The ‘real’ digital transformation applies to companies that have been operating on the market for 20-30 years and were established in Poland after 1989. These are the companies that started creating the free market economy. In many cases, the operating model introduced back then continues to this day, and it has proved itself well over the years, up to the time of the Internet. And for historical reasons, the subject of digital transformation is foreign and incomprehensible in many cases. Unless the succession has already occurred and the next generation has taken over the reins, but in this case transformation in traditional models is much more difficult.
One of the flagship arguments for carrying out the digital transformation is better and more effective contact with customers, a much more effective process of acquiring new customers and markets, and it becomes much easier to present and implement new products and services. The key issue for a typical company before transformation is to answer some questions:
- How to switch from a traditional model based on interpersonal relationships to a fully digital model?
- What values will the client get from the transformation?
- How will this strengthen our competitive advantage?
- And does it have to cost so much?
These questions will be answered by Artur Piekarczyk, a board member of Allwins – an organization supporting the development and digital transformation of enterprises, and a co-founder of One – producer of a B2B trading platform in the subscription model.
How do you reach companies interested in digital transformation?
At this stage of our company’s development, customers invite us to meetings directly. They are looking for the help of someone who has already done something like this, and when they read our story, they know that I have experience in leading organizations through this process. Very often the need for transformation or digitization arises together with the plan to launch an online store.
How do these meetings usually go?
One of my first and most important questions at the meeting is: ‘What is this platform for? Why do you want it?’ There are different answers, but most often what I hear is, ‘we need a platform because customers ask about it and the competition already has something’. In many cases, the idea of copying what the competition has is brought up, but unfortunately this applies most often only to those aspects that can be seen from the client’s side. I don’t know much about cases when the customer is fully aware of the complexity of processes involved in a good B2B store. Managing products, their descriptions, photos or catalogs is not in a form that can be used immediately. The price building model is also most often unspecified and far from an automatic and standardized model for a selected customer or customer segment. And suddenly it turns out that simply copying a competitor’s page won’t help, and then the real discussion about the challenges of transformation begins. Because a new online store is not the same thing as a transformation.
So what are the next steps? Do companies decide to carry out the transformation, or do they give up after this first conversation?
Contrary to appearances, this first conversation indicates the challenges and potential problems on the road to excellence; often the first barrier to overcome are the nuisances with which companies fight every day. Our conversation and presentation increases awareness of the need for this change and, despite the fear of the project’s size, customers want to keep talking. So, we determine what needs to be done to get the project up and running. Unfortunately, it often turns out that there is a lack of human resources at the start to implement these ideas. Potential candidates for transformation are often strategic employees (e.g. head of marketing or sales) who work in the old model and do not have or may not have the time or willingness for such implementation. We advise then to show employees the entire transformation model and to install whole teams for change. Knowing the goal and giving a large dose of motivation to change, it is easier to find a project team often composed of regular employees but with great commitment. This makes the change much easier to implement. An important and underappreciated issue is clear communication about how implementing the transformation will make everyday work easier for everyone.
So, we already have a project team. What’s next?
Usually, it turns out that the strategy that the company has needs to be completely redeveloped, because it is now obsolete and there is nothing about automation and standardization of processes, not to mention digitization and transformation. Therefore, to talk about the digital transformation of a company, its goals should be defined. To do this, one must understand well what the beginning of transformation is, i.e. the process of digitizing what is analogue today. When I talk about it, the most common reaction on the part of the board is to be horrified. Digital transformation in a company with 30 years of experience is not evolution. It is a revolution, a complete restructuring of the enterprise.
When are we talking about restructuring a company instead of about the digital transformation process?
The company’s lack of readiness for digital transformation overnight is evident in every successful enterprise, and the greater the success and the longer the prosperity, the greater the attachment to tried and trusted solutions. So, ideas for using new technologies are an unexpected and profound change for many people in the company. And at this point we have an explosive mixture, a recipe for restructuring. Old processes that have never been automated and work only thanks to people with many years of experience, product and service valuation models that never have structure and operate in the customary process “that is, this customer always had a better deal … and that always promised to be big, that’s why they get such discounts,” the exact description of the products and services on offer is, for example, in graphics processing programs, because it was only needed for catalogs and printed price lists, and the document circulation process was never described, because it works … and that at the cost of several junior-level jobs? Well, when the profit margin was bigger, somehow, everything got done. And if even one of the stories described takes place in our example company and the client is thinking about a true digital transformation, it can’t be done without changing old practices and habits. And in this case, we are talking about restructuring.
So what is the difficulty in making these changes?
Convincing people that it makes sense. Employees, as I said earlier, are skeptical and reluctant to restructure, because they treat it as an invention, an unnecessary spoiling of processes that they think are effective and have always worked “somehow” to this day.
In addition, the restructuring itself – the replacement of the known with the unknown – is badly associated, because we assess, measure and repair errors from the past. That is why the transformation is best when it is difficult or there is a powerful determination for this transformation at the board level, which leaves no illusions about the need for change. The inevitability of change must be presented at the board level as an absolute thing. The need for restructuring is obvious then, although it remains difficult to motivate everyone.
A common mistake at the level of senior managers, and sometimes also of the board, is the belief that digital transformation is just a change of technology: we’ll buy an online store and then we’ll be digital… and this thinking is not easy to straighten out. This is a misconception, and it is obvious that technology is secondary. And these are actually the first challenges, to refute myths and awaken the motivation to work hard.
So what are the most important steps that will allow companies to successfully complete the digital transformation process?
I distinguish three factors guaranteeing the success of a full digital transformation, which we’ve already discussed. And more precisely, in order from the most important are:
- Human – the employees involved. The challenge is to effectively communicate the need for change throughout the organization. A strategy attractive to all generations of employees must be built. The most common fear is the fear of losing your job after the digital transformation. We all know the feeling of doubt: “Will robotization and digitization take over my job?” This thought makes it difficult to carry out the transformation. The strategy must therefore describe the role to be played by each of us. After restructuring and transformation, we need to feel needed – only then is there a chance for above-average involvement.
- The second factor is obvious – a clear change strategy. Simple and precise processes. The whole package must be attractive and give something more than just the trouble of implementing new tools. And both a satisfied customer and I, as an employee, should be in every paragraph of every strategic document, because only in this way can we build something today that will help to give us the extreme competitive advantage so expected by management boards and owners.
- The third factor also comes down to us, that is, technology appropriate to the level of our change and to the size of our strategy and expectations. Neither too big nor too small, but exactly in time to achieve our goals and implemented in such a way as to quickly achieve the first small successes. So that enthusiasm does not fade and we are able to overcome the difficulties that arise when implementing even the simplest solutions.
And now with the belief that we understand these three areas, we can make our dreams of a better tomorrow come true.
As you can see, digital transformation understood as technology or systems is only the end result of a complex project, which is the restructuring of the company, and thus adapting processes to the expectations of our most important customers. The project itself is not something obvious, because each organization has slightly different challenges. An individual approach is therefore necessary to achieve final success. So if we want to do it, it is also worth planning and anticipating intermediate steps, which are not always easy to name and identify without practice and experience. The end result, however, almost always raises our satisfaction and joy. And today, digital transformation is not only an alternative to the development of a traditional enterprise, but also a necessity in order to adapt to the ever-growing expectations of our increasingly digital customers.