Why embedding digital in your DNA is a matter of survival for established businesses
It is no longer enough to rely on the “too big to fail” principle. In 1958, large companies could expect to stay in the Standard and Poor (S&P) stock index for more than half a century with little disruption from small companies. Over 60 years later, today, that has been drastically reduced to less than eighteen, and unsurprisingly, this trend of market instability is expected to continue. According to business consultant Innosight, three-quarters of companies currently listed on the S&P index will be replaced by 2027.
The rise of next-generation digital competitors and ever-changing market dynamics are contributing to this short life expectancy. Many mainstream brands are now under tremendous pressure to improve their operational agility in order to respond to the pressures at play. As a result, the integration of technology into the organizational infrastructure has become essential for survival, in particular. since the Covid-19 pandemic. Yet many large companies still rely on slow manual processes to manage their data, hampering their ability to adapt their business models and become more responsive. This is extremely risky at a time when efficient data management and process automation are at the heart of digital transformation.
Too big to fail?
Over the past decades, we’ve seen many high-profile cases of well-established brands leveraging their solid reputations and large operations to drive their business strategies. Yet this often ended in failure, with companies such as Toys R Us and the Borders bookstore chain falling off the market. Without a digital backbone to help them respond to changes in consumer behavior, it is difficult for these large companies to match the rapid response times of their “digital born” competitors. This was one of the factors that contributed to the demise of the travel giant, Thomas Cook. After failing to adapt to the new era of travel brought by online booking platforms and increased digital access, the company collapsed after 178 years in business. According to the chairman of its digital advisory board, the company lacked the capacity to move the business forward because it used “old” computer systems and a programming language dating back nearly seventy years.
The impact of the Covid-19 pandemic has also highlighted the growing urgency for businesses to have digital infrastructure to maintain their operations. A management consulting firm, McKinsey says the crisis has prompted many business leaders to accomplish in ten days what usually took them ten months by speeding up the speed of digital projects and processes. Companies that have not accelerated digital transformation have found themselves in an incredibly vulnerable position, forcing them to slow down or go out of business. Fashion retailer Primark, for example, has seen sales drop from £ 650million per month to zero. With the “new normal” here for the predictable, the need to adapt quickly to stay relevant forces companies to the ruthless prioritization necessary to drive a new level of focus.
While large organizations have used ERP systems for years to manage key processes, these recording systems and the data they contain must be connected to a larger digital infrastructure to increase business efficiency. But with an abundance of data to process and more and more data being created every day, it’s easier said than done. Why? Because a lot of companies don’t manage their data well. It is often held in multiple systems, comes from multiple sources, and exists in a variety of formats, creating difficult-to-access silos that make effective management of information nearly impossible. This is of concern as data is crucial for any digital transformation project. Not only does it contain key information about customers and suppliers, but it also allows businesses to visualize what is happening within the company, helps determine the cause of problems, and facilitates the decision-making process.
The importance of this data is often overlooked due to the weight of traditional business models and analog processes, with many companies still relying on slow and error-prone manual processes to manage their data. From finance to customer services, departments in the organization will spend a lot of time entering information into labor-intensive manual spreadsheets, which are then exchanged through email routes for review. and approval before they are re-entered into the ERP. This can lead to multiple versions of untracked files, making it difficult to know which version is the most up-to-date or trusted, increasing the risk of error and poor data quality.
Finally, the lack of emphasis on the interdependence of data and processes leads to inefficient data management which, in turn, makes it difficult for companies to react quickly enough to market changes.
Automation is the key to transformation
Younger, more nimble brands that already have digital ingrained in their DNA have been built around a data-driven infrastructure and are able to handle large volumes of data with ease, enabling them to secure this critical edge first on the market. While well-established brands typically have an abundance of historical data that is constrained by ancient systems, hampering their ability to effectively manage data. However, these systems and the data they contain cannot be simply thrown away and restarted. Instead, opting for a solution that combines business process automation with efficient data management will simultaneously improve operational agility and data quality. To do this, another class of software is required.
A flexible automation platform that can be implemented quickly with a minimum of programming and IT commitment is of great benefit, as companies can apply their own set of business rules to the data being processed. It should also offer an integrated centralized management solution that can help govern data, increasing visibility and eliminating the risk of errors. This means that the data files are not only managed centrally, but the workflows are also tracked to avoid bad data being entered into the ERP system. This, combined with the automation of key business processes, will ensure that data can be used effectively and efficiently to increase agility.
It’s clear that many mainstream brands are struggling in the digital age, and as we’ve seen over the past decade, failure to adapt dramatically reduces the likelihood of longevity. To survive, these established companies must digitally transform their business strategies using automated solutions to shape their data. It’s do or die!
Andrew Hayden, automation expert, Winshuttle