Digital transformation: What it is and how to capitalize

Digital transformation: What it is and how to capitalize

Digital transformation has been at the center of many business strategies throughout the past several years. Organizations are creating, storing, sharing and analyzing information through a wider range of technologies - and at much higher volumes - than ever before, making them more reliant upon the digital tools in place. Companies that do not embrace digital transformation in the near future might end up struggling to remain relevant in their marketplaces. 

As such, let's discuss digital transformation more deeply, and work to understand what steps need to be taken to achieve a successful overhaul of traditional business processes and operations. 

Digital transformation is taking the business world by storm. Digital transformation is taking the business world by storm.

Core values
The Massachusetts Institute of Technology's Sloan School of Management published a piece on its blog that outlined what it sees as the more vital elements of digital transformation, breaking them down into three umbrella categories. The post, which was written by George Westerman, Didier Bonnet and Andrew McAfee, pointed out that organizations in virtually every industry need to be at least aware of the impacts this trend will have, but more so must face it head on to capitalize on its myriad advantages. 

Here is the breakdown the authors offer:

  • Customer relationship: The authors argue that companies must comprehend the desires, preferences and other attributes of their customers, then transform experiences through digital management and communications technologies that push interactions further into the self-service arena. 
  • Business processes: For this category, companies need to focus on leveraging more advanced workforce, performance and process management solutions that better enable employees while giving managers and leaders a more efficient and transparent view of all the moving parts in each department. 
  • Models and tasks: Finally, the three authors stated that the above efforts will only work out optimally when the company has made significant changes to its business models. It is worth noting there that the most digitally mature firms will have digitized existing business models, while also seeking out new online and international opportunities as well.

Not all organizations will need to cover everything above, but the business process digitization element is increasingly vital regardless of the industry or size of a firm. A great place to begin these efforts is the accounting department.

Transformation in the accounting department
ICAS published a blog post from Nick Huber, who outlined some of the key ways in which digital transformation is impacting accountants and accounting departments around the globe. Not surprisingly, the author began with cloud computing technology, which has been widely used in efforts to shift away from paper-based processes and toward wholly digital workflows. 

Cloud-based management tools often come with lower upfront costs and much stronger interoperability with other systems, meaning that the transformation can take place without putting immense financial strain on the organization involved. Huber also pointed to automation software as something that has truly benefited companies with respect to tax management and reporting, as well as transaction monitoring and other key components of accounting. 

Finally, the accounting arena is beginning to benefit from mobile technology as well, as the author pointed out that many different service providers and solutions vendors have adapted to demands that call for mobile access to the tools and relevant data. A truly digitized accounting department will tend to enjoy lower risk, greater efficiency and more consistent and predictable cashflow. Those advantages will in turn fuel a well-oiled machine across other departments. 

"Document management is critical in digital transformation."

Expanding out
As companies become more comfortable with these digital management technologies, they will often spread the programs out to cover a wider range of processes, tasks and functions. When doing so, they will need to focus on their document management systems, ensuring that all of the pieces of software are working in concert. Because many of these projects involve the cloud, managers and leaders must know the general best practices involved. 

The Nonprofit Technology Network explained that even the more basic elements of document management will need to be tweaked when migrating into the cloud and working to unify complex software environments. For example, the organization stated that matters like folder structure and sharing must be adjusted to account for the differences between a cloud-based storage framework and one based in a legacy system. Sharing is a particularly important aspect here, and NTEN affirmed that policies must balance ease of access with control and security. 

To do so, the group suggested focusing on the development of a tight, informed and seamless archiving strategy, then connecting that to standardized folder and file categorization models. This keeps all of the information across a business standardized, and channels of communication fluid for optimal user experiences. When document management strategies are transformed within the company's pursuit of digital operations, the firm will be better-positioned to truly capitalize on modern opportunities. 

Orchestration is key
There are many moving parts involved in digital transformation. Regardless of the size or scope of an organization, it will need assurance that the digital transformation project is being orchestrated properly, and that the plan's execution is likewise tight and consistent. Because many businesses do not have large IT departments staffed with individuals who have tackled these projects before, managed services firms are playing an active role in this shift into the future. 

In November, International Data Corporation's Digital Transformation lead Bob Parker estimated that about $18 trillion will be generated by digital transformation projects in the coming years, and that means leaders in each organization need to be highly active in planning and execution every step of the way. However, having the right support and guidance will be equally critical, which is why experienced managed services firms can come with so much value. 

To learn how PaperSave can help your business capture, integrate and automate your business processes, feel free to watch our personalized demonstration or visit our case studies page to read about our clients' success stories.