The digitalization strategy is being successfully implemented around the world by the leaders of IT organizations and enterprises at various levels. It creates a technological shift, transforming the look of the global business environment in a short time, generating new leaders and forcing the largest corporations to fight for their existence.
The digitalization process can be different in organizations. Companies with a conservative lifestyle are trying to conduct the process of transformation in stages and sequentially. Agents that are more aggressive and prone to innovation are rapidly updating their organizational infrastructure..
This position is confirmed by the regional HR manager at X5 Retail Group Natalya Trukets: “They do not recommend starting the digitalization process at the same time throughout the company if there was no such practice before. For starters, it’s worth starting a pilot project in a strong division or hiring an experienced specialist ”.
Opinions on where to start digitalization are somewhat different. It is believed that the cooperation of the company’s management with the IT department is the first step towards the establishment of a “digital organization”, but not all experts in the field agree with this position.
So, Vladimir Lasovsky, Orange Business Services Internet Business Development Manager, believes that “the first step in digitalization should be the change in business processes in the company. We should study the weaknesses in current decisions and draw up a list of shortcomings and ways to eliminate them, from which we should subsequently rely on when making decisions about the transformation of the system ”.
The main stages of business digitalization
Altimetr analyzed the experience of companies that have successfully undergone digital transformation and identified a number of stages on the path from a classic business to an innovative corporation:
• Stage of traditional business
There is work with clients, processes, technologies, metrics that are considered by the management to be relevant in the digital age.
• Digital Presence Stage
Work is underway on digital literacy of personnel, business processes in the entire structure are being activated. Experiments take place – pilot studies in individual units.
• Stage of formal digitalization
The organization begins to boldly and systematically harness new digital technologies and resources. Promising areas of development are opening up, experiments are being actively conducted, agents of change are emerging.
• The strategic stage of digitalization
Strategic plans for the digital transformation of the company are outlined. Working groups note the productivity of collaboration between work and research. Investments are allocated for digitalization, those who are responsible are appointed, and the results achieved are analyzed..
• Stage digital convergence
Digital transformation is supported by the new infrastructure with its roles, business processes, knowledge and models. A digitalization team is emerging that creates new strategies and operational models for management.
• Innovatively adaptive stage
Digitalization is inextricably linked to business. Management and all structural units are aware of the importance and inevitability of regular changes. The new infrastructure is favorable for testing emerging technologies on the market and their subsequent scaling.
According to experts, most Russian companies today are at the 1-2 stage of digitalization. However, this situation is not typical for all areas..
Automation and Human Labor
All experts in the field of business digitalization agree that it is not a way to replace human labor; rather, it is an auxiliary tool that works to increase efficiency. The digitization process can save people from doing routine work and create new jobs and forms of employment..
This is also the opinion of Elena Ustyugova, the head of the KPMG operational efficiency improvement group in Russia and the CIS countries. She notes that: “From the point of view of what percentage of jobs can be replaced by programs and robots, there is no single forecast. Studies give a significant variation in estimates from, for example, 9% of jobs that will be fully automated according to OECD estimates, up to 50% ”.
Sergey Rodionov, the director of business development at Jet Infosystems, shares this view: “Automation will undoubtedly replace a person in specific operations and will continue to do so. However, as practice shows, this modifies activities, giving a person the opportunity, when ready to learn, to engage in new and interesting tasks. In the next 20 years there will be no such thing that a person will not be needed ”.
Who needs business digitalization
Digitalization of business is vital for some enterprises, while others, it would seem, do not need it at all, or its absence is not critical. But the digital age is already showing that sooner or later, changes will affect all companies.
Different areas require a different volume of digital transformations, and this indicator may change over time. “So, in the oil and gas industry in the early 2000s, a company connected to satellite communications was considered a digital field, and now this term refers to a production process control system that allows you to monitor and control the operation of all equipment in real time,” adds Vladimir Lasovsky.
Sergey Rodionov notes that “first of all, business digitalization is necessary for companies operating in a tough competitive environment (red ocean). For such companies, a delay in the start of digitalization or a rejection of it may lead to defeat in the competition. The second is companies that use or intend to use large amounts of data in their core business. ”.
How much does business digitalization cost?
Today, the cost of digitalization is relatively high, but it justifies the costs in the first months after the introduction of digital innovation. This is due to a reduction in the cost of traditional equipment and resource costs from personnel and materials..
In addition, due to high competition, a decrease in the cost of services.
“Now there is a large number of highly specialized CRM and ERP systems aimed at solving narrow problems and the only advantage of each is the cost,” notes Alexey Galitsky, director of UP Business Coaching
Not unimportant fact is the volume of planned implementations. “The cost of digital transformation of the company will depend on how widespread the changes in the company will be. It is necessary to take into account the current state of processes, infrastructure and information systems, ”adds Elena Ustyugova.
Digitalization in business
Many enterprises and areas that are actively conducting digitalization in business, note their effectiveness. Experts demonstrate the effect of the introduction of digital transformation systems.
Svetlana Lapshina, director general of Big Realty agency, notes that “commercial real estate is confidently integrating into the figure. Demand itself pushes the market to new levels – today we are already using unified information systems, electronic mortgage bonds. This gives us the opportunity to make accurate forecasts, developers – to plan for the long and medium term ”.
Mikhail Pavlenko, a specialist at Kemppi Russia, cites an example from the engineering industry. “Just a couple of decades ago, engineering calculations were carried out by huge design bureaus and occupied an important line of the budget of any production. Today, business is trying to optimize material and labor costs, which is why modern computer modeling and forecasting systems are being implemented with great speed in the most technologically advanced companies. ”.
The digital age has come and business has begun to change rapidly. In order to stay afloat and improve business performance, organizations need to integrate digitization into their structure. It is better to do this in stages, but without delaying the process. At the first stages, it is important to equip the organization with digital infrastructure and launch pilot projects that can lead to large-scale business transformation. At the next stages, we need to formulate a digitalization strategy taking into account the company’s future business model in the digital world. This set of measures will allow the company to become more flexible and efficient..
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