The 3 pillars of a successful digital transformation
Posted: Tue Dec 10, 2024 8:29 am
In addition, due to the labour shortage , Canadian SMEs must invest in digital technology to improve their efficiency and profitability.
But where do you start to make a successful technology investment? How do you target your needs? How do you determine what should be prioritized?
Our goal in this blog post is to explain the main steps to follow in order to successfully achieve digital transformation, improve your efficiency and increase your profitability.
Create a digital strategy
In order to organize your efforts and target the most promising initiatives, you first need a comprehensive plan.
IT is often thought of as a function of the organization like any other. There is no overview of the company's objectives and technological developments. For example, finance acquires an accounting system and HR buys personnel management software without consulting each other. This creates information silos, and the systems do not talk to each other.
A digital strategy allows you to:
placing technology at the heart of your business strategy;
choose technologies that fit your business objectives;
establish links between various projects and services;
prioritize the initiatives that are most beneficial to your business.
To be most effective, however, your digital strategy must go beyond technology investments. Purchasing new software or machinery must go hand in hand with creating a digital corporate culture supported by specific training for your staff, as part of a sustained effort to improve your operational efficiency.
Establish a digital roadmap
By having a better overview of the processes you want to move to digital, you can begin to build a roadmap and timeline.
This roadmap should prioritize critical systems that form the foundation for future development. You can also identify opportunities for immediate gains that will build momentum for your project and help your staff see the benefits of digital.
As you can see in the digital roadmap example below , process improvement and change management should ideally happen in parallel with the selection and implementation of a new system.
Enlarge image
The 3 pillars of a digital transformation
Having worked with a large number of companies from various sectors and sizes across the country, we have realized that, to be successful, a digital transformation must be based on the optimization of key processes, cultural change and the integration of information.
1. Optimization of key processes
Selecting certain systems, for example for enterprise resource planning (ERP) or customer relationship management (CRM), is often very risky. Optimizing key processes is therefore an exercise that we suggest to a growing number of business owners in order to limit risks and maximize return on capital.
A process is a series of activities or operations that must take place in a specific sequence to create added value for the customer, in the form of a product (physical transformation flow) or a service (information transformation flow).
A company's most important systems will typically be chosen based on its key business processes. For a company that manufactures doors, for example, these processes will be the transformation of wood or aluminum into doors.
But processes are often established without conscious planning. We get into rich people database the habit of doing things without first determining whether it is the best way to operate. The results: informal and undocumented activities that are often unnecessary, costs, delays, loss of quality and a lack of value creation for your customers.
You can't add a layer of technology on top of a broken process. It will only make things worse. Therefore, you need to identify critical broken processes and optimize them before implementing a new system in the company.
Mapping processes to better understand them
To do this, we usually start by mapping the processes already in place in the company.
It is often difficult to see how a process works as a whole. Beyond the theoretical idea of how it works, it is therefore necessary to take the time to talk with the staff members who carry out the work.
The goal is to identify waste and identify issues that need to be addressed. This exercise will also give you an opportunity to examine your current technologies, how you use data, and what skills or resources are lacking.
Prioritize for greater efficiency
A successful digital transformation does not require optimizing all of the company's processes. In general, the majority of important activities are already running smoothly. It is better to focus on the 20% of critical processes, the most visible ones, those that bring the most value in the eyes of the customer.
It is recommended to first optimize critical processes that are failing in terms of quality, costs and deadlines. As for the other critical processes of your company that you consider efficient, document them to facilitate the integration of new systems. Subsequently, the other processes can be adapted according to the best practices proposed by the integrators of the solution.
What concrete solutions?
Process optimization will allow you to resolve issues such as delays, uneven production quality (rework, rejections), inefficient working methods or a high number of customer complaints.
Among the solutions you can implement are:
process mapping to eliminate non-value-added steps.
clarifying roles and responsibilities so that staff members know what is expected of them.
implementing a dashboard to measure and monitor performance.
the use of technology to automate certain tasks.
breaking down silos through cross-training and implementing open workspaces that foster collaboration.
