While it’s important for business leaders to focus on the operational and cultural aspects of a planned transformation, selecting and implementing the most appropriate new IT will, in most cases, be central to the whole exercise.
Andrew Rivers is a co-founder and director of the 345 Technology consultancy. He observes that “transformations are continually evolving and so is their underlying technology. They often seem like a gargantuan task, but a chief information officer can, by breaking down functional elements into smaller tasks that use proven technologies, create a clear ‘roadmap’. This will help their organisation to overcome the fear that can stifle big projects.”
Rivers and other experts in the field consider the following five technologies to be the most crucial to the success of a transformation.
1. Cloud services
The cloud is probably still the single most important technology in a transformation. The global market for public cloud services will be worth more than £650bn by 2025, according to a recent estimate by Cision.
This technology is crucial, Rivers says, because it has made large-scale transformation projects feasible for smaller organisations by making the entire process more cost-effective. In addition, cloud platforms increase storage capabilities and provide broad coverage with low latency and high speed. As a result, they have made it easier than ever for medium-sized companies to deploy effective networking, storage and data centres.
“Traditionally, if you wanted to move a process online, you needed to provision for peak capacity So, if you were processing a million direct-debit transactions in three hours on the first day of each month, say, you would need that capacity for the whole month,” he explains. “What the cloud does is enable you to scale up your resources quickly, allowing the whole process to become more accessible and cost-effective.”
2. Enterprise resource planning software
The chances are that your company already has an ERP system, so why is it so important in digital transformations in 2022?
It has become a high priority because many organisations are working with ageing ERP systems that they have customised extensively over many years, according to Ola Chowning, a partner at global tech research firm ISG.
“This makes any sort of meaningful upgrade almost impossible. What’s more, the chances are that your business model and channels have changed and become more distributed since you implemented that system,” she says.
Organisations are using ERP systems such as Microsoft Dynamics 365 Business Central to help create a “single version of the truth”, adds Dean Carroll, general manager of the Xpedition consultancy.
“Ultimately, businesses want to reach a point where they have unified data. That’s a critical measure of success for a transformation project,” he explains. “ERP systems can provide reliable data that enables organisations to make better choices about sales and revenue transformations, for example.”
3. Customer relationship management platforms
The ultimate goal of many transformation projects is to improve the customer experience, which renders CRM a crucial technology, Carroll says.
Xpedition’s clients are “prioritising CRM and ERP systems because these help to improve the customer experience and manage the margin squeeze” that many firms have experienced since the unwelcome return of high inflation to the UK.
CRM platforms enable their users to anticipate “the next action”. For example, in financial services it’s crucial to know what has been done with a given account, how that account compares with others and what is most likely to benefit the holder, he says, adding: “Customer information systems are critical in conferring the ability to offer customers the best possible digital services.”
4. Data lakes
One of the most exciting recent developments in digital tech has been the emergence of AI systems such as machine learning and deep learning. These have the potential to help an organisation to sift through the enormous volume of raw data at its disposal and extract useful insights that could grant it a competitive edge.
But Rivers points out that this is possible only if an organisation understands what data it has and can bring that material together to be analysed. The good news is that advances in cloud storage have made it possible to stockpile vast quantities at a relatively low cost.
“We’re at a point where we’re talking about pennies to store terabytes of data, so you’ve been granted the ability to bring data together into lakes, where it is accessible to AI-based analytics tools,” Rivers says.
His firm recently helped a mining company to implement a lake holding data shared by mechanical devices around the world. By analysing this material using processes built into Microsoft’s Azure Data Factory, the company has been able to predict with greater accuracy when its equipment is likely to need repairs.
“Being able to choose when to turn off an appliance rather than waiting for something to break represents a huge cost saving to that business,” he says.
5. HR management tools
While ERP, CRM and AI-based data-crunching technologies are pivotal in meeting the needs of a company’s clientele, it’s equally important to focus on the employee experience. HR management software can serve as a valuable transformation tool by tracking employees’ roles and identifying skills gaps as new processes are implemented.
These systems can also engender stronger teamwork during transformations, according to Chowning. Applications such as Basecamp, Trello, Asana and Monday.com can improve cooperation within and between teams, while helping project managers to keep everything on track.
“If you can put technologies in place that strengthen the experience of employees, you’ll have a strong core platform to deliver a transformation,” she says. “Alongside conventional HR platforms, this means investing in employee enablement tools.”
Ultimately, choosing the right technology for a transformation hinges on what exactly needs to be changed.
“Are you seeking to get closer to consumers, transform the supply chain for greater resilience or automate tasks in manufacturing for better efficiency? There will never be a one-size-fits-all solution,” Chowning says. “Organisations must choose their tech based on what will enable the business results they’re after. These – and the technologies needed to deliver them – are going to continue evolving over time.”