It’s not a question of pulling the plug, but of building out

Digital transformation was already under way in the face of an explosion of data, so firms don’t have to start from scratch

Edward Abrahamson, principal consultant, Lumenia: Digital transformation doesn’t have to mean implementing a lot of expensive technology

Digital transformation has now been on the cards for many organisations for some years, but the thought of ripping every system out and starting again is a daunting one. Happily, however, such scorched earth tactics are rarely the right approach.

The reality is that most organisations are not starting from a blank page, said Edward Abrahamson, principal consultant at independent ERP and digital transformation consultants Lumenia.

“They already have some systems. Invariably their business is growing and, as it does so, the systems that they have don’t necessarily scale to meet their evolving business needs. Another common scenario is that they end up with fragmentation of systems and data due to acquisitions,” he said.

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Why it is in the news: Lumenia is bringing its experience with enterprise software consulting to bear on digital transformation

New technology, including artificial intelligence (AI), offers a lot of promise, Abrahamson said, but it also means that data becomes even more important and managing it becomes more complex.

“The reality is that organisations are generating, and having to store, more and more data. AI ultimately relies on being able to interpret that data. Whether it’s about generating production plans or providing automated customer support, it all requires the ability to access reliable data quickly.”

As a result, organisations need to think about overcoming data silos and ensuring that their data is actually useful.

“One of the most underestimated aspects of any IT project is data migration: the extraction from sources, cleansing, mapping and loading into target systems. Companies can find themselves having to spend months on this,” Abrahamson said.

Assess and plan

Key systems organisations rely on, such as Enterprise Resource Planning (ERP), Customer Relationship |Management (CRM), Human Capital Management (HCM), finance and procurement, are all both sources and users of data. As a result, the first step in any digital transformation is to assess what systems a business has and what outcome its leaders want from change.

This is where Lumenia comes in, as its vendor-neutral approach allows for thorough analysis.

“This means looking at your current technical landscape, looking at your existing business systems and gaps, your business needs and strategy, and your people, IT governance, and business processes, and identifying where there are maturity and capability gaps. Then, you can do cost benefit analyses to target the strongest improvement opportunities,” Abrahamson said.

“A lot of what we do is work with clients to facilitate structured technology selection processes. Part of that is helping them to elicit and document their requirements and to create tender packs to send out and then interpret what vendors respond with.”

Abrahamson said it would be a simplification to say every business needs to transform. Nevertheless, the way we expect to interact with organisations is changing and changing quite rapidly.

“It doesn’t have to mean implementing a lot of expensive technology, but it does mean surveying what they have as a starting point. In some cases, changes could be as simple as augmenting the website with a chatbot,” he said.

Digital transformation doesn't have to mean implementing a lot of expensive technology, but it does mean surveying what they have

Driving this was a shift in consumer behaviour, with demand for self-service particularly high among those under 40 and, as a result, something more and more organisations need to grapple with.

“Younger generations, increasingly, don’t like to make phone calls; they don’t even like to answer their phones. They expect to be able to log in and interact online,” Abrahamson said.

In addition, driven by experience of the straightforward e-commerce of the likes of Amazon, these online experiences need to meet a high bar as tolerance for friction is dropping.

“Whether you use the term digital transformation or not, really it’s about understanding how you can and should leverage technology to support what you do as a business – to help you succeed.”