DIGITALIZATION & AUTOMATION
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“ You cannot endow even the best machine with initiative.” — Walter Lippmann.
Decoding Digitalization & Automation: More Than Just Buzzwords
First published on: March 17, 2021
"Digitalization means the use of digital technologies and of data (digitized and natively digital) in order to create revenue, improve business, and replace/transform business processes…"
While automation zeroes in on making routine tasks run themselves, the terms digitalization and automation have become the darlings of the business world. They're practically a mandatory mention in any senior or middle manager's KPIs. It seems everyone wants a piece of this technological pie, much like the excitement surrounding a new, intriguing neighbor.
Remember the "Omni Channel" craze? Well, digitalization and automation feel like the new "it" thing. But from my vantage point, witnessing various organizations' tech journeys, I can confidently say that a significant portion of those clamoring for digitalization and automation haven't truly defined what they're after. The driving force often seems to be the fear of being left behind, rather than a well-thought-out strategic imperative.
Before you embark on this potentially transformative journey, it's essential to internalize a few fundamental principles that can make the difference between success and a costly misstep.
Rule #1: Begin with the End in Mind - What's Your "Why"?
What tangible outcomes are you hoping to achieve by diving into the world of digital transformation and automation?
Will it tangibly improve your bottom line by minimizing errors and reducing financial losses?
Is the goal to lighten the load for your valuable employees, freeing them up for more strategic tasks?
Or are you aiming to carve out a new niche in the market and unlock fresh revenue streams?
As a business, the very first step should be to clearly articulate your objectives and then assess whether digitalization or automation is the right vehicle to get you there.
Surprisingly, many organizations skip this crucial step. They get swept up in the allure of a particular technology and then try to force-fit it into their existing processes – often with painful results.
Take the example of WhatsApp. It's a fantastic communication tool. However, we often see companies rushing to adopt it without first considering how it can genuinely benefit their specific business needs. This "technology-first" approach, often fueled by persuasive sales pitches, leads to the "use" case becoming an afterthought, resulting in wasted investment and poor integration into core business processes.
Remember this: Digitalization and automation are the means to an end, not the other way around.
Rule #2: Don't Assume Your Customers Crave Digitalization
Businesses often rationalize their digital push with the argument, "Why wouldn't customers want this? It's so much easier and better!" It's easy to fall into the trap of projecting your own preferences onto your customer base.
Consider a brand like Rolls Royce, where a single vehicle costs more than some people's entire retirement savings. What if Rolls Royce decided to fully digitalize and automate its production? What if machines took over the meticulous craftsmanship? Would the cars retain the same allure? Would customers still be willing to pay such a premium?
Similarly, digitizing a form for a customer base predominantly composed of baby boomers who struggle with technology might not be a wise move. It could inadvertently alienate a significant portion of your audience.
This isn't a call to resist technological progress. Instead, it's a plea to avoid losing the essence of what makes your business unique by blindly adopting a technology that doesn't enhance your core value proposition.
Know your customers. Understand what they truly value from your brand.
Rule #3: Strategy Eats Technology for Breakfast
Organizations can invest in building cutting-edge digital or automation platforms. However, they frequently stumble due to the absence of a clear execution strategy. Human beings are creatures of habit. We rarely change our established ways of doing things unless there's a compelling reason – an incentive or a deterrent. In a customer experience context, incentives almost always yield better results.
Consider incorporating a small additional discount for customers who utilize the new digital platform, or perhaps offering shopping vouchers or reward points. These motivational elements should be factored into your project budgets from the outset to ensure a successful and rapid adoption.
Rule #4: The Reluctant Custodian - Systems Need Love Too
Just like any valuable asset, digital systems lose their luster if they aren't properly maintained. Customer-facing systems, in particular, require consistent updates and accurate information to prevent confusion and frustration.
A common pitfall is developing systems without clear post-deployment guidelines, often leading to the IT department inheriting the responsibility for upkeep. However, IT, being primarily focused on infrastructure, may lack the operational context to determine what information should or shouldn't be present. This is where the decay begins.
A prime example is chatbots. Significant effort is often invested in their initial launch, with meticulous attention to detail. Yet, once deployed, they can quickly depreciate like a new car driving off the lot. This is because the necessary resources (both financial and human) haven't been allocated for ongoing maintenance. The result? Customers lose trust in the system, leading to its eventual disuse and its transformation into a glorified "white elephant."
To prevent this, assign a clear owner for each digital process or system. Establish clear KPIs for their upkeep. This proactive approach will significantly slow down the inevitable "rot."
Rule #5: Don't Just Digitize the Mud - Review Your Processes First
We're all guilty of this. When it comes to digitalization and automation, there's a tendency to take an existing manual process and simply overlay it with a digital interface. Rarely do we pause to consider if certain steps can be streamlined or even eliminated entirely. This "blinders-on" approach, born from years of ingrained habits, prevents us from seeing potential efficiencies.
It's incredibly beneficial to take a step back and re-examine your processes "box by box" with a fresh pair of eyes. You might be surprised at the opportunities for simplification and optimization that emerge.
The Bottom Line: One Size Doesn't Fit All
When it comes to digitalization, there's no universal blueprint for success. Each organization is unique, with its own set of challenges and a distinct customer base. What works wonders for one company might be a complete flop for another.
Before you embark on any digital transformation initiative, take the time to deeply understand your business, your customers, and your long-term aspirations. Resist the seductive call of the latest tech trends and, most importantly, avoid the trap of believing that digitalization or automation is the magic bullet for every business challenge. Sometimes, the human touch, that personal connection, is precisely what your business needs to thrive.