In our last blog, Six digital building blocks and how you can use them we looked at the first two building blocks from McKinsey and Company's September 2015 article, Six Building Blocks for creating a high-performing digital enterprise and what they mean for small and medium businesses (SME).
In this blog, we look at blocks three and four, automation and organisation
The digital building blocks: automation and organisation
Three statements from the McKinsey article on automation should be taken on board by every SME:
- "Business-process automation can result in massive competitive advantage because initial investments, when well implemented, can scale quickly without substantial additional costs".
- "While there is often the assumption that process automation is a large project focused on a major platform, digital leaders in fact drive value quickly by focusing on a series of small but important solutions that target high-value customer journeys and expectations (for example, real-time availability and personalized treatment)."
- "Becoming digital often requires reinventing the entire business process to cut out steps altogether or reduce the number of documents required."
Our Take: What processes can you reduce, eliminate or automate
Almost every business has processes that can easily be automated using digital tools. Often these tools are simple and low cost. Here are some examples from projects we have been involved in.
- A removalist business client who has built online forms to allow prospective clients to get simple quotes online. This process has freed up a day a week in the business in the resulting elimination of manual processing and double handling
- A consulting client that uses online diagnostics to help their clients and customers self diagnose issues around change management and growth and profit issues. This provides value to prospective customers at the outset with no effort and leads to more inquiries, closed sales and ongoing business.
- A construction products client who has developed an automated tool for design engineers so they can develop design specifications online. This saves the engineers a lot of time but also ensures the construction company's products get included in more designs.
What can you do differently? This statement we saw on Linkedin recently should get you thinking!
In the words of McKinsey:
- "Companies know that rigid, slow-moving models no longer cut it. The challenge is to move toward a structure that is agile, flexible, and increasingly collaborative while keeping the rest of the business running smoothly."
- "Some 65 percent of digital leaders have a culture that isn’t afraid of risks, for example, and have a high tolerance for bold initiatives."
Our Take: Smaller Organisations can become digital more quickly - senior management just needs to take the plunge
There are two types of traditional managers, in traditional businesses, in traditional industry sectors that we see:
- The ones that say "We have always done it that way." and stand paralysed as everything around them changes. Their business and industry is facing massive disruption, they just haven't realised it yet. They can be helped but only when they join the group below.
- The ones that realise that digital is either a massive threat or a massive opportunity, or in fact both. This group is willing to take the first step and open the organisation up to truly consider digital.
The wiser managers and leaders in the second group realise that in most cases they can't change things overnight - they do two things:
- They set a broad long-term vision for the business (where they want to be over a 3 or 5 year period).
- They quickly set about getting quick wins in the short term.
In addition, these managers will put in place a raft of new practices that improve internal collaboration, they embrace agile and rapid prototyping. They won't be afraid to question the existing business model and processes.
They also realise that digital transformation is culturally difficult - many current employees won't like the changes and will leave. Others may find their skills are no longer relevant. This is starting to happen in IT departments for example - with the move to cloud technologies many traditional network engineers who specialise in "boxes and wires" find their skills are simply no longer needed.
In our next blog, we will look at building blocks five and six, Technology, and Data & Analytics.
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