10 BULKDISTRIBUTOR Digitisation May / June 2021
Digital transformation – a clear-cut case
More than ever , companies in the logistics and distribution sectors are being told that they need to prioritise digital transformation to adapt . Yet in a fast changing world many find the idea somewhat daunting . This should not be a surprise . For all the promises of technology , there are just as many buzzwords and contradictory pieces of advice . This has discouraged many companies from pursuing digital technologies , despite the benefits . Epicor , which provides cloud solutions particularly for distribution and supply chain operators , has developed a playbook * to guide firms through the necessary steps of implementing a digital transformation strategy . The playbook points out that only 27 percent of organisations today have a comprehensive digital transformation roadmap in place . Looking ahead to 2022 , however , that number is expected to jump to 75 percent . Companies that have successfully achieved this transformation – and realised the benefits – have taken practical steps that others can also take . Epicor aims to help clearly define and break down digital transformation to set out these steps , where to start , and how to begin with practical initiatives . The playbook identifies four scenarios ripe for digital help :
• You know digital technology can improve your business , but you don ’ t know where to start .
• You ’ d like to go digital but can ’ t imagine how it ’ s possible with limited time , people , and resources .
• You ’ ve heard about digital transformation but it all just seems overwhelming and theoretical .
• Your customers and employees are asking for digital ways to buy from and collaborate with you .
Simple definition
Digital transformation has been so heavily covered recently that it is easy to forget what it means – and what it doesn ’ t . A simple definition is : digital transformation is the act of integrating digital technologies to replace older processes and technologies to create new value , ultimately driving quantifiable impacts on business . However , it is necessary to drill down into this definition . ‘ Digital technologies ’ refers to any enabling digital technology – not just artificial intelligence ( AI ), blockchain , or the Internet of Things ( IoT ). Other digital technologies that are already known and proven , such as business intelligence , e-commerce , cloud , and document management are also critical parts of the digital transformation journey . ‘ New value ’ can be defined along a spectrum : improvements , innovations or transformations . Improvements make the core business more efficient . Innovations are the acts of creating net new offerings . Transformations involve disrupting the status quo in your industry or supply chain . Digital transformation doesn ’ t have to imply turning your business upside down , using new and unknown technologies , or going ‘ digital ’ simply for the sake of it without a proper approach . Finally , ‘ quantifiable impacts ’ means any good digital transformation must deliver strategic value in ways that can be measured and monitored . To qualify as a valuable and worthy digital transformation effort , a business should be able to point to the quantifiable impacts that an initiative will have on the operations of the business and / or the ability to compete better in current market or new markets . Epicor lays out six key reasons digital transformation is needed today . 1 : Exceed changing customer expectations As a new generation of ‘ digital natives ’ enter the market , these customers expect experiences that enable seamless discovering , buying , and interacting with a company throughout the lifecycle . If outdated experiences are getting in the way of satisfying and delighting these customers , digital transformation can help improve lead generation , sales cycles , closing rates , repeat business , customer satisfaction , and customer support costs . 2 : Attract and retain high-quality talent
Data analytics and visualisation help unshackle a company from the grind of data collection and static reporting
Just like the new generation of customers are entering the market , so too is a new generation of digital native employees and talent . Your people want the best digital tools to do their work easily and with more productivity , in addition to learning new digital technologies to keep their skills up to date . In this light , digital transformation is an investment in people as much as it is in technology . 3 : Leverage new technological possibilities How many things might you be doing in your business just because ‘ that ’ s the way it ’ s always been done ’? False constraints like analogue processes might be holding back your team and business from growing and changing . New technological possibilities can unlock time and value by challenging orthodoxies about how your business works . 4 : Thwart new types of competitor Just like Netflix disrupted the distribution channels of video rentals , all industries are susceptible to new entrants that configure as a digital business from the outset . The things they often lack in start-up mode , however , are customers and data – things you likely have . Take a proactive approach to be the disruptor – instead of getting disrupted – by using digital to transform your business , but also your industry before competitors do . 5 : Adapt and thrive in a remote world Seemingly overnight , COVID-19 forced businesses , employees , and consumers to re-imagine their operations in a remote world . The adoption of remote-related technologies has no doubt changed the industry permanently , presenting new challenges and opportunities that digital can address . 