September 8, 2021
September 8, 2021
Now more than ever, companies are incorporating digital transformation into their business models. As organizations’ transformations yield advantage and generate growth opportunities, industry participants are challenged to accelerate their own digital initiatives to remain competitive.
Helping management scale and speed up transformation will require your board to adopt new strategies and methods, unbound by legacy assumptions. Adopting a new set of management disciplines and making multiple cycles of innovation come to life at scale will be critical to future-readiness.
One Fortune 100 client of Alvarez & Marsal offers a great example of leveraging ecosystem partners for transformation. After several years of trying to centralize its finance operations (and spending hundreds of millions of dollars in the process), only a small fraction of its 100-plus operational subsidiaries had converted to the centralized platform.
The client went back to the drawing board to define its foundational technology strategy. Instead of reinventing the wheel, it reached out to potential partners and evaluated a number of existing outsourcing and engagement layer tools to augment core systems. The client chose the best options from proven partners and platforms to speed implementation and help standardize processes, allowing internal teams to focus more on analytical work of strategic importance to the business. The new strategy improved the efficiency of the client’s finance operations, saving the company roughly 30 percent annually.
Structuring a digital transformation program using the three tactics above will challenge the old ways of doing things. But boards should also help management avoid the following common traps as they execute the digital transformation journey:
One of our clients (a nonprofit operator of hospitals and clinics) sought a competitive advantage and wanted to provide superior customer service where most patients first encounter the company—online.
So, the company researched customer pain points and developed tactics and systems to solve these problems. Its “digital front door” paved the way for the business’s first real-time online appointment system and mobile app, resulting in a 200 percent jump in bookings of certain services. It was also foundational to the client’s pandemic response plan, enabling critical communications and patient interactions when they needed it most.
Companies will have to adapt to keep up with their competitors now and in the future. Taking the above tactics and pitfalls into consideration, directors should focus on helping management develop new skills and recruit for talent that improves digital marketing, customer experience design, dynamic pricing, digital technology tools and platforms, and more.
The key is to not wait—or worse, neglect digital transformation altogether. That will only leave you in the dust of your speedier competition.
Michael R. Sutcliff is the cofounder of a technology start-up, an operating partner with Advent International, and a board director of Collabera, Encora, and Williams Lea Group. In addition, he serves as a senior advisor to Alvarez & Marsal and MCE Systems.
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