Converting information and documents from analog to digital formats.
Digital transformation is as much a cultural and business transformation as it is a technological one. It is a fundamental rethinking of customer experience, business models, and operations. It’s about finding new ways to deliver value, generate revenue, and improve efficiency.
Converting information and documents from analog to digital formats.
Integrating digital technologies into existing business processes.
A business-wide initiative to integrate intelligent technology into all areas of the business to achieve better outcomes and optimized performance and business processes.
The best cloud ERP solutions use in-memory database technology, making them highly scalable and adaptable. This is important because they are essentially the “brains” behind digital business transformation. ERP takes all the core processes needed to run a company (such as finance, HR, manufacturing, and supply chain) and integrates them into a single system. And when a modern ERP is powered by AI technologies, it has the power to not only manage and process Big Data, but to analyze and learn from it.
In order to deliver value, data needs to be harnessed and understood. Using AI and machine learning algorithms, advanced analytics provides insights and reports that are deep, accurate – and actionable. Businesses can also customize data analysis configurations on demand. This gives business leaders the power to act quickly and decisively – by seizing an opportunity or responding to risk.
IoT network data, video feeds, and social media content all contribute to the growing datasets that modern businesses have to manage. To manage these expanding data loads, companies need to know they can ramp up their memory and computing power, and are increasingly relying on cloud solutions to do so.
Big Data grew up alongside AI and machine learning. In order to process and make sense of Big Data, it’s necessary to have the power of AI and machine learning. For AI and machine learning to deliver accurate and meaningful results, both must have large enough datasets to support robust learning and analysis. The partnership of Big Data, AI, and analytics is at the core of business and digital transformation – driving predictive planning and responsive automation.
Devices and machines in an IoT network can send and receive digital data. Machine logs and maintenance reports are analyzed to optimize performance and efficiency. AI-powered business systems continuously analyze this information for patterns, trends, and correlations. These insights help drive predictive maintenance and automated workflows, increasing efficiency and productivity over time as the machine learning applications “learn” from the IoT data.
Both robotics and RPA use automated processes to accomplish repetitive or pre-programmed tasks. Robotic devices are comprised of moving, mechanical parts set to execute specific, physical tasks. RPA processes are similarly programmed and automated – however, they exist as software processes rather than physical devices, and the tasks they perform are administrative in nature.
Digitalization requires intelligent technologies to be integrated into existing business processes. First, analog documents and assets must be converted into digital data. Then look for ways to optimize your processes. For example, to integrate existing devices and machines into an IoT network, gateway devices and sensors need to be installed. Other devices such as virtual reality (VR) wearables can also be incorporated to augment human processes such as customer service and inventory management.
Part of this process is to ensure your business runs ERP and planning systems that are equal to the upcoming tasks. The best ERP solutions are powered by AI and machine learning, and run on fast and scalable in-memory databases, which makes the next step easier.
Technologies like AI, machine learning, and advanced analytics power sophisticated data analysis, real-time automation, and complex learning algorithms. But it’s not just about the technology. To best leverage the insights and capabilities, businesses must have the upskilling and reskilling strategies in place, to ensure their teams can make the most of these intelligent technologies, and bring the most value to their roles and workflows.
A recent Harvard Business Review survey finds that 63% of executives rank cultural challenges as the biggest impediment to their digital transformation efforts. The most successful transformations occur when businesses embrace the fact that change can be hard. People who have been used to doing things and understanding things a certain way (for maybe decades) will need support to not only appreciate the potential benefit of these changes but to adapt their workflows and habits to make the absolute most of them.
Whether their customers are governments or online shoppers, the best businesses are turning to digital transformation to help them build value, loyalty, and retention.
In a report from July 2020, Gartner points out that if businesses are to thrive and optimize their supply chains, “They must look to innovative technologies that have the potential to disrupt supply chain operating models and provide a competitive advantage.” Digital transformation in supply chains and manufacturing provides centralized visibility – from raw materials to end customers.
In the past decade, digital technologies have been driving change in the workplace. VR, chatbots, and mobile devices are customizing the onboarding process. Blockchain is securing the privacy and accuracy of information. Machine learning is helping to eliminate bias and ensure that businesses are champions for diversity and inclusion.