6 : Build agility and resilience There ’ s no denying that the pace and volatility you face today seem only to be increasing . Digital technologies make your business more agile and resilient by sensing change sooner , making change and business pivots easier , and being able to monitor progress better and with more precision . So having outlined the case for digital transformation , what technologies are available ? Cloud technology . Using cloud-based software makes services and applications available to users on-demand via online servers , as opposed to being provided from a company ’ s on-premises servers . For example , when an enterprise resource planning ( ERP ) system is built on and delivered via the cloud , the digital journey is accelerated because a business can run and grow without having to worry about key issues that haunt on-premises deployed systems , like cumbersome customisations , a server refresh , or threat of ransomware . Cloud technology enables a business to track reduced operational costs as integrated data from operations can help identify and address inefficiencies faster and with greater precision . It can also mean decreased security costs , as with cloud solutions , the system vendor makes security its top priority , allowing your team to focus on growth . Concomitantly , it frees the IT department from the burden of administering a database , operating systems , or applications , and eliminates the need for hardware – and the risk , maintenance and upgrades that come along with it – as a business scales and grows . Enterprise content management . Enterprise content management ( ECM ) makes managing business documents easier , faster , and with greater consistency and control . Documents and files that used to be unstructured are now stored centrally and made available to employees and customers . This improves productivity with faster , easier document discovery and management . Customer and supplier experience is enhanced through providing quick access to information . Moreover , streamlining document discovery and critical information needed for decision-making results in reduced errors . Data analytics & visualisation . Data analytics and visualisation unshackle a team from the grind of data collection and static reporting . This technology , which can be fed directly from the ERP , brings numbers to life through dynamic reporting and compelling visualisations that help users pay proactive attention to revenue ,
expenses , and other KPIs that matter . With real-time analytics delivered digitally , businesses can stay connected to their revenue and performance numbers and be able to make informed decisions promptly . Smart shipping . Smart shipping technology enables a business to process shipping transactions faster and more efficiently , critical when the pace of order fulfilment is growing . When shipping integrates with the ERP , details are automatically pulled in , shared with carriers via the web , and estimated for freight charges and tracking information . All of this automatically appears in the ERP system in real-time , letting the user process any shipment using any licensed carrier all from the same screen . Epicor says businesses will see a significant reduction in errors associated with manually taking data from the carrier to the ERP system . And – if integrated – all this triggers automated invoicing of freight charges . The most significant business outcome smart shipping delivers is the ability for employees to handle enquiries from customers anxiously awaiting deliveries . Electronic data interchange . Electronic data interchange ( EDI ) is a set of standards that defines common formats for information to be exchanged electronically between two organisations that do business together – or ‘ trading partners ’. It allows companies to speak the same language electronically and communicate more efficiently to be digitally connected . EDI has long been used by container owners communicating with cleaning depots , for example . It eliminates paper-based process and manual processing – and the inefficiencies that come with it – by automating the electronic flow of information in packets of formatted data . It has become a global standard for information exchange between trading partners .
Three lenses
But digital transformation is not just about technology . There are two other critical factors for success : people and strategy . The intersection of ‘ three lenses ’ – people , strategy , and capabilities – forms the sweet spot for unlocking new value and growth for a business . These lenses are inspired by design thinking , an approach to tackling business opportunities by integrating the needs of people , the possibilities of technology and capabilities of your business , and the strategic goals of that business .
People
For any new digital initiative to succeed , it must be adopted and used by people . When it comes to customers , this means asking : what are the pain points or unmet needs customers might have when it comes to interacting with or purchasing from a business ? Often , prioritising these areas for the first digital initiatives with the largest impact provides momentum for continuing the digital journey . Employees and partners can also benefit . For example , manual data entry tasks are burdensome and time consuming for employees . Targeting these areas with digital solutions has the added benefit of – over and above improving productivity – attracting and retaining digital natives and learning-hungry talent .
Strategy
One key is understanding how the costs of implementing and maintaining digital technology will compare to the benefits it will deliver . Prioritising initiatives that generate the most value – either cost savings or revenue optimisation – will create the most bang for your buck . Luckily , many digital technologies come with favourable cost factors , such as decreased maintenance , lower overheads , and reduced need for hardware . This makes the business case for digital technologies easier to make . The other factor to consider is whether the digital initiative drives the overall business strategy with greater speed , impact , or sustainability . If , for example , a key pillar of the company ’ s strategy is to increase market share , this can be a helpful decision-making criteria .
Capabilities
Of course , for digital technologies to work inside your business , they need to be able to perform the capabilities imagined . This applies to the technical feasibility of a digital solution , but also your organisation ’ s capacity to be able to sponsor , support and lead . Looking behind the scenes of successful digital transformation initiatives one notices key patterns in how the business provided the capacity to ensure the project was successful and smooth in its implementation . These include things like making a senior team member accountable for leading the initiative , ensuring other key team members are given supporting and consultative responsibilities , and identifying clear lines of communication concerning reporting and maintenance . In summary , digital transformation doesn ’ t have to be an overwhelming , abstract concept – it is rather a step by step process that involves understanding how the three lenses interact . By harnessing the resources at your disposal and buying into a compelling case for digitisation , the digital roadmap for any business can be rendered much clearer .
* Digital Transformation : A Playbook for Distributors www . epicor . com / BDebook