Understanding digital transformation
Successful digital transformation relies on a smart digital strategy to make wise investment choices to maximise competitive advantage, growth, profit, and value, and then implementing effectively.
Assess the strategic impact
Good digital strategy, or Strategic Digitisation Programs (SDP), starts with understanding the competitive environment and how it’s likely to change. Because new technology reshapes business, it’s essential to think beyond your own organisation and consider your customers, suppliers and partners. Going beyond comfort zones requires taking an end-to-end view of your business and operating models, but it is vital to do so. McKinsey identifies that organisations that make minor changes to the edges of their business model nearly always fall short of their goals.
The impact and opportunities of digital transformation vary. Business processes can be reinvented, such as invoice automation and removing manual processes, and some can be completely transformed, such as supply chain resilience. But while outcomes will vary significantly by industry, a few common themes have recently emerged:
Supply-chain transparency and flexibility
Organisations with full supply-chain transparency, and the ability to detect purchase-pattern changes, have done a better job navigating the fluctuations in supply of recent items. Managing your supply chain, and the risks involved, is absolutely critical to your organisation’s financial health and competitive performance. As we are seeing, the negative impact of global events on an organisation’s financial position or reputation is potentially huge, even devastating.
But effective management of your supply chain is the only route to resilience, as it:
- improves the financial position of your organisation by delivering value across the chain;
- plays a significant role in customer satisfaction through the delivery of products and services;
- reduces operating costs from Procurement activities, through operations and logistics functions and throughout the whole supply chain.