The Future of Digital Transformation

Let’s start with a definition. For us, digital transformation means using IT and technology to dramatically change your business for the better.

That may mean a custom or bespoke software product. Or it may mean integrating your systems on the back end, or a complete overhaul of your IT systems and suppliers. Whatever the tech issues, it means focusing on your customers, your market, and your risks. Every choice is to ensure that the internal operation of your company is not limiting its growth.

Another important point is that the transformation is individual to your company. There is no one-size-fits-all solution, and anyone telling you so is after your wallet.

That doesn’t mean we won’t see big changes in the next few years. Again and again we’ve watched as what used to seem like extraordinary technologies—such as voice recognition, complex mapping and routing, and software robots—quietly become a part of the everyday life of a mid-market company.

Similarly, though the excitement about drone deliveries and artificial intelligence seems to have faded, we still think they’re coming. Whenever I see such innovations being tested, I think they’re important guides to what will gradually come to our sector, the mid-market.

How the Pandemic Transformed Digital Transformation

Before we get into what’s coming, it’s useful to look back. The pandemic changed digital transformation in two fundamental ways.

First, everything went online, and faster than we had thought possible. Everyone now expects online sales, service, and support. Business and domestic consumers rapidly adopted online channels for finding and buying a wide range of products and services. This also extended to after-sales and re-ordering, which are online now in a way that seemed unlikely in 2019.

Similarly, paper is on its way out. Cash has been side-lined by electronic payment. Printed brochures and catalogues have disappeared from many sectors. (In fact, if your business is still reliant on paper, that would be the place to start a digital transformation of your company. More ideas here.).

Second, we saw a rapid shift to remote work. Not that it was a simple process: we saw business struggle when their systems and processes were badly integrated and ill-defined. But everyone, whether they liked it or not, quickly got used to collaborating online.

In every situation above, old-fashioned managers were saying, “It will never work.” Which leads me to conclude that often digital transformation is driven by attitude rather than what is technically possible. And attitudes have changed irreversibly.

What’s Coming to the Mid-Market

In the near future, for many mid-market businesses the next phase of digital transformation will focus on the following:

1. Data, data, data. It’s never been easier to accumulate data. Companies will leverage these new assets for smarter use by humans and AI. Combining data from different sources is now far easier, and cloud-based processing allows for rapid insights that would have been unthinkable even quite recently. The businesses that adopt data visualisation technologies, simple machine learning, and process automation will have a competitive advantage.
2. External integration. Internal integration and adoption of the cloud should be in the rear-view mirror. (If that doesn’t describe your situation, that’s the first step to transforming your company.) Businesses should only select tech products that support integration and should gravitate towards suppliers, customers, and partners who form integrated communities. Because integrated communities will out-perform those that are not.
3. Points of difference. As cutting-edge technology becomes more widely available, companies will have to work harder to distinguish themselves by their actual product or service. Their brand really must mean something, and they really do need a competitive edge. For example, now any company can stream movies like Netflix; Disney+ has surged ahead on the strength of its content.
4. Environmental, social, and governance concerns. Both regulators and consumers will insist upon more transparency when it comes to data use and environmental sustainability. Traceability of products, optimisation of materials and energy consumption, privacy, security, and justifiable decision-making will all become part of the digital transformation agenda.
5. Virtual currency. Products and services will be increasingly virtual and paid for with virtual currency. It remains to be seen which form of digital currency will prevail. But mid-market companies need to tune into this accelerating change and invest in new types of virtual storefronts and virtual branding. Though I hate to use the term, this is the metaverse.

What Hasn’t Changed—and Likely Never Will?

Most mid-market businesses are deeply concerned about supply chain issues, recruitment, and energy costs. New technologies—and the judicious application of existing solutions—can ease all these issues, but only if you successfully meet human needs at the same time.

Zoom and shared docs are no substitute for real face-to-face collaboration. You cannot have a real creative discussion, shift entrenched opinions, or lift someone’s spirits online. Digital transformation can drive everyday productivity. But for most people, an enjoyable job also means human contact.

Most people also want their company to have a vision beyond profit. They want to draw more from their work than just their salary. Digital transformation can absolutely make a difference in a mid-market business—but only when you include the human factor.

No matter what your sector or the size of your business, a digital transformation won’t take unless your staff feel included and valued.

With all that in mind, now it’s time to think about your company. If you redo your IT and technology with a magic wand, how would you do things differently? What barriers to growth would you remove?

Here are 10 ideas to start your Digital Transformation Journey. 