2. Cultural change
A successful digital transformation also requires a philosophical change in the company. The key to this success lies in the participation of staff at all levels.
The Kaizen approach , for example, can be an extraordinary lever for initiating cultural change.
Developed in Japan by Toyota in the 1940s , this technique consists of forming multidisciplinary teams composed of staff members participating directly or indirectly in a process. These problem-solving teams discuss ways of doing things in order to detect sources of waste and resolve these issues.
The idea is to gradually but quickly make changes in order to optimize the ways of doing things and, subsequently, to support them with digital solutions.
Processes at the heart of cultural change
The Kaizen approach is an example of the tools that can be used to modernize a corporate culture and make it more efficient. In a traditional company, decisions are often made in silos. For example, the COO decides on operations and the sales manager makes sales-related decisions.
In a process-centric approach, decisions are made by all teams in the affected sectors, which contributes to the development of cross-functional synergy. This approach allows:
breaking down silos;
focus on the company's overall activities;
focus on customer needs.
3. Integration of information
One of the key elements of digital transformation is the increased use of data to make informed decisions as quickly as possible, both for employees and the management team.
Integrate systems
One of the major challenges of effective information integration is that many technologies operate in silos. Within these silos, information flows, but it struggles to move from one department to another. Worse, instead of being stored digitally, information is sometimes kept in Excel files or even on paper. This results in a large number of manual manipulations, transcriptions and compilations of data.
Global integration into an all-in-one system helps reduce time wastage and risk of errors.
Adopting a single system allows you to connect the different systems in your company. In fact, there are more and more entry-level ERP or CRM systems that SMEs can use to integrate their systems without much difficulty.
Thinking about data usage
Beyond the technical challenge of connecting all the machines for data collection, it is important to know how to give the right information to the right person at the right time in order to decentralize decision-making.
There may be work instructions for all staff members, but there is also more concrete knowledge about equipment performance and team capacity. You won’t need complex machines to record and use this information, but rather tailored management models to make the right decisions. Once in place, this data will allow you to make operational and strategic decisions that you can measure and compare as needed.
But where do you start to make a successful technology investment? How do you target your needs? How do you determine what should be prioritized?
Our goal in this blog post is to explain the main steps to follow in order to successfully achieve digital transformation, improve your efficiency and increase your profitability.
Create a digital strategy
In order to organize your efforts and target the most promising initiatives, you first need a comprehensive plan.
IT is often thought of as a function of the organization like any other. There is no overview of the company's objectives and technological developments. For example, finance acquires an accounting system and HR buys personnel management software without consulting each other. This creates information silos, and the systems do not talk to each other.
A digital strategy allows you to:
placing technology at the heart of your business strategy;
choose technologies that fit your business objectives;
establish links between various projects and services;
prioritize the initiatives that are most beneficial to your business.
To be most effective, however, your digital strategy must go beyond technology investments. Purchasing new software or machinery must go hand in hand with creating a digital corporate culture supported by specific training for your staff, as part of a sustained effort to improve your operational efficiency.
Establish a digital roadmap
By having a better overview of the processes you want to move to digital, you can begin to build a roadmap and timeline.
This roadmap should prioritize critical systems that form the foundation for future development. You can also identify opportunities for immediate gains that will build momentum for your project and help your staff see the benefits of digital.
As you can see in the digital roadmap example below , process improvement and change management should ideally happen in parallel with the selection and implementation of a new system.
Enlarge image
The 3 pillars of a digital transformation
Having worked with a large number of companies from various sectors and sizes across the country, we have realized that, to be successful, a digital transformation must be based on the optimization of key processes, cultural change and the integration of information.
1. Optimization of key processes
Selecting certain systems, for example for enterprise resource planning (ERP) or customer relationship management (CRM), is often very risky. Optimizing key processes is therefore an exercise that we suggest to a growing number of business owners in order to limit risks and maximize return on capital.
A process is a series of activities or operations that must take place in a specific sequence to create added value for the customer, in the form of a product (physical transformation flow) or a service (information transformation flow).
A company's most important systems will typically be chosen based on its key business processes. For a company that manufactures doors, for example, these processes will be the transformation of wood or aluminum into doors.
But processes are often established without conscious planning. We get into rich people database the habit of doing things without first determining whether it is the best way to operate. The results: informal and undocumented activities that are often unnecessary, costs, delays, loss of quality and a lack of value creation for your customers.
You can't add a layer of technology on top of a broken process. It will only make things worse. Therefore, you need to identify critical broken processes and optimize them before implementing a new system in the company.
Mapping processes to better understand them
To do this, we usually start by mapping the processes already in place in the company.
It is often difficult to see how a process works as a whole. Beyond the theoretical idea of how it works, it is therefore necessary to take the time to talk with the staff members who carry out the work.
The goal is to identify waste and identify issues that need to be addressed. This exercise will also give you an opportunity to examine your current technologies, how you use data, and what skills or resources are lacking.
Prioritize for greater efficiency
A successful digital transformation does not require optimizing all of the company's processes. In general, the majority of important activities are already running smoothly. It is better to focus on the 20% of critical processes, the most visible ones, those that bring the most value in the eyes of the customer.
It is recommended to first optimize critical processes that are failing in terms of quality, costs and deadlines. As for the other critical processes of your company that you consider efficient, document them to facilitate the integration of new systems. Subsequently, the other processes can be adapted according to the best practices proposed by the integrators of the solution.
What concrete solutions?
Process optimization will allow you to resolve issues such as delays, uneven production quality (rework, rejections), inefficient working methods or a high number of customer complaints.
Among the solutions you can implement are:
process mapping to eliminate non-value-added steps.
clarifying roles and responsibilities so that staff members know what is expected of them.
implementing a dashboard to measure and monitor performance.
the use of technology to automate certain tasks.
breaking down silos through cross-training and implementing open workspaces that foster collaboration.
2. Cultural change
A successful digital transformation also requires a philosophical change in the company. The key to this success lies in the participation of staff at all levels.
The Kaizen approach , for example, can be an extraordinary lever for initiating cultural change.
Developed in Japan by Toyota in the 1940s , this technique consists of forming multidisciplinary teams composed of staff members participating directly or indirectly in a process. These problem-solving teams discuss ways of doing things in order to detect sources of waste and resolve these issues.
The idea is to gradually but quickly make changes in order to optimize the ways of doing things and, subsequently, to support them with digital solutions.
Processes at the heart of cultural change
The Kaizen approach is an example of the tools that can be used to modernize a corporate culture and make it more efficient. In a traditional company, decisions are often made in silos. For example, the COO decides on operations and the sales manager makes sales-related decisions.
In a process-centric approach, decisions are made by all teams in the affected sectors, which contributes to the development of cross-functional synergy. This approach allows:
breaking down silos;
focus on the company's overall activities;
focus on customer needs.
3. Integration of information
One of the key elements of digital transformation is the increased use of data to make informed decisions as quickly as possible, both for employees and the management team.
Integrate systems
One of the major challenges of effective information integration is that many technologies operate in silos. Within these silos, information flows, but it struggles to move from one department to another. Worse, instead of being stored digitally, information is sometimes kept in Excel files or even on paper. This results in a large number of manual manipulations, transcriptions and compilations of data.
Global integration into an all-in-one system helps reduce time wastage and risk of errors.
Adopting a single system allows you to connect the different systems in your company. In fact, there are more and more entry-level ERP or CRM systems that SMEs can use to integrate their systems without much difficulty.
Thinking about data usage
Beyond the technical challenge of connecting all the machines for data collection, it is important to know how to give the right information to the right person at the right time in order to decentralize decision-making.
There may be work instructions for all staff members, but there is also more concrete knowledge about equipment performance and team capacity. You won’t need complex machines to record and use this information, but rather tailored management models to make the right decisions. Once in place, this data will allow you to make operational and strategic decisions that you can measure and compare as needed.