Digital transformation is the major business shift of our times. Like any radical overhaul of working practices, it is not without its pressure points.
Businesses in every sector and stage of development are tackling how best to ensure their platforms, processes, products, priorities and people are all on track to embrace a digital future. Leading the charge is a new type of executive: the Chief Transformation Officer.
Why now? A recent survey by Fujitsu found that almost 9 in 10 firms (89 per cent) are currently planning, testing or implementing digitalisation initiatives.
And the work is paying off. Fujitsu’s survey also found that more than a third of organisations are already enjoying the benefits of investments in digital transformation – including increased revenue and enhanced customer relationships.
With the capability of digital transformation to enhance competitiveness, it’s no surprise that International Data Corporation (IDC) estimates a $1.2 trillion spend worldwide on Digital Transformation Technologies by the end of this year – a 17.8 per cent increase on 2016. This spend must be overseen by someone.
Unsurprisingly in my opinion, IDC predicts more than half of all digital transformation spending in 2017 will go towards technologies that support operating model innovations, to make business operations more responsive and effective.
We are seeing first-hand the effects of digitising core business operations here at Tungsten Network. By transforming paper-based and labour-intensive invoicing to a digital, automated process, we are reducing friction in the supply chain and saving businesses hundreds of thousands. For a business that issues 10,000 invoices a year, potential savings amount to £59,400.
The importance of carefully managing transformation projects should not be underestimated. To ensure the success of those we work on, our clients are supported not only in the digitisation of invoices, but in onboarding suppliers and ensuring a smooth transition.
A successful transition to e-invoicing doesn’t happen overnight, and requires a huge amount of strategic thought. We know that businesses need to manage their investments carefully, and have access to data and analytics to demonstrate the impact of any digital transformation project.
A study from McKinsey supports this view, with a prediction that 70 per cent of transformation programmes fail. The two main reasons given for this failure are that management behaviour doesn’t support change and employees are resistant to it.
These reasons support the need for every organisation looking to digitise to employ a Chief Transformation Officer. Having a CTO can significantly improve the chances of a successful transformation, as we have seen repeatedly in e-invoicing projects.
From my experience, it is about having a figurehead to champion the purpose of transformation that makes the real difference. Someone to shout loudly and clearly about the benefits of change, and to doggedly demonstrate the competitive results it delivers.
What makes a successful CTO, then? Well, they may come from a wide range of backgrounds, but the skills they possess mean they have plenty in common.
Highly capable leaders, CTOs are adept at communicating fluently with multiple stakeholders as well as delivering results on the bottom line. They inspire employees, hold CEOs to account and make sure the end goal of any transformation project is constantly in sight, which leads to improved competitiveness.
The digital revolution is removing friction from business processes across the world. From our perspective as an e-invoicing provider, we see the difference it can bring, and by working in partnership with our clients we are delivering that change every day.
To find out more about how partnering with a market leader could transform your business by removing friction, view our Friction Index 2017 results at www.tungsten-network.com/procure-to-pay-friction/