Part 1: Digitization
This step involves taking information from the brick-and-mortar world and storing it on computers. In practical terms, it means replacing pens with keyboards, post-it notes with emails, and filing cabinets with spreadsheets. By keeping your records in digital form, every department in your business becomes easier to organize, access and reference when needed – and an electronic record is kept every time you hit ‘send’.
Most organizations have reached this stage, at least for their internal information library. But a surprising number have left this goal only partially fulfilled. Some managers feel that many of their systems work well enough already, and upgrading entirely to digital would be an unnecessary expense, both in terms of time and effort. There is also a question of platforms to consider; spreadsheets do tend to look uninspiring, and managers might not know much about the alternatives.
Moreover, their workforce may be accustomed to the way things currently are and have their hands too full to want to sit down and learn an entirely new system. And if certain employees are already planning to retire or move on in a couple of years, then their managers may decide to just let them handle their own corner of the business in peace for the time being. In such ways, companies tend to let inertia take over, kicking the can further down the road so they can deal with the problem later.
But inertia is a poor business strategy, particularly during this period of rapid economic transformation. In recent years, nearly every major development – in all industries – has been fueled by digital innovation. Within such a context, resisting modernization by delaying the most basic business upgrades is the riskiest of all strategies.
In fairness, traditional forms of communication and information storage were indeed adequate to serve their original purpose. But the introduction of advanced computers opened incredible new doors, letting businesses see what they were missing if they continued to do things the old way. And as each company made its upgrade, pressure increased on their competitors to do the same. The old saying had got it all backward: invention is truly the mother of necessity.
The pre-digital world reached its potential long ago, in a world where heavy sets of encyclopedias were marketed by door-to-door salesmen, flights were booked by brick-and-mortar travel agents, all mail was sent through the post office, and people got their news from radio, TV and paper newspapers. Growth in all of these fields has ground to a halt – and in many cases, the entire business model has evaporated.
No matter how comfortable you might be doing things the old way, making the switch to digital is easier than you might imagine. Well-designed computer systems can be learned with ease and can reduce the workload on your employees. By allowing for increased efficiency, digitization lets companies save money on labor in the long run. Your team will likely be happier as well, as they have better tools to work with and can, therefore, spend more time on strategic thinking, problem-solving, customer interaction, and new ways to generate profit.
Digitization alone will not turn your company into Amazon, but it is a necessary first step towards a competitive 21st-century business. Its advantages are experienced by customers and clients only indirectly; public-facing innovations come a bit later in the process. But in terms of your organization’s internal procedures, digitization is like building your own corporate infrastructure. It allows you to achieve your current goals faster and more accurately, thanks to excellent improvements in workflow.
Most importantly, digitization prepares you to take the next steps on your digital journey, where it becomes possible to pursue an entirely different set of goals – and truly separate your business from the competition.