The Pragmatic Business Case for Digital Transformation

Introduction: Qualitative, quantifiable, and sustainable improvements in your Balance Sheet and P&L are achievable via business process transformation enabled by a strong Digital Platform Core such as S/4 HANA.  The business value drivers are grouped into three categories: Innovation, Effectiveness and Efficiency.

 

InnovationUsing technology to support new business models, new products, and new services. The New Product and Service Creation process (NPSC) can be now be dramatically expedited. The New Product Introduction (NPI) process and pipeline can now further grow from the insights derived from effective Data Mining. The New Product/Service Lifecycle can now also be compressed via user friendly platform capabilities. Technology which used to be a constraint when supporting new business models is now a competitive lever.

 

Use Case I: Detect Customer Buying Patterns

  • Drive Product Bundling Promotions
  • Drive Subscription based sales
  • Drive Innovative Customer Loyalty Programs
  • Drive Demand Shaping Promotions
  • Drive Upsell and cross sell promotions via Lifetime Customer Purchase history

 

Use Case II: Detect Customer Complaint and Return Patterns

  • -> Drive new product features
  • -> Drive new shipping methods
  • -> Drive new return policies

 

Use Case III: Detect Cross Channel Buying Patterns

  • Drive Omnichannel strategy
  • Drive Sales by minimizing / eliminating cross-channel conflicts

 

EffectivenessExceeding customer needs by getting the job done. Are your business processes meeting your customer’s expectations?

Your competition has raised the bar. KPI targets previously considered best in class are now considered average. For example, many years ago backorders were tolerated by customers. Today, a backorder is a lost order.

Use Case I:  Reduce Backorders via Forecast Accuracy, Digital Collaboration and Demand Shaping

Use Case II: Compress Complex Pricing Approval cycle time by Workflow automation

Use Case III: Improve Competitive Responsiveness by monitoring Competitor Campaigns

Use Case IV: Improve yield via Historian Data Mining insights driving setpoint finetuning

Use Case V: Drive uptime via Internet of Things (IOT) enabled Predictive Asset Maintenance

Use Case VI: Improve Throughput via Mining Shift Performance data to drive training and leverage employee engagement

Use Case VII: Improve Uptime via Unplanned event replanning/rescheduling via automated Business Rules and Machine Learning/AI

Use Case VIII: Improve overall employee productivity by identifying non-value added waiting time driven by inefficient processes, complex interfaces and clerical errors.

 

Efficiency – Doing more with less. Having On-time-delivery of 100% is great; but, only if you are cost competitive. For example, some Logistics companies have excellent On Time Delivery records. However, Amazon is now in-sourcing logistics because its technology supports higher efficiency in transportation. Higher efficiency is enabling Amazon to build its own logistics business unit to challenge the current logistics industry landscape.

Main Use Case: Improve enterprise value by identifying the marginal cost associated with every 1 percent improvement in the top 4 KPIs. For example, one client’s aftermarket SBU had a 99% First Pass Order Fill rate. However, its fulfillment cost per unit was 4 times higher than the nearest competition due to highly manual, error prone processes.

 

Summary and Conclusions

In summary, Digital Platforms now offer access to technology that is slowly, but surely, being embraced by your competitors. The cost of Digital Inaction is high as we wrote about in a previous post:

https://itsupplychain.com/the-digital-imperative-the-opportunity-cost-of-digital-inaction/.

 

If this article hits the right cord with you, we think you’ll enjoy our third post on the next step to defining a Digital Roadmap for your business.

 

 

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