Despite its seemingly ubiquitous adoption, digital technology has only just begun to penetrate most industries. According to a recent McKinsey report, “Industries are less than 40 percent digitized, despite the relatively deep penetration of these technologies in media, retail,and high tech.
McKinsey predicts that as digitization becomes more widespread, “it will slow down revenue and profit growth for some companies … while the top 25% will gain significantly more. Strong, well-integrated digital strategies will be the key factor separating successful companies from those that fail, and the largest rewards will go to those who lead digital changes.”
While cost savings derived though greater efficiency is often cited as the primary benefit of digitization, global consulting firm KPMG notes, “The potential for business effectiveness improvements through digital disruption go far beyond the bottom line.” These improvements range from better visibility into operations and creation of a more robust and responsive customer relationship to an enhanced ability to obtain data to support a faster decision-making process.
While complete digital transformation may take some time, businesses can achieve immediate benefits from digitizing paper-based and other manual processes. Doing so will reduce the frequency of incidents relating to human error and increase visibility of information throughout the organization.
A good place to start the digitization journey is by mapping all current paper-based and manual processes. A manual process in this context means any process that needs to be manually read, entered, forwarded, or actioned. Paper leave forms and phone or email inventory ordering all exemplify manual processes.
Once mapped, here are a few simple steps toward digitizing paperwork and manual processes:
- Print with a purpose: Without totally banning printing, promote a policy where employees need a good reason to print a
- Opt out of paper: Invite customers and suppliers to receive digital documents, eliminating handling and delivery costs, and speeding up the supply
- Offer self-service: Emulating the success of self-service banking, create an online portal where customers can complete routine tasks at their convenience – without paper.
- Scan documents: Scan and store all received paperwork digitally in an intuitive online filing system to increase convenience, reduce physical storage requirements, and eliminate time spent searching for misplaced or lost
- Digitize devices: Replace old equipment with digital, Internet-connected
Paper-based and other manual tasks slow down business operations, both in real time and in its ability to respond rapidly to changing conditions. Digitizing documents greases the rails so businesses can receive information faster and make better-informed decisions to ensure they stay ahead of their competitors.
Clearly, the path to digital transformation will vary for each business. While systems to automate leave approvals, raise invoices, process payroll and month-end, re-order stock, and schedule routine maintenance are simple, cost-effective, and available right now, identifying the prime candidates for digitization is not always easy since each of these tasks requires a different mixture of technologies to automate.
Before considering suitable technologies, companies should define the 10 most important business processes within the organization and then review their eligibility for digitization. Processes best suited for automation are routine, repetitive, and rule-driven. Examples include assembly line work, back-office processes, and manual data analysis.
Once suitable processes have been identified, the organization should review the available technology mix best suited to these processes and the business, and weigh the cost and nonfinancial impacts against projected benefits.
Like any skilled craftsman, successful business leaders need the right tools for the job. As a business embarks on a digital transformation, it needs a consolidated and integrated set of systems to provide effective management and visibility of its operations.
To get the most from a digital transformation, business leaders should explore innovative technologies and take calculated risks. Reducing complexity and eliminating manual tasks will impact the whole organization, its culture, and people. Keeping staff happy with changes is essential to help ensure its success. Advancing technology provides ongoing opportunities for process improvement and innovation, so creating a culture that engages employees to improve business efficiency is an investment in the future success of the business – a self-perpetuating cycle of continuous improvement.