and know how things should be done in order for the transformation to be a success. According to Gartner, an organisation’s talent is a major part of the journey and it is therefore important to foster innovation among employees. Gartner also found that one of the most effective ways to achieve greater innovation is through a network-based approach which draws on the expertise of employees and leaders to innovate at scale.
The next stage of the preparations should be to look at and simplify processes. Starting a digital transformation journey with ineffective processes in place will ultimately be pointless, causing additional pain points and a lot more work down the line.
With so much data at our disposal, it’s important to regularly update it and clear it up. Because access to large pools of unorganised data could mean there’s very little that can be done with it. Instead, by regularly cleaning up your data, it is possible to embed it into all processes and routines.
Once the previous three points have been addressed, organisations can begin to implement new technology. The investment in and implementation of technology is arguably the most exciting part of the journey but needs careful consideration to ensure the right technology is chosen and that it will be possible to integrate it with other solutions.
According to EY, 51% of banks globally say one of the main reasons for their organisation to invest in technology in the coming three years is to drive digital transformation programmes, this is in addition to being able to better serve customers and drive efficiency.
When looking at financial processes, businesses stand to see substantial advantages. For example, moving from a manual expense process to an online automated process should bring significant financial and efficiency benefits, including a reduction in back-office costs, increased visibility and transparency of spend. An Expense Management Solution (EMS) can also improve compliance and reduce overall operational costs with our research showing that Fraedom Expense reduces manual process costs per expense by up to 75% for retail businesses.
Additionally, by implementing solutions such as our EMS, businesses benefit from a flexible modular solution which allows them to add new features at their own pace. This means that even once organisations have chosen which technology to implement, they can slowly transition to using it for a growing number of functions. EMS solutions also provide businesses with growth potential, allowing them to use commercial cards to make simple and painless payments and providing support.
Employees also stand to benefit just as much as employers through the streamlining of processes. This is particularly true of implementing an EMS as it is often employees who feel the brunt of a lengthy manual expense process in which it takes on average 17 days for employees to be reimbursed. By using an expense management platform, employees can pay for expenses on their own credit card, upload the receipts to the platform and code them, which sees it get sent directly to their manager for approval. The manager is then able to approve the expense from an app on a mobile before it is sent on to the finance department who can add the payment to the next payment run. Using an EMS streamlines the process, making it much faster and less resource-heavy, which is beneficial to all involved, and ensures employees aren’t out of pocket for long periods of time.
Other benefits include removing bottlenecks and thereby increasing the speed and agility of generating insights. It also offers the opportunity to improve customer satisfaction and in the long-term boost revenue. In fact, Gartner found that 56% of CEOs that had started the journey said digital improvements had already increased profits.
Ultimately, through thorough preparation and forward planning, there is a lot to be gained, not just in the immediate aftermath but over the following years as the new tools and processes help organisations achieve greater agility.
At Fraedom, we have helped a number of organisations to successfully achieve digital transformation. Most recently, we worked with Australian marketing firm Sensis to ensure their journey went smoothly and that the right technology was implemented at the end of the process. You can find out more about Sensis’ journey as Steve Sibly, Shared Services Manager at Sensis, walks us through the processes involved.