Let’s be honest. Companies underperform due to misalignment within the organization.
Conflicting priorities result in sub-optimal team performance and poor results. Once people are aligned, there will be a greater level of mobilization towards the achievement of shared goals.
So, how do you get alignment within a company? One of the keys is digital transformation, which is defined by Hewlett Packard Enterprise as “the process of integrating digital technology into all aspects of business, requiring fundamental changes in technology, culture, operations and value delivery”.
True digital transformation uses the principles of new technologies to fundamentally rethink what’s possible in the business from ground-up, including disrupting existing processes and redesigning the business model, according to a white paper by Harvard Business Review.
Digital transformation is powerful because it leads to productivity gains. Empirical evidence shows financial services firms that invested in digital technologies reported a productivity growth of 11.3% per annum, according Roubini ThoughtLab.
Productivity gains is forecast to add US$13 trillion to global GDP by 2030 from today through digitization, automation and artificial intelligence, according to McKinsey Global Institute.
As a starting point, digital transformation must be considered at a strategic level.
There needs to be executive alignment on how the business can be digitized to grow profitability.
Consequently, at a tactical level, business leaders can deploy a range of digital technologies to be more competitive.
These include web technologies, cloud-based services, mobile devices, big data, internet of things, artificial intelligence and robotics.
For instance, within the cloud services market, there is a range of offerings available to the CFO including software-as-a-ervice (SaaS), business process service (BPaaS), system-infrastructure-as-a-service (IaaS), and application- infrastructure-as-a-service (PaaS)—which is a combined US$214 billion market, according to Gartner predictions.
For a corporate executive team contemplating digital transformation, the following questions need to be asked when the current state of the company is low on the maturity scale of digitization:
- Why will a digital strategy make a company more competitive and improve its customer value proposition?
- How can digital technologies increase employee engagement? and
- What parts of the strategic supply chain can be automated to improve customer experience?
Gaining competitive advantage
Customer focus must be constantly sharp to win in the marketplace.
Deepening the understanding of a customer segment is a continual process and a critical success factor.
Customer segmentation can be vastly improved with big data and predictive analytics.
Gaining market share or improving margins can be enhanced by digital technologies that turn data into information that provides customer insights, leading to better ways to serve the customer.
Digital technologies that are deployed across key business processes (such as sales and billing) can enable large volumes of data (in the range of exabytes or gigabytes, depending on the industry sector) to be processed, to inform business decisions and develop tactical actions.
For example, artificial intelligence is applicable in fraud management and producing customer insights across loan and deposit products, in the retail banking sector, according to Accenture.
Increasing employee engagement
Employee engagement increases when there is greater alignment within an organization.
One of the smartest ways to gain alignment is to embrace software-as-a-service offerings focused on automated workflow management and unified communications.
Automated workflow management is collaboration software that allows employees to categorise business issues and collectively resolve them.
With this software, cross-functional teams can achieve clarity of purpose on business matters, on a real-time basis, across multiple geographies and time-zones.
Automated workflows encourage teams to adopt a structured approach to designing solutions, by working on the whole problem or separate parts of the problem, that are at different stages of completion, with different levels of interdependencies and priorities.
Unified communications is key to driving alignment in today’s digitally-connected workplace, especially with a mobile workforce.
A subscription-based, unified-communications-as-a-Service (UCaaS), consisting of telephony, video conferencing and instant messaging platform, hosted in the cloud, perfectly complements any collaboration software, to lift employee engagement.
From a CFO’s perspective, the main advantage of a cloud-based solution is to adopt elements of a pay-as-you-go business model, with the ability to reduce capital intensity (CAPEX) and increase variability in operational expenses (OPEX).
Automated supply chain
Businesses that thrive in the economy are an integral part of their trading ecosystem. Joining up value-chain partners with digital technologies that result in an end-to-end improvement in efficiencies, will ultimately benefit end-customers.
CFOs can seek out service providers that automate the supply chain with the aim of reducing the cost to serve the end-customer.
For example, there are innovative provisioning and billing software companies that enable the telecommunications sector to shift from traditional PBX to IP PBX (Internet Protocol Private Branch Exchange) to effectively deliver UCaaS. Such software companies digitally connect OEMs (telecom vendors and any other kind of vendor of subscription-based services) to end-users, in the cloud, via resellers in the information, technology and communications sectors.
They are vital in the cloud management ecosystem. From a CFO’s perspective, an automated supply chain means continuous delivery of quality products and services to end-customers.
Digital transformation needs to be governed by a strategic framework that evaluates digital technologies as a way to create long-term value.
Most critically, Cisco estimates 40% of all businesses will not survive if new technology is not sufficiently embraced.
Therefore, CFOs will be required to demonstrate additional competencies to operate effectively within the limits of a hyper-connected, digitized business environment.
About the author
Fon Hah is CFO at Tech Project Holdings, an unlisted public company. A Chartered Accountant of Australia and New Zealand, he has held VP positions in corporate strategy at Microsoft, and in M&A at Wesfarmers. Hah is primarily an entrepreneur, having built and invested in businesses in the telecom, media and technology sectors. He also served the Australian Department of Defence as a special consultant. He has a Masters of Applied Finance, Macquarie University, Australia.