how to get it right
No company which wants to remain relevant can avoid digitalisation, whether by a disruptive change or step by step. You need to digitise your organisation, the way you communicate, your processes and potentially even your product. So how do you make sure you approach all this properly and avoid the many pitfalls? If you take an integrated approach, you will have the best chance of success.
Organisations must embrace technological developments and transform their operations. Even today, it is obvious how vital this is: the longer you wait, the greater the likelihood that your competitors or new start-ups will outperform you. Digital entrepreneurship will help you find new products and services, other markets and fresh sources of income, say BDO’s specialists David Bos and Kees Plas.
What other opportunities does digital transformation offer?
David Bos: ‘Sharper strategies and ways of working can make your business processes cheaper, more efficient and more customer-centric. These processes are all closely interconnected, so digitising one will have a direct impact on the others. They all have to be incorporated into one master plan, to achieve a successful and balanced transformation.’
Could you give an example?
Kees Plas: ‘Take the implementation of an enterprise resource planning system. That affects more than just IT. It also impacts other aspects of your organisation. Staff have to learn to deal with the new system, customers will notice that they are being served more quickly and the finance department will look at the return on the investment in ERP. The key to success in any digital transformation process is an integrated and coordinated approach.’
Is this coordinated approach difficult to take in practice, particularly in larger organisations?
Plas: ‘Compartmentalisation certainly forms an obstacle in many enterprises, with everyone doing their own thing. This often results in an operational and IT-driven approach, without a vision or a business case.’
What further risks do you see?
Bos: ‘The risks are diverse: cyber threats, compliance with new laws on privacy and intellectual property, over-investment, and staff who lack the skills, management and leadership to make the switch. So we never lose sight of the risks when we are helping a company go through this process.’
How should you begin with this integrated approach?
Bos: ‘We work with the ‘BDO 360° framework for digital transformation’ (see page 39). This makes clear the relevant processes within an organisation. We believe the digital transformation of an organisation is based around three phases of development. The first includes five focus areas: clients, staff, IT, finance and the portfolio of products and services. The second phase focuses on the digital maturity of each of these areas and the third deals with the level of execution: senior management, directing the digital transformation; middle management developing the tactics and the shop floor carrying out the operational side.’
is partner at BDO Advisory and a technology leader. He worked previously for Deloitte and has years of experience in technology and digital transformation.
‘Never lose sight of the risks during digital transformation. They are diverse’
Can you explain more about stages of digital maturity?
Plas: ‘In what we call the first ‘traditional’ transformation stage, the organisation uses IT to support the business rather than advance it. In the second ‘modern’ phase, the organisation has a more structured approach to digital initiatives and processes. IT still has a supporting role but is closely intertwined with business processes. In the third ‘future-proof’ stage, the organisation is information-driven, with an integral, digital approach to operations. Everyone working there is aware of the added value technology can bring and IT stimulates business.’
How do you use the BDO 360° framework?
Bos: ‘We use this model in two ways: as a snapshot to see where an organisation is in terms of its digital transformation and as a tool to make it clear that if you change one element, it will have an impact on others. In other words, we show that you need to look at the whole picture and take an integrated approach. This makes the likelihood of success that much bigger and helps raise the discussion about the digital transformation to a higher level.’
How does it work in practice?
Bos: ‘If we advise a company about its digital transformation, we first sit round the table with managers to look at what their digital strategy actually is and should be. How do we formulate their long-term goal? We look at the tactical and operational interpretation of this strategy by organising five workshops based on the five focus areas: finance, IT, clients, staff and the portfolio of products and services. We assess whether each of these focus areas is in the traditional, modern or future-proof stage of digital transformation. We do this together with members of staff because they have knowledge no one else has and because their involvement strengthens the transformation process. Where necessary, we organise best practice sessions where our client can check out case studies at other organisations which are going digital.’
is partner at BDO Advisory and responsible for managed cyber services. Prior to this he worked for Deloitte and BT, and advised companies on technological adaptation.
‘The key to success lies in an integrated and well-coordinated approach’
And after the five workshops?
Plas: ‘After these five workshops, we draw up an action plan which outlines tactics to realise each focus area’s strategic aims, and the way to a future-proof firm. Our action plan also includes operational implementation – what tools are needed to reach the target and how should they be used? We do this per focus area but always from an integrated perspective. When we are working on ‘IT’, for example, we might propose more up-to-date software in the cloud to meet the online strategy, while in the ‘staffing’ section we would outline training needs and the impact on work processes, and under ‘finance’ we would show implications for the business model. It’s not about vague management jargon: it’s super practical. In other words, we can show what you have to do, when, how much it will cost and the time scale. And above all, what both the staff and clients will notice.’
Do you do everything yourselves?
Bos: ‘No. To supplement the expertise of our technology consultants, when necessary – think finance or HR – we will bring in a BDO specialist or a trusted partner from an outside organisation. This means we always have control and oversight, and a continued focus on the future. The entire discovery process, which we walk through with the client, typically takes about three months. But if necessary, it can be done more quickly or in stages, for example if a client wants to start with one focus area. But we will continue to emphasise that the other four focus areas are interlinked.’