Middle market organizations often get by with manual processes, spreadsheets, and workarounds when it comes to their data. When systems functionally “work”, it can be a difficult decision to upgrade the systems and technology that drive the business all in the name of digital transformation.
However, the pandemic shone a light on the necessity for transformation. Middle market leaders are coming to the realization that they must have robust IT systems and processes in place to serve their customers and constituents, secure their assets and grow their business.
Projects to streamline business operations and bring together data across areas to work together are now in sharp focus for middle market organizations that want to be more profitable, efficient and competitive.
Not too long ago, digital transformation seemed reserved for large organizations with significant capital resources. Fortunately, it has evolved over time and become more affordable, scalable, and essential for middle market organizations.
What You Really Need to Know About Digital Transformation
Digital transformation is quite simply the use of technology to drive business forward. As the name implies, it is about using a connected, somewhat interwoven, set of digital technologies to change the way a business operates—holistically, from the core outward. In a digitally transformed organization, the infrastructure as a whole is designed to be greater than the sum of all of its parts.
Digitally transformed organizations have worked to achieve:
- The full support and participation of all their teams, from back-office to front line workers
- Greater productivity from efficient business systems and operations
- A laser-focus on customer engagement and retention
- A commitment to the protection of digital data
- A solid plan and process for both immediate and long-term IT spending
What Drives Digital Transformation?
To really know if your organization is ready for a change requires an honest look at the top drivers of successful digital transformations— operational efficiency, digital resilience, customer experience, and revenue opportunities—and whether or not you have them.
Enhanced Operational Efficiency
Streamlining operations is always top of mind for executive leadership. This is especially true in the pandemic-era, where middle market organizations must be capable of changing directions at a moment’s notice, and when many are scrambling to do more with less. Enhancing operations by identifying barriers that are often artificial within an organization is key. And it’s worth challenging the “that’s how it has always been done” mentality.
Stronger Digital Resilience
In early 2020, as workforce practices literally changed overnight because of shutdowns, middle market organizations got a rude awakening to the need to be digitally resilient. Suddenly, they had to shift their business processes online since core functions could not take place in person. Were employees able to maintain the level of productivity they had working in the office from their homes? Is all sensitive data protected from all of the places employees are now accessing it?
Improved Customer Experience
There is no doubt that customer and constituent behavior has greatly shifted during this time of great economic disruption. Retaining and delighting customers with new and innovative products and services to meet their needs should continue to be a top priority. According to the BDO 2020 Digital Transformation Survey, more than two-thirds (68%) of C-suite executives say improving customer experience is their top short-term business goal, and 22% cite it as their top digital priority.
Staying afloat is now more challenging than ever before, and middle markets must be creative with so much competition. Many are looking to diversify revenue growth opportunities, while concurrently maintaining priority services, and cultivating new business with long-term, data-driven planning.
Digital Transformation: A Solution for Any Market
Digital transformation is not limited to any specific industry. In fact, key findings and opportunities are emerging for middle market organizations across all sectors, including:
Construction and Real Estate
Likely one of the industries most reliant on collaboration and process is construction and real estate. If any step of a deal or project is missed, everything thereafter is off, and deadlines are often missed. While project planning has been steadily migrating to the Cloud for collaboration purposes in recent years, the pandemic accelerated the use of office productivity tools such as Office 365, back office enterprise resource planning (ERP), and overall company-wide collaboration. Automation of manual workflows can also enhance productivity in this industry by automating daily reporting, purchasing, invoice approvals, time and material tickets, and job photos.
Not only are financial services companies concerned about cybersecurity and the protection of their clients’ private financial data, but many are concerned with being able to simultaneously focus on enhancing the customer experience and expand their product mix. That means providing a seamless customer experience that reassures customers that their assets are protected, while at the same time, anticipating the products their clients will need before their competition. Data can pave the way for this kind of planning.
Higher education continues to be big business, as more and more institutions shift to online and hybrid learning platforms.
In addition to the marketing benefits digital transformation can provide through the use of social media, this sector has other data-driven opportunities. With the potential to serve these life-long customers, institutions can capture an enormous amount of data throughout every stage of the student lifecycle—from recruiting and enrollment, to instruction, career services, graduate studies, and ongoing alumni initiatives. All of these areas are ripe with information that leaders can use to make data-driven decisions for institutional success.
Covid-19 has literally turned the healthcare industry upside down when it comes to responding to both the ongoing and critical needs of patients. Telehealth, coordination of care between multiple medical providers, and continuity of the medical supply chain are just some of the many components pushing the boundaries of today’s digital medicine. As providers navigate the “new normal” of healthcare delivery, technology is at the forefront of discussions regarding care delivery and best practices.
For many nonprofits, digital transformation may seem impossible on a shoestring budget. However, limited budgets are exactly why transformation is so important. Nonprofits can never lose sight of their mission, basing every business decision on initiatives that will result in the most impact and operational efficiency for those they serve. Elimination of manual processes that slow decision making is at the heart of this market.
Manufacturing and distribution
Manufacturing has seen a rapid shift focused solely on data in how they operate, go to market, compete and serve its customers. A National Center for the Middle Market (NCMM) survey of 500 C-level middle market executives reports that the top initiatives for manufacturing are modernizing legacy IT infrastructures while deepening customer relationships, along with real-time warehousing and inventory management tools to streamline distribution and logistics, and electronic invoicing and other automated financial functions. Due to the unpredictability of manufacturing today, being nimble and capable of changing directions at any time, while still being able to do more with less, is the focus. According to research from Harvard Business Review, companies that focus on operational efficiencies over layoffs to manage costs are more likely to experience “breakaway performance” coming out of a downturn.
Where to Start
For organizations ready to embark on the path toward digital transformation, leadership must be willing to change the way something has always been done. To start, an assessment should be conducted of all existing systems, processes and people to evaluate:
- Organizational readiness related to staffing, skills and culture to accept necessary changes in order to give constituents what they really want, the way they want it
- Existing distribution and communication channels and their overall effectiveness
- Business processes (both the good and the bad) that move and fulfill everyday transactions
- Systems used to track interactions and customer preferences
- A deeper understanding of buyer or member personas — what they want and how they want to engage with the organization
- Any analytics that currently drive decision-making
An ideal outcome of an effective digital transformation strategy is being able to offer a customer an intimate experience that scales across the whole organization. Effectively communicating change when implementing new systems, technology and even leadership, are the keys to ensuring a successful, enterprise digital transformation. Hartman can help with the behind-the-scenes planning, team coordination, strategy and executive governance to make your business transformation goals a reality. Since Hartman is independent and doesn’t profit from the sale of any technology, clients can trust that all recommendations are in their best interest.
Work With Hartman Executive Advisors
Tomorrow can come sooner than any of us think, as we all learned in 2020. The time is now for business leaders in all industries to take steps toward digital transformation in 2021. Contact Hartman Executive Advisors today to connect with an advisor who knows your industry and can guide you in the right direction.