The key role of the management team in a digital transformation
In this article, we explore why silo thinking is outdated and why end-to-end processes are of utmost importance. It is essential that the entire organization is aware of how the different parts interact.
As digitalization and technological innovation continue to reshape the landscape of corporate operating models and business objectives, the role of technology has gone from being an isolated function to becoming a central point in corporate strategies and daily operations. This paradigm shift from a silo-based mentality to an integrated, holistic approach has made it necessary for IT to become part of the company’s core processes.
In this article, we explore why silo thinking is outdated and why end-to-end processes are of utmost importance. It is essential that the entire organization is aware of how the different parts interact.
From silo mentality to a holistic perspective
In the 1990s, companies solved specific business problems by purchasing isolated systems such as ERP for production and CRM for sales. These solutions were project-based and often disconnected from the rest of the business, leading to siloed work and lack of ownership. These systems operated as small, separate businesses within the larger company, where valuable data was not shared across the organization.
This is no longer the case. Since 2018, for the first time, more Fortune 500 CEOs have engineering backgrounds than MBAs. The impact of technology is now palpable. Management teams must now have a deeper understanding of digital tools and how they impact both their own area of responsibility and the company’s overall ecosystem.
Technology is no longer seen as a mere cost item but as a critical element in the creation of added value. While old ways of working still have a firm grip on many corporate cultures, an organization-wide change is necessary to maximize the potential of IT and digitalization. But which mindset should be adopted?
Quick wins and value capture
In the overall digital transformation strategy, “Quick Wins” are critical. They contribute to immediate value creation and build confidence in the longer digital journey. They allow companies to solve some of their most urgent problems, providing immediate value and building confidence in the continuing transformation.
Striking a balance between long-term goals and short-term success is crucial. This applies not only to improving business profitability and efficiency, but also to ensuring that the entire organization is engaged and motivated on the journey towards a digital future.
Thinking end-to-end
It is the mission of the management team to view digitalization from an end-to-end perspective, which means understanding how digital solutions and systems can help achieve the company’s business goals. It is about unifying existing silos and creating a flow between them so that the entire organization works towards common goals. The most forward-thinking companies recognize the impact of digitalization on their entire business and working practices, and they apply a holistic approach that is aligned with their business objectives.
Punctuality of bus drivers
As an example of an end-to-end process, we can look at how to improve the punctuality of bus drivers:
Step 1: Collect information on punctuality problems and relate it to business objectives such as customer satisfaction.
Step 2: Prioritize the most impactful punctuality problems to solve first. You cannot run for all “problems” at the same time.
Step 3: Develop strategies, including direct work with drivers and data-driven training.
Step 4: Analyze KPIs to measure progress towards more efficient and automated processes.
Step 5: Implement measures and train drivers to change behavior and improve punctuality.
Step 6: Continue to monitor and improve measures to sustain behavioral changes and achieve punctuality targets.
This process helps solve current problems and builds a foundation for continued improvement and positive change in the business. The goal is not reached when you have new insights delivered to you, but rather the goal is to use digital means and systems to bring about a change in behavior. Linked to set business goals that have a positive impact on the company and their employees.
Getting the whole organization on board is key to the success of your digital initiatives. Business goals need to be grounded throughout the organization so everyone understands the value of what the end result is, and how to get there. It can take several years to reach your goal with a digitalization, so it is important that the entire organization is involved in the change that is taking place.
Summary
By moving away from silos and opening their eyes to how end-to-end enables digitalization, companies can not only optimize their internal processes, but also strengthen their position in the market. This journey requires perseverance and commitment at all levels of the organization. Management teams today must take greater responsibility for the organization’s digital transformation. It is no longer just an issue for the CIO; it is an issue for all leaders. Success lies in being able to adapt, act quickly on quick wins and steadily work towards a fusion of business goals and technological innovation. Finally, companies that understand that digital transformation is a continuous process, rather than an end goal, will have the edge.
