Digital Transformation and Business Strategy Alignment: Top 3 considerations
At the core of the concept of digital transformation is the idea that IT and business systems underpin and enable business strategy. This is little different from the age-old tenet of aligning your business and systems strategies. Technology has a crucial role to play in any modern enterprise, but it shouldn’t be a matter of tech for tech’s sake: the whole purpose of the tech is to enable and support the business strategy.
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That’s why it’s so important that the projected future evolution of an enterprise needs to be considered when making technology investment decisions.
But what does this mean in practice and what questions should you be asking? Here’s Lumenia’s top 3 topics to consider:
1. Plans for Growth
What is the projected growth profile for the company over the next three to five years? Will it be organic growth at a similar rate to recent performance, or is the pace of growth likely to change? Are new acquisitions in the works, and what will this mean to the scale of the business? Is the company expanding operations or sales activities into new locations?
Why is this important?
The ability to scale and to support users and operations in new locations is fundamental to any successful systems strategy. The failure to think ahead can lead to an inability to meet the organisations’ performance expectations, unnecessarily complex infrastructure and increased IT running costs.
2. Plans for Diversification
Will the nature of goods and services stay the same or change? For manufacturers this may mean the servitisation of existing products. For service-organisations it could mean increasing the use of digital technologies to support customer interactions. For any enterprise it could cover the changes involving the insourcing or outsourcing of activities.
Why is this important?
Systems that are a perfect fit now may not be such a good choice when assessed against the organisation’s main activities in three, four of five years’ time.
3. Plans for Organisational Change
What else is on the agenda that could affect a business systems or digital transformation strategy? For organisations that have grown via merger or acquisition the question of process harmonisation is often on the agenda. Larger enterprises may be looking for opportunities to implement new centralised functions or shared services.
Why is this important?
The change management implications of implementing harmonised processes, centralised functions or shared services needs to be factored into the deployment strategy. Cost savings resulting from restructuring or improved efficiencies may be a significant driver in their own right and often dictate deployment priorities.
The common theme here is ‘thinking ahead’. Don’t get caught out by failing to factor in foreseeable or likely developments when planning your digital transformation or business systems strategy.
This Blog was written by John Donagher, Consulting Manager at Lumenia. If you would like further information on ERP please send an e-mail to John Donagher.
