This is the third article in our series, “The Human Side of Modernization.” This blog will explain what companies generally get wrong about digital transformation and why we advise companies to hire, dedicate, or contract experienced, business-savvy EDI and integration resources to ensure success with digital transformations. You can find links to the first two installments in the series at the end of this article.
The digital transformation journey often begins with implementing a new ERP. This process can consume IT’s resources and attention for months or years and, if well managed and planned, can help ensure a company’s success and even survival. At the same time, most digital transformations don’t pan out well.
According to McKinsey 70% of all digital transformations fail to reach their goals, usually because the business fails to approach digital transformations holistically.
In our work, we’ve seen what happens when companies overlook the need to dedicate internal staff, or contract with qualified EDI and B2B integration specialists, to upgrade these systems at the same time they implement their new ERP.
That’s a strategic mistake that can lose companies valuable time in fast-changing markets, put significant tech investments at risk, and make it easier for competitors to poach customers.
What is Digital Transformation?
Digital transformation is more than migrating your on-premises ERP to the cloud or using digital tools to support traditional ways of doing business. For example, say you’re a regional auto parts distributor with an online parts catalogue that’s connected to a purchasing portal.
Using some digital tools may be getting you more orders, but if you’re still logging POs and sending invoices by hand to process them, unnecessary delays and unproductive busy work will keep dragging on efficiency and profitability.
Digital transformation is a strategic repositioning of almost every facet of a company’s business in today’s digital economy.
Whether the company caters to consumer or B2B markets, the goal of digital transformation aims to make it easy for companies to deliver convenience, transparency, and simplicity.
How Does EDI Play Into Digital Transformation?
EDI is the original eCommerce technology. EDI and the revenue transactions it processes represent the lifeblood of most businesses that operate at scale. EDI accounts for more than 78% of all B2B electronic transactions and seven trillion dollars in annual sales. Organizations of all sizes in all industries trust EDI for secure technology accepted standards format, and because it drastically reduces the errors and costs of manual transactions.
EDI solutions streamline transactions because they send and process order to cash information as fed directly from the ERP. While it’s more efficient and prudent to combine ERP and EDI upgrades into one move, many companies treat EDI and ERP integration as an afterthought.
To be fair, EDI is easy to overlook in the planning stages because it rarely breaks. Another factor challenging successful digital transformation in today’s tight IT talent market is access to qualified talent, especially those who specialized in integration systems and disciplines.
What Does a Successful Digital Transformation Look Like?
Often companies will work with a managed integration services partner to engage niche specialists for digital transformation, leaving in-house resources to focus on core priorities such as maintaining security and supporting users.
With the amount of time and budget digital transformations consume, the bar for success includes, but is not limited to, being delivered on time and reasonably within budget. Working with experienced partners, especially in the early stages of planning, can help companies increase their odds of seeing a range of successful outcomes, including:
- Improved user experience for customers, trading partners, and employees
- Improved ability to scale
- Increased efficiency
- Enhanced agility
- Visibility and to access real-time data
An April 2020 Oxford Economic study revealed that almost half of small and medium-sized businesses reported that they have the process and operational visibility they need to serve customers, retain and engage employees, and maintain trading partner relationships.
So two years in, it’s not surprising that global business data platform Statista projects company investments for 2022 in digital transformation to rise to 1.8 trillion dollars.
While it’s critical for small and medium-sized businesses to invest in digital transformations like ERP and EDI upgrades to succeed in the digital economy, technology isn’t a magic bullet.
Without a transformational mindset— one that includes qualified specialists to help plan, test, and train others in the inevitable new processes and protocols— digital transformations may do more harm than relying on legacy technology.
Other articles in this series:
Why Soft Skills Are Now Core Skills For IT
Empathy: The Secret Weapon of Effective IT Leaders
