Article: Building business resilience through digital transformation

Technology

Building business resilience through digital transformation

To successfully implement a digital strategy and make the most of their business, organizations need to consider how and when to invest in technology, what to prioritize, and how to improve their overall digital fitness.
Building business resilience through digital transformation

Digital transformation has been a buzzword for some time, and with the pandemic forcing companies to accelerate their digitalization, digital has gone almost overnight from a useful tool to an inseparable part of business strategy. Already, the last nine months have shown that the businesses with the best chances of surviving and thriving are the ones that either already had a large part of their operating model digitalized, or were able to rapidly do so.

The question is then how to take the next step, whether a company is already on the curve, ahead of it, or even still struggling to catch up.

"How do we embrace change without breaking the company?" asked Koh Ching Hong, the Chief Executive Officer of Fuji Xerox Singapore. Speaking at his company's Innovation Re:Mix forum last week, he pointed out that everything about business needs to change, from employee engagement and customer engagement and stakeholder engagement, to how people work and even what they work on.

Invest now for the present and the future

Companies that are doing well despite the pandemic have gone through several important steps, according to Simon Piff, head of IDC Asia Pacific's practice group. In a keynote at the Fuji Xerox forum, he described a five-stage recovery model that begins with business continuity—the immediate actions needed to ensure that the business can operate under crisis conditions—and moves on to cost optimization, the restructurings, consolidations, and layoffs that have been ongoing for the last nine months.

The stage that most businesses are now in, or should aspire to enter, is business resilience: investing in the key technologies that can mitigate the impact of the economic downturn. From there, they can move on to more targeted investments that will prepare them for the final recovery stage of the "next normal".

So what are the investments for business resilience? "Critical infrastructure is paramount," Piff suggested. "The ability for your systems to support customers and partners, to be able to deliver the digital services that are required."

What needs to be prioritized?

Speakers at the forum suggested focusing on strategic areas such as enhancing customer experience, reducing costs, improving compliance for highly regulated industries such as finance, or even simple improvements such as making a process faster or more transparent. The starting point could be processes that are clearly problematic: those that are tedious and time-consuming, that use a high volume of paper or require an inordinate amount of travel for very small outcomes, that are manual and repetitive, or that are prone to human error.

Many of the solutions to these problems have been around for a long time and are relatively minor investments, financially speaking: scanning with optical character recognition, automated document management, intelligent automation such as cognitive capture and robotic process automation. Even the training required to use these technologies is not particularly time-consuming compared to the potential gains in productivity.

"Every company has to have a digital strategy, but first they have to understand the problem, internal and external," observed Toby Koh, group managing director of Ademco Security Group.

Improving digital fitness

The obstacles to digital transformation tend to be common across businesses. Often, existing setups form the largest issue, according to Alp Altun, Chief Transformation Officer of Allianz SE Insurance Management Asia Pacific. Describing legacy systems as "one of the biggest battlegrounds", he said that it is not just a technology problem but a business model problem: different functions are disconnected from each other and do not communicate or disseminate information, individual teams adopt their own methods and processes that are not necessarily compatible with each others' operations.

"My advice would be to not look at it in a siloed way," he said of dealing with this challenge—there is, he added, a need for diverse viewpoints and willingness to learn. "The key to thriving in future would be openness to understanding what got you to thrive today."

Improving communication and collaboration is in fact a critical part of digital strategy, according to Piff. Resilience, he said, is driven by innovation, and innovation is in turn enabled by communication and collaboration. "We need to constantly re-educate our teams and ourselves," he observed.

Ultimately, digital transformation and business resilience is about being able to consider all possibilities and outcomes, including those far ahead in the future. Connor Clark-Lindh, head of smallholder people ops at Yara Digital Farming, pointed out that a digital strategy is not just about pure cost optimization, but about recognizing and meeting the need for more different people and different skills, and about gaining the ability to service customers and markets that the organization would not have been able to service by traditional means. As he put it, "How do I use digital to unlock more—how do I do more with more?"

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Topics: Technology, #Digital Transformation

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