Three Common Objections to Digital Transformation for Small and Medium Sized Businesses
The hottest buzzword (or buzzphrase) in companies worldwide is Digital Transformation. This phrase, however, brings a scowl to more faces than "Continuous Improvement" and "Operational Excellence"or "KPI". The reasons these terms reveal pursed lips and judgmental eyes is because of their terrible reputation in the workplace.
Companies in the AIME (Architecture, Industrial Manufacturing, & Engineering) market sector have a constant struggle trying to stay competitive and have the right kind of innovation while trying to beat challenges on every front.
Integrating suppliers together.
Winning new business.
Keeping customers happy.
Internal Program and Process Management.
Ensuring products uphold the highest quality.
Handling rework requests.
Dealing with unexpected costs due to maintenance, repairs, errors, recalls, and other unplanned work.
Panic Fridays. (Does a cure exist?)
These challenges may seem endless, but companies deal with these and more everyday.
Here's the problem: There is a huge difference in doing something every time and doing it in exponentially less time each time you have to do it. Identifying where in your daily operations you're able to automate and spend less time doing repeatable tasks is a craze that we can all fall behind. Provided the value makes sense against the cost. After-all no one wants a pizza in 15 minutes if it costs $100.
Based on research conducted at the Technical University of Munich and SAP SE, 57% of respondents have identified the need for tech skills so they can develop a successful digital transformation strategy. But are they actually ready? Small & Medium-sized companies shared some of the same objections when talking about transforming themselves....digitally...
Here are some common objections, and an alternate perspective about them.
Objection #1: We are not really a big company.
So be it. But are your priorities similar to the big companies? Is revenue, growth, maintenance, talent churn, and competition just as valuable? The answer is most often "Yes!"
Companies of all sizes may work at different tiers within the supply chain, but the rules of business are the same. Furthermore, the size