Digitization: Administrative requirements and a lack of technology make it difficult for many companies to do business. But if you manage to advance digitization with the right strategy, you have a good chance of success.
To get a picture of the mood in the global economy, Planview commissioned the market research institute Lawless Research to take stock. More than 1,000 companies, 105 of them, were asked for the representative study “Strategy implementation – an inventory for: How companies adapt more quickly in a time of permanent change.” The result: Many companies still find it difficult to react quickly and consistently to market changes or disruptions. Digitization is made more difficult by complex governance and approval processes, inefficient workflows, poor communication, and, last but not least, persistence in silo structures.
In addition, there is a lack of flexible coordination processes. The study developed three categories (pioneer, challenger, laggard) based on five questions, depicting the degree of strategy implementation maturity. In this context, solution approaches were developed with which a more agile corporate management can be designed and implemented.
Digitization: Accelerate Decision-Making
The fact is that companies, regardless of whether they are or other industrialized countries, have no choice when it comes to digitization: They have to face the ever-faster changes in the global economy. It seems logical that more and more companies are reviewing their strategy, portfolio, and processes. According to the Planview study, 76 percent of professionals are convinced that companies urgently need to accelerate their decision-making and implementation. After all, 29 percent review their corporate strategy every six months, and 25 percent even do it once a quarter. But questioning the strategy is not as easy as it seems at first glance.
The reason: In Germany, 89 percent of those surveyed consider it “a little or extremely time-consuming” to collect, analyze, compare and pass on the information required for decision-making processes. Fifty-nine percent see the reasons for this shortcoming in a lack of data and 40 percent in the lack of high-performance technologies. But even if most of them are aware that the structures and workflows in the company urgently need to change, the spreadsheet as a control tool, “Management by Excel,” is still very present – and not only in the upper management levels.
Digitization – Easier Said Than Done
But even if the necessary information can be identified and collected, that is not enough. Even the gain in knowledge is not enough. It must be followed by deeds, for example, minor course corrections or even radical changes. For the change, or rather the innovation, to be successful, it is not uncommon for investments to be made in advance – in modern technologies and better workflows. According to the study, every second hopes that new technologies will result in a higher degree of automation and an associated increase in inefficiency.
If You Want To Play At The Front, You Have To Become Lean And Agile
But regardless of those whose level of technological maturity can still be improved, there are already companies today that can react quickly and flexibly to changes in the market. Why? Because they opted for process automation at an early stage and introduced methods such as lean and agile. This enables them to drive corporate transformation at all levels. But there is still a long way to go towards fundamentally flexible corporate concepts. Although it is ahead of the curve in lean manufacturing, only 38 percent of the companies surveyed state that their current planning rhythm enables quick reactions and changes. Only twelve percent of companies rely on continuous re-planning.
Of Pioneers, Challengers, And Laggards
Something else is also interesting: three different groups emerged from the answers: the pioneers, challengers, and laggards. The pioneers are characterized by the fact that speed is their top priority. On the other hand, the challenges are open to innovations and changes but cautious. Ultimately, the stragglers have to deal with the changed conditions in the first place. But regardless of the respective degree of change maturity, the following aspects have proven to be relevant, which help companies to position themselves more effectively and sustainably for the future:
- Faster decision-making is a top priority, as is its subsequent implementation.
- To better understand the business, technologies for collecting central company data must be implemented.
- Strategies, funding, and operational plans must be aligned with short planning cycles.
- When reassigning tasks and projects, the priorities must always be kept in mind.
- The use of lean and agile methods throughout the company
In summary, it can be said that the answers of those surveyed show a great need for more dynamism, efficiency, and innovative technologies in an international comparison. This is paired with the desire to overcome structural and administrative hurdles finally. This enables companies to react faster to market changes and assert themselves in international competition.
Examples Of Successful Digitization
An insurance company is now using the approaches of lean portfolio management. This means that new goals are no longer set once a year but every three months (or more frequently as needed). At the same time, the company can re-plan the financial resources accordingly after considering the results and allocating them for this period. Another example shows the advantages of quick strategy implementation. A global manufacturer based, for example, re-prioritized its capital plan within a few days. This enabled the company to achieve the appropriately adapted strategies and objectives in response to the corona pandemic.