For many businesses, 2020 has been the year that has forced them to innovate and implement digital technologies in their business systems and operations. And while digital transformation projects can be challenging, the typical payoff period far outweighs the ongoing inefficiency and risk associated with legacy systems and processes.
While the benefits of digital transformation are promising, it’s often challenging for businesses to implement, especially when it’s unclear where to start. In this article, we take a look at the areas that businesses need to focus on for digital transformation in 2020 and the years ahead, and how to successfully implement these changes.
Has your business weighed up the payoff time versus the cost of inefficiencies?
A report authored by e-invoicing expert Bruno Koch found that around 90 per cent of large companies in developed countries are “meanwhile users” of e-invoicing systems. For small and medium businesses in Australia, 90 per cent of these organisations are still using paper invoicing processes and systems. Although the report doesn’t define “meanwhile users”, it highlights that, in any case, inconsistencies in the way invoices are processed results in inefficiencies.
E-invoicing is one of many areas where businesses need to focus their digital transformation efforts for a range of benefits, including reduced operating costs. It is, for example, estimated that it costs a business $30.87 to process a paper invoice, $27.67 to process a PDF invoice and $9.18 to process an e-invoice. Costs aside, a good e-invoicing system offers a range of benefits, including a real-time view of cash flow. It is, however, important to recognise that while establishing an e-invoicing system might be a step in the right direction, it doesn’t address other underlying payment issues.
Where should a business start with digital transformation?
When a business thinks about how it can make its systems and processes more efficient, specific products may come to mind. Your business may be interested in moving its accounting program to a cloud-based system, or you may develop a new online portal for your wholesale customers. These moves all help with realising efficiencies in your business, but you need to think more broadly to ensure that digital transformation is integrated properly across the business.
According to a recent piece by Deloitte outlining its findings from their 2019 digital transformation survey, businesses need to make seven “digital pivots” to maximise benefits and efficiencies. These digital pivots are:
- Flexible, secure infrastructure that has a balance of security and privacy measures while allowing the business to adjust its needs according to demand.
- Data mastery which allows businesses to integrate siloed data systems.
- Digitally savvy, open talent networks to imbed the right technology skills internally while having access to specialist skills as needed.
- Ecosystem engagement which involves partnering with specialist technology businesses to improve the business’s digital systems and processes continually.
- Intelligent workflows continuously working on processes to deliver further efficiencies and allowing people to focus on high-value activities.
- Unified customer experience that provides people with a seamless experience as they interact with every part of the business, ensuring digital and human interactions are positive.
- Business model adaptability to pivot based on changing market conditions, allowing the business to change quickly, add or remove revenue streams to strengthen profitability.
By thinking about digital transformation in a broader sense, and understanding how your various systems need to “speak” to each other, you begin to strengthen the business and realise benefits over the long-term.
Successfully managing your business’s digital transformation
The technical aspects of digital transformation are only one area of challenge in these projects. For many businesses, the change and people management component is often the biggest roadblock and what needs to be addressed to make digital transformation a success. Your business will need to think about the project management methodology it adopts. This methodology may include the waterfall method if you know your project is going to have a clear, linear process. In contrast, you may implement the agile methodology if your project has several moving parts that are difficult to define.
As you begin implementing change in your business, you need to get the right people on board to support your strategic and operational direction. While the number of people you involve will differ based on the size of your business, you need to ensure employees from across the business can test your solutions and provide input along the way. This ongoing input will lead to more collaborative and successful integration of these systems and processes in your business for the long term.
For example, according to Koch’s report, e-invoicing transformation projects typically have a payback period of six to 18 months. If projects of this nature can be successfully coordinated with other areas of your business, this payback period can be closer to six months.
The key success factor in digitising your business
As outlined above, thinking about digital transformation in a broad sense before implementing specific, siloed tools will ensure your business is successful in realising the strategic and operational benefits of technology. While your business may need different tools and products for certain activities, you still need one central platform where data from these tools can be integrated to drive stronger business results and a better experience for your customers — this is what Spenda provides.
Spenda: Your partner in digital transformation
Not only can Spenda help your business improve its cash flow and get paid faster, but we provide a suite of products that ensures all of your systems integrate seamlessly. This means the end of entering data two, sometimes three, times in your various databases. And it also means your customers and suppliers alike have access to an intuitive platform which makes processing orders a breeze. As a result, your customers understand exactly what they need and when, and you do as well.
Spenda empowers businesses with the platform they need to eliminate the costs associated with outdated payment systems and workflows, data errors and poor warehousing systems. With real-time data from across your business at your fingertips, you and your customers can manage the commercial realities of business anywhere, anytime.