A Digital Transformation reality check
Every other keynote speech seems to push us towards Digital Transformation, but is it a place we really need to go?
Is it just us, or have you also found it hard to attend a business conference lately without keynote speakers preaching the gospel of “Digital Transformation”, or the benefits of “Going Digital”?
This month we’ve decided to peek under the bonnet of these concepts.
To go full throttle on the automotive analogy, how should you approach the next scheduled service for your IT and accounting systems?
- Could you retain the chassis but replace the engine?
- Should you cut your losses and swap the old gas guzzler for a shiny new EV?
- Or might a tune-up, some LED headlights, and a digital sound system suffice?
Let’s do some jargon busting and ask how relevant these concepts are to Orchid’s customers and audience. We’ll start with…
True “Born Digital” companies didn’t just start operation during the digital age. They had it in their DNA from the moment of conception, with a single-minded focus to leverage internet-based software that would give them a competitive advantage over incumbents. If the software didn’t exist, they would create it. Some used these new tools to create brand new markets.
Mega-brands like Uber and Airbnb, Amazon and Alphabet, became the flag-bearers for this ‘age of the disruptor’, but countless businesses small and large have been ‘born digital’. Some have flamed out on the launch pad, but many others have found ways to prosper in this brave new world.
- Advantages can include speed to market, agility, lean cost bases, self-service sales and service models, and built-in scalability.
- Challenges can include governance and risk management, particularly in times of rapid growth. (The social media behemoths provide some obvious examples.)
If your business is Born Digital it’s a safe bet that you are already using a cloud-native accounting package, perhaps Sage Intacct.
That might place you in our “I bought an EV as soon as I started driving” box, but it doesn’t mean you aren’t in the market for some shiny accessories.
Take a look at Orchid’s EFT Processing for Sage Intacct, and put your payments and receipts processing into digital overdrive.
Take your pick of definitions for Digital Transformation, but a concise starting point is:
Using technology to reshape and modernize every aspect of an organization to stay competitive and relevant in today's digital age.
I see this as a natural - and often desperate - response of traditional/legacy companies to the disruption caused by ‘born digital’ competitors invading their personal space. Take note of the reference to "every aspect of an organization”. To elaborate:
Digital transformation goes beyond just adopting digital tools. It encompasses a fundamental change in the organization's mindset, processes, and strategies.
Think of it as an attempt by that organization to transplant its own vital organs, and edit its own DNA, while running on a treadmill. For a large enterprise, a true transformation is likely to require a huge degree of commitment, a very significant investment, and more than a little ingenuity to keep its customers satisfied and the cash flowing while the project runs its course.
It will surprise no one that this is usually a long, painful, expensive exercise that frequently doesn’t end well.
A traditional car manufacturer might be able to stuff a battery pack and electric motor under the bonnet and call it an EV, but that won’t transform it into the next Tesla.
Replacing your accounting system while keeping the rest of your business essentially unchanged might be possible. It might even be sensible. Just don’t call it a Digital Transformation!
The term Going Digital doesn’t look very impressive on a conference agenda, so perhaps we should dress it up a bit. We could call it Digital Incrementalism. A working definition:
A more limited and incremental shift towards using digital tools to replace traditional analog processes.
Think of it as a journey rather than a destination. A road trip where you can stop for a while, take stock of how far you’ve come, and enjoy where you are while mapping out where to go next.
Going Digital can mean resisting the lure of ‘cloud native’ if ‘cloud enabled’ can deliver many of the benefits with less cost and less trauma.
For mature organizations that have invested a lot in making their on-premises financial software precisely fit their business needs, this might be less transformative, but more realistic.
The large and loyal base of companies using Sage 300 is a case in point, as I highlighted in the closing remarks of our recent article about the Top 100 VARs, and reiterate here:
Commonly available tools like VPNs and RDP clients open the door to the cloud. Add carefully chosen 3rd Party products that support remote communication, collaboration, and document sharing, and you’ve effectively transformed into a cloud-enabled operation through evolution rather than revolution.
Orchid Systems is proud to be an established part of the Sage Add-on ecosystem that lets users stick with the systems and features they know, trust, and rely on while responding to changing needs and a changing world.
The continued success of Orchid products like Document Management Link, Extender, and EFT Processing, is a testament to this. We say it again, “Viva la Evolution!”