For more guidance on digital transformation, see our free, plain-English guides here. And for a no-strings, no-pressure conversation about the digital transformation opportunities within your own business, get in touch.

Digital Transformations – Real world examples of market breakthrough!

Many mid-sized businesses simply see IT as a problem to be overcome or a beast that has to be fed. The Board meeting IT slot is often dominated by discussions about anti-virus software, operating system upgrades, contract negotiations and laptop replacement costs. The Board’s time, money and emotional energy are all used up just dealing with these operational details.

But IT genuinely has the ability to transform a business. There are radical and new ways to grow the business, to serve customers better and to make more profit. Businesses that can connect with these benefits are, understandably, valued far higher than their low-technology competitors.

These opportunities should be the focus of the Board’s discussions about IT.

So what exactly is Digital Transformation?

For our clients, Digital Transformation simply means using IT to deliver dramatic improvement. That’s different to just an upgrade or fixing some niggling problems. It means: using IT to make a significant change for the better.

That may just mean simple IT done well – that’s surprisingly rare! Or it may mean genuine technology innovation, something that is breaking new (or new’ish) ground.

We simplify this issue by defining 4 different kinds of transformation:

1. Market break-through
2. Wow customers
3. Internal redesign
4. Tame the risks

For an explanation about the 4 types, read our post.

This briefing is more information about the first kind, that we call: “Market break-through”. In our analysis, this is really about using your expertise to create entirely new offers. For example, some of our clients have used their expertise to create software that provides new kinds of specialist services; some manufacturers or wholesalers have become retailers; some have cut through supply chains, or they have positioned themselves as new kinds of intermediary, repackaging or combining products and services from other companies.

Market Break-through

In our experience mid-sized businesses often have a huge advantage over their larger competitors in this kind of transformation because:

• they have in-depth expertise in their markets and a detailed understanding of their clients’ business needs
• they are small enough to make rapid decisions and to make changes quickly
• they are not slaves to short-term reporting, and they don’t have a raft of middle-managers focussed on preserving their careers and exploiting their existing incentive arrangements!

The opportunity for ambitious mid-market businesses is to think about your real customers’ needs and to work backwards from there. Start with a blank sheet of paper and work out what your customers really value (which might not be the same as what you currently give them!).

For one of our clients, Amberjack, this means creating new software to provide innovative solutions for their clients. Amberjack is a global expert in future talent and intake based volume outsourcing and work with high profile global businesses who operate in competitive international markets.

As Cynthia Bostock, CEO explained:

“Historically, Amberjack won business based on our highly specialist teams and great levels of service. That’s still true today, but the market moves on. Our clients are companies like Unilever, international brands in ‘The Big 4’, Mars and GSK who rightly expect more, and we can give them more.

The advent of automation and digital assessment, combined with the increasing influence the modern consumer experience has on candidate experience expectations means that strategies that worked in the past to attract and select the very best talent, are no longer effective or competitive.”

“Many of our clients recruit large numbers of graduates and apprentices annually, and expect a slick digital recruitment process to secure the best talent. For outstanding candidates it’s always a buyer’s market and we need to help our clients to stand out from the crowd and attract the very best.”

“We offer real strategic advantage to our clients rather than just cost-saving. For example, offering to help a Big 4 consultancy recruit graduates more efficiently and effectively is interesting, but giving them a way to recruit the very best candidates in an exciting and immersive way offers them long-term strategic advantage. And that is a fundamentally higher-value proposition.

Amberjack created a vision for an end-to-end digital experience for candidates and advanced tools that manage the entire recruitment process online. In the past, high-volume recruitment processes would be something of a paper-factory, which is expensive and (inevitably) error-prone, not to mention time consuming.”

“Amberjack’s clients now have a much slicker process but also have far greater control because recruitment is underpinned by data insight. They can easily review compliance information and ensure they are implementing their diversity agenda or check things like gender balance and even measure the experience candidates receive. These are reasons why international advisory firm Bersin by Deloitte recently named Amberjack as a global HR disruptor for 2018.”

Freeman Clark provided one of our Principals, Kev Cooper, as Amberjack’s IT Director. Kev described the challenge and the opportunity:

“Candidates expect to be able to take part in the process anytime, anywhere – on their smartphone, laptop or tablet. And clients expect flexibility – we need to be able to integrate with their systems to provide a seamless end-to-end process and to meet their exacting standards.

