New technologies might provide the answer, but have you identified the problem?

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With countless organisations considering embarking on digital transformation projects, you might think that businesses large and small have justified their reasons for investing in new technologies. But research by management consultancy McKinsey finds that just 14% of organisations say that their digital transformation projects have led to lasting technology improvements. Not only that, just 3% claim that they've sustained business change as a result of these improvements.

It's no surprise that digital transformation isn't delivering as planned for so many organisations. Sometimes we see technology investments made without careful consideration of how they will contribute to operational challenges. Before any expensive IT buying decision, CIOs should assess how the technology will help solve common business issues, whether that's scaling for rapid growth, or eradicating inefficient, ineffective and costly processes.

Deploying new technology

Business owners shouldn't invest in new technologies before reviewing operational processes, considering where they could be applied and the value they will deliver. The success of any new solution lies in where and how it is deployed. If tech investment is accompanied by an optimisation of current processes, the business can boost inefficient operations. For that to happen, CIOs must gain a clear view and understanding of how the organisation operates, determine whether processes are working effectively, and if not, consider how they can re-engineer them for better performance.

Once areas that need improvement have been identified, they can then decide on how technology should be applied to resolve the issue. With new solutions and systems in place businesses can gain better visibility of operations, allowing them to make informed decisions and boost responsiveness to customers and drive profitability. However, to achieve this level of understanding of where improvement is needed businesses should consider consulting with an external technology partner who can objectively review operations and advise on where technologies should be applied.  

Take one UK firm we worked with which reviewed its core business processes. With several reporting and accounting systems in place, the business decided to replace them with a single system. This enabled the firm to rapidly set up an overseas sales operation that achieves easier compliance with local sales taxes and import controls, while delivering better customer service and improved overall management information. Thanks to this consultative advice, the firm was able to capture an overall, real-time view of operations.

No digital transformation without visibility

Without a clear view of core processes and operational needs, businesses won't realise the full potential of their IT investment. New solutions won't help businesses achieve crucial goals any more than their current technology set up if they simply replicate current inefficient processes and operations. Digital transformation should only exist along with expert support that reviews and challenges current IT system and advises how to leverage new technologies to drive real value and business insights. Only then will new technologies deliver on the innovation promised by suppliers.

Next, find out why businesses need a Chief Automation Officer.