Council Post: Three Common Mistakes Businesses Make On The Way To Digitalization

CEO at Bievetski Consulting, bringing digitization to European SME’s and improving business processes. Lives in Dubai and enjoys good food.

Digitalization has traveled the path from being just a nice-to-have to a total must. The pandemic has become even a more potent trigger to the trend, forcing companies to integrate new technologies on the run, while normally this process takes years.

According to a survey of 1,350 executives by Accenture, despite companies investing a total of more than $100 billion between 2016 and 2018 on digital transformation, most leaders saw poor returns on their investments.

As the CEO of a consulting company that specializes in digitization, there are three common mistakes I’ve seen brands often make when pursuing digital transformation:

1. Misinterpreting Digitalization

Digitalization is the talk of the town now, but many businesses hurry to hop onto the rushing wagon of thriving technologies without even understanding what “digitalization” truly means.

Put simply, “digitalization” or “digital transformation” is the reformation of business via information technologies, such as the cloud, big data, Internet of Things, 3D printing and augmented reality. Yet, in practice, the concept includes much more than embracing technology.

In the phrase “digital transformation,” the latter word should prevail. Before introducing new technologies into your company, take a while to see where your business is now and which changes it needs. Transformation relates to the fundamental changes in your business model. Digital technologies are no more than just an instrument of such change.

This is true even for many big businesses. Nike, for example, has been taking steps in recent years to grow its direct-to-consumer business to better respond to customers’ needs. A move like this is more than just implementing new digital technology; it also creates lasting change in a company’s values, branding strategy, supply chain and more. Thus, in the case of Nike, I believe digitalization covered the customer approach and the company’s values.

Transformation might also touch upon the product a company makes. Microsoft, for instance, felt the need for change, as it could not confront the competition with Amazon. In the pursuit of better business solutions, the company chose to shift from traditional software development to a cloud network system for both personal and enterprise use.

So, for your digital transformation to be a success, the first step is to keep in mind that digitalization should not be the purpose itself, but an instrument for improving your business.

2. Not Automizing Internal Processes

However hard you try to integrate popular technologies such as artificial intelligence or IoT, doing so will not work until you automatize the processes that need it within your company. From my perspective, one of the best ways to improve internal processes within your business is by introducing a customer relationship management system.

In general, customer relationship management is an approach in which all processes in your company are centered on your relationship with your clients. A CRM system, therefore, is a program that records all the internal processes, develops logic networks and deduces data related to your customers that you might have previously stored in notebooks or spreadsheets. If done right, the introduction of a CRM system can help automatize many routine and essential tasks.

The most important thing when introducing a CRM is trying to understand which feature set is needed. In my experience, many companies do not leverage the full feature sets and just introduce tools due to recommendations by business developers of the corresponding companies. However, if you combine a simple CRM with automatization tools, I’ve found you can save money in comparison to buying a product you won’t fully use.

3. Leaving Your Employees Unprepared For Change

Your company is about the people who work in it. So before diving into the ocean of digital technologies, make sure your people can swim. The success of the whole transformation hinges on the involvement of your employees to the digitalization.

This is where the role of a CEO is crucial. Focus on developing the digital culture of your people. It takes more than just signing papers and passively supporting the digitalization. Promote the idea, motivate and inspire employees at all levels to engage.

As you can see, there are a few things businesses need to keep in mind when pursuing digitalization. But if you take steps to avoid these common mistakes, you can help set your organization up for a successful transformation.

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