And we’ve only just started, there is so much further we can go. technology continues to evolve at an ever-increasing pace. This industry will continue to be revolutionised by new value-add technologies and Amberjack will be at the forefront, evaluating emerging technologies to ensure we can continue to bring increased value to our clients, the likes of Artificial Intelligence and automation will further deliver innovation to the market.”

Amberjack was nominated for 7 different awards in the 2018 National Recruiter awards and won 4 including Supplier of the Year! For more information about Amberjack, please visit their website https://www.weareamberjack.com

For, CoachHire.com, the opportunity has been to create a platform for connecting buyers and sellers. Across the technology industry, new platforms always attract attention but there are plenty of markets where specialist expertise and relationships are key and established players are far better placed to spot and exploit these opportunities than a technology startup in Silicon valley!

The coach hire industry is typically very fragmented and local and it’s not renowned for technology innovation.

CoachHire.com’s CEO saw an opportunity to help customers find coaches and specific services they need and to bring efficiencies to the coach operators. Mathew Hassell, CEO told us:

“Most coach operators are very small companies with very limited internal systems – often just paper, spreadsheets and whiteboards. On the other side of the equation, people who want to order a shuttlebus or coach may have an urgent need and don’t know where to start.

Our platform gives customers a simple and slick purchasing experience but at the same time, we give the operators technology to help them manage their bookings and allow them to move into the 21st century as well!”

One of the biggest markets for coaches is schools and here CoachHire.com use technology to improve safeguarding and to give parents more peace of mind.

Our Principal Mat Diss is CoachHire.com’s CTO and he explained:

“We can use technology to ensure the operator, schools and parents know where the bus is so parents don’t waste time waiting for a bus that’s delayed and to ensure no-one worries unnecessarily. And we can confirm children getting on and getting off the bus to enhance safeguarding as well.

This is a high profile area and we all remember the story last year of a 4 year old boy left in a coach which returned to the depot, and we aim to address this kind of concern.

But with anything revolutionary you run into new questions and issues – for example, we don’t want drivers distracted by technology. And what if a child stays late for a club or is off school because they’re ill… we don’t want parents to get a message that their child has missed the bus.”

Both CoachHire.com and Amberjack are using their knowledge of their market and their clients’ needs to lead change and to grow whilst offering their customers something significantly better than was previously available.

This may be through a series of improvements, for development of new products or services that progressively become more bold and transformational. Or a single “step-change” … from the old world to the new!

Where to Begin

Starting the journey towards a Digital Transformation is perhaps the most difficult step. The following questions can be a useful kickstart for a Board workshop…

1. What is it your market really needs? What do customers really care about and value?
2. If you started with a blank sheet of paper, how would you do things differently?
3. How can you remove the barriers to enable you to lead this transformation?

Imagine that, tomorrow morning, you read in your trade press that one of your competitors has made a radical change that leaves you behind.

Be the one who does this first!

Freeman Clarke is the UK’s largest and most experienced team of part-time (we call it “fractional”) IT leaders. We work exclusively with ambitious organisations and we frequently help our clients use IT to beat their competition. Contact Us and we’ll be in touch for an informal conversation.

Top 10 Tips for Effective IT Supplier Management – Infographic

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Your IT Suppliers are a critical component to your success. But like any other team, they need managing to ensure they continue providing the agreed-upon services.

Once the honeymoon is over, actively managing your IT suppliers is a critical part of the process. Unmanaged suppliers can become a drain on your time and energy, and provide poor value for money.

Read these four key steps to good IT supplier management.

1. Contract and Service

Think carefully about what you need and what matters most. Ensure that these things are laid out clearly in the contract and service agreement. Also ensure there are Key Performance Indicators (KPI) that measure what matters, and work out in advance what happens if they miss the KPI targets. Read the contract carefully and only sign if you’re happy. And keep your side of the bargain, including paying bills on time.

2. Measure and Report

As the old saying goes, “What gets measured, gets done.” Meet regularly with the supplier — have a clear agenda and insist they provide an objective report on their performance. It’s an opportunity to discuss where they are succeeding and failing, but also to talk about how you can be a better customer.

3. Focus on the Relationship

Choose suppliers who are large enough that they can cope with your business growth, but small enough that you are important to them. And invest in the relationship. An ignored supplier will turn into an underperforming supplier. Treat their people well and say thank you!

4. Plan Ahead for Renewal — or Replacement

Never find yourself renewing a contract merely because you have run out of time to look elsewhere! Plan out the time it takes to identify alternatives, tender, shortlist, negotiate, and then go live with an alternative supplier. Work backwards from the renewal notice date to identify when you would have to kick off this process.