Not every organization sees the value of a Digital Transformation initiative right away. Internal champions are generally tasked with convincing whomever controls the purse strings that the juice is worth the squeeze. This requires thinking about what is possible, and is more art than science.
If you think about a manufacturing environment, ROI questions are easily answered. For example, if your product requires cutting components out of a piece of metal, there will be some waste material. If a company came along and said they had a new machine/technique that could reduce the amount of waste material, shaving a few pennies off the per piece cost, the company needs to evaluate the savings over their usual run rate vs the cost of the machine. If you can be in the black in a year, it is probably a worthwhile investment. If the machine is too expensive for the run rate, the manufacturer will not purchase the equipment.
Digital Transformation doesn’t have cut and dry numbers to evaluate. Since Digital Transformation projects are Business Processes improvement projects with a technical focus, your results are typically around efficient use of your people and their time. There are still some great ways to illustrate the value to your executive team.
Imagine a sales process project where you implement a CRM system, add a mobile application for your field sellers, and a structured communication mechanism between sales team members. Now, you may have some savings in office supplies because your sales team is using less paper, but these savings barely make a dent in the bottom line. What is more interesting is to focus on how the sales team operates going forward. Perhaps your sales team spends their Fridays following up and entering data today, but with the new system, they can take two extra meetings on Friday. Not every meeting leads to a sale, but 100 extra meetings a year, at a 1% convert rate, means an extra sale a year. Sure, not a lot, but if your average sale price is $200k, and you have 10 sales people, that’s an extra $2M per year. Sounds good doesn’t it?
Using that same sales process example, perhaps your company is losing deals because you aren’t reacting fast enough. It could be because your team shares information over multiple emails and phone calls, and it takes too long for everyone to have all the data they need. In your new system, someone in the field can use their mobile app to enter the opportunity details into CRM. Then with your structured messaging system, alert a team member to the opportunity. That team member can add their data to the opportunity, pass it on to the next person, until you are ready to send a proposal to the customer. Since everyone is working on the same record, no one is in the dark about what the other members are doing, and you can get to that proposal quickly. You’re still not going to win 100% of the deals, but you know that if you can get your proposal in front of your customer before they make a decision, you will win some deals.
There are opportunities for efficiency gains on the service side as well. As consumers, we know that it is incredibly frustrating when a company’s service department doesn’t seem to know what you’ve purchased, conversations you’ve recently had, etc. A service oriented Digital Transformation, may bring data from disparate systems into one view for a customer service representative. Tapping into your phone system can automatically bring up the customer’s data on the rep’s screen. Your reps will be able to spend less time looking up information about their customer, and more time helping them. None of this directly leads to sale, but it will help improve your customer satisfaction. Happy customers are repeat customers, but more importantly, happy customers tell other people that they are happy.
When it comes time to sell your Digital Transformation project to your executive team, think about what you are hoping to improve from a process perspective. Show the value in the project by putting some hard numbers to the efficiency gains you will achieve.
Visit our services pages to learn more about what we offer, read our case study to get an idea of what that would mean for your business, and contact us if you want to discuss your Digital Transformation Goals!