Digital Transformation in Retail and Consumer Products (CP) is a commitment worth its weight in gold
While DT (Digital Transformation) may seem like an overused term, it is top of mind for CP manufacturers and retailers today because there is a notable realization that technology can boost productivity, efficiency, and profit. Who doesn’t want all of those things? Common challenges arising across organizations include everything from communication and workflows to visibility and agility, making DT a commitment that is worth its weight in gold.
DT requires planning, strategy and an integrated approach. “Crossing the bridge when you get there,” as they say, is not the ideal approach when it comes to mapping a digital transformation. The realization of the need for a DT usually begins with a project. Regardless of the size of the project, its success is dependent on many factors and often a combination of those factors. With a vast amount of project work under my own belt, I’m confident that the key success factors of digital business acceleration are: technology, approach, strategy, people and commitment.
A BCG (Boston Consulting Group) study tested more than 35 factors and all of the possible combinations. See BCG’s Proprietary Research. DT projects can create sweeping changes such as automation of previously manual tasks. For other organizations, it is about replacing older technology with newer, updated systems or a combination of both. It’s best to begin with an evaluation or discovery of your overall process from beginning to end.
You’ll want to start with these questions:
- What’s broken?
- How did it become broken?
- How can it be fixed?
- What’s the downstream impact of a change?
- Can digitalization fix this?
- What specifically needs automating?
BCG found that among 70 leading companies worldwide, “70% of digital transformations (projects) fell short of their objectives, often with profound consequences.” The need for new ways to work have been accelerated by the pandemic. I believe these failures lacked what is described below.
5 Secret Clichés
Center of the Universe
The pandemic dramatically changed business models and pushed companies to shift their digital initiatives into overdrive, quickly moving test programs into production. Getting the right data to the right place is problematic when data is distributed across clouds, servers, and machines. To survive in this new digital economy, CP players must capitalize on the growth of data resources.
Better Mouse Trap
Using nothing at all, using a system that is not designed for a business process, or the lack of frequent evaluation of systems against processes to identify purpose-built systems, are the three most common underlying reasons for a failed digital transformation. Without regular evaluation of collaboration tools and awareness of what could go wrong, the opportunity for preventative maintenance is lost.
Lipstick on a Pig
DTs fail due to implementation of “shiny object” technologies onto broken processes, and teams that are resistant to change. CP manufacturers and retailers can improve business transformation results by developing integrated strategies that start with a goal-driven process and organizational design with change management at the forefront.
Resistance is Futile
Digital transformation requires change, specifically in people who are involved in the process. Often employees prefer the status quo and resist change. Frequently, an organization’s costs, decisions, and productivity initially move in the wrong direction before long-term benefits are realized. Change must start at the top. Not only does leadership need to be aligned, but the whole organization may need a drastic cultural shift.
Horse and Buggy Thinking
Successful transformations begin by differentiating between digitization (conversion of products or processes into a digital form) and digitalization (taking what was accomplished by digitizing product specifications and processes that may be managed in spreadsheets and then building out how to automate, integrate and harmonize processes to reduce workload). Digitization is just the first of many steps, while digitalization will transform an entire organization.