40 years ago, before personal computers existed and rotary dial phones were in use, mainframe computers, which were used primarily by large organisations and able to automatically process large batches of data overnight, were at the peak of digital technology.
Today, with your smartphone in your pocket being millions of times more powerful that any 70s mainframe, businesses are watching consumer technologies with growing admiration. The reality is that business digitisation is falling behind consumer digitisation, and work productivity hasn’t gained the same level of transformation as our private lives.
Earlier this month, we held a great round table event in London, where a small group of very engaged supply chain executives explored in depth the challenges and opportunities for digitisation. We began the discussion by talking about how digital our private lives are and, on the other hand, how frustrated we are with outdated technology in business environments.
In our private lives, technology is so pervasive and easy to use that it really does help to make things easier. For example, we can search and compare flight options, book tickets and check-in online with just a tap on our smartphones. Our planes will be safely self-driven by autopilot. And now we can even avoid queuing at bag drops!
To expedite luggage processing and further empower the passenger, European airline easyJet has created the world’s largest self-service bag drop check-in area at Gatwick airport. This fully automated facility has helped to cut queue times in half, resulting in a waiting time of less than five minutes. With these new self-service kiosks, easyJet aims to give its customers a superior airport experience. After all, happy customers always come back.
What are companies doing?
The group agreed that businesses have to become more digitised and give customers the same “easy” experience they get in their everyday digital lives. The group discussed a few case examples:
- Dell gathers product information from a number of disparate sources – contract manufacturers, repair centres and directly from products themselves – and uses big data analytics to predicts possible failures before they occur. This enables Dell to speed up customer support response and increase customer experience.
- Rolls-Royce uses big data analytics and the internet of things to remote control its jet engines. Actions can simply be correcting conditions while the plane is still flying or – in case of a more serious issue – organising a maintenance team and necessary replacement parts to be available when the plane will land, anywhere in the world.
- Coca-Cola’s Freestyle machines, which allow consumers to create their own beverages, are connected to the internet of things. This enables the company to track what drinks people are making and how often, which informs their forecasting and replenishment planning systems.
Digitisation: a must do
Digital transformation is a deep change for traditional organisations, but it must be embraced in order to prosper in the digital world. Participants at the round table agreed that the benefits of digitisation are increased supply chain speed, accuracy and optimisation, all of which drive the customer experience.
The burning platform for digitisation is therefore competitive pressure. If you don’t do it, your competitors will. And with a faster supply chain and superior customer experience, they’ll kick you out of business.
With this in mind, there’s a sense of urgency among supply chain leaders to convince the CEO, first and foremost, to rapidly embark on a digital transformation. As digitisation is less about cost reduction and more about the intangible benefits of customer experience, supply chain leaders will have to make an extra effort to calculate the return on investments.
The COO to lead
If the CEO and CFO can be convinced, the CIO is likely to be against it. In fact, technologies such as the cloud, the internet of things and big data analytics can make past IT decisions meaningless. The CIO is no longer the change agent and is often not ready to support the digital transformation.
Additionally, digitisation spans the whole supply chain and companies will need to create a brand new technology function besides IT. Businesses need a function that sees technology as a means to driving the business and creating customer experience. It also needs to extend from robotics to machine learning, from the internet of things to cloud and big data analytics.
With the role of orchestrating the daily operation of a company end-to-end, the Chief Operating Officer (COO) is well placed to drive the digital transformation. The COO knows this stuff and must be the digital champion to make digitisation a success.