Digital technologies in healthcare have a complex workload. Research and diagnostic programs rely heavily on AI and machine learning. Surgical and medical devices require the speed and accuracy of powerful cloud and database technologies. Patient care and support looks to improve mobile and monitoring options so users can feel safe and confident with self-serve mobile technologies.
A 2020 JD Power report states that: “…it is safe to say we’ve reached the tipping point, where banks that get their digital formulas right are seeing strong gains in both adoption and satisfaction.” Digital transformation in the financial services sector delivers customized and hyper-personalized services, better mobile functionality, and free remote access to more complex services such as financial planning and credit management.
Digital transformation in retail can automate and optimize logistics networks – customizing and speeding up delivery. And as in every consumer sector, the growing demand for personalized services is also driving digital innovation. A recent Epsilon study saw 80% of shoppers more likely to choose a retailer that offers personalized services – including 24×7 chatbots, personalized product suggestions, predictive recommendations, and fluid omnichannel mobility.
The automotive industry was an early adopter of manufacturing robotics and digital automation. But as one of the world’s most competitive industries, many of its latest digital innovations relate to customer service and retention. Personalization and driver interface applications provide safety and enjoyment to the driver and give the business valuable data to help with more accurate product development, marketing, and customer experience provision.
In a challenging business climate, companies need to seize every competitive advantage – and increasingly, those advantages are digital.
Audit your existing systems and assets. Which machines are already digitalized? Which ones will require IoT gateways? Is your ERP modern and scalable, or is it still running on disk-based database memory? To give your project an early leg up, look first for processes within your business that are a high operational priority and have the least complicated path to transformation.
Don’t plan a marathon before you’ve even made it around the first block. The beauty of digital transformation is that it does not have to happen all at once. Like building blocks, smart technologies are designed to evolve, scale, and integrate. Ask your software provider about business transformation services and how they can help you get started.
A significant benefit to smart technologies lies in their immense scalability and capacity for rapid adaptation and reconfiguration. A great transformation roadmap should allow for agility and growth, but start with a roadmap that has a few strong and attainable goals. Build solid change management and migration strategies into your plan as well – digital transformation is as much a human journey as a technological one. These are important early steps. Look for support from specialized professionals who understand your unique needs and can help chart the best course for your business.
Thoreau said, “Things do not change; we change.” Smart technologies can help reduce repetitive and tedious tasks, improve employee engagement, and support collaboration. But these benefits can only be realized when all your people are on board. Don’t spring the news on your teams. Learn from their input and ideas, openly address their concerns, and give them time to change. Help your teams to change so they’re ready for new technology.
Across all sectors, companies are benefiting from successful digital transformation initiatives. Check out the transformation journeys of these companies and see how they have optimized their business models.
This fashion brand digitized their entire supply chain and financials to help them optimize operations across all areas of their business.
One of the world´s largest food order networks engaged with its global restaurant partners to reduce the payout cycle for customer orders from days to hours.
Explore a modern ERP system – SAP S/4HANA – and begin your journey today.
Common questions about digital transformation.
Digital transformation is a business transformation and a company-wide change management project. When digital transformation projects fail or stall, it is seldom a technical problem – it is almost always a cultural one. In reports and articles from McKinsey and others, we learn that poor planning, misaligned goals, and unclear strategies are the cause of the bulk of transformation setbacks.
In their fifth annual “State of Digital Transformation” report, the Altimiter research group finds that typically, the bulk of ownership is shared between the CIO and the CEO. But as digital transformation is no longer seen as an exclusively technological initiative, businesses are starting to rely more upon internal business process specialists to ensure that digital technology integrations have the best benefit for all.
Of course, this varies from business to business, but for most companies, a modern AI-powered ERP with an in-memory database is at the center of any digital enterprise. Within the ERP system are the brains that analyze, direct, and process all the data and information from across the business.
Start simple by choosing a few key metrics that are most important to your specific industry and organization (lead acquisition, manufacturing productivity, predictive planning). Figure out where you are today on those criteria, set realistic target goals, and measure again at fixed points in time.
Unlike software upgrades of the past, digital transformation is not an isolated IT project. Digital transformation affects all areas and functions in a business and requires technological and cultural adaptation and resilience. Before this kind of project, reach out to your software vendor to ensure you are getting the best (and best suited) business transformation services for your unique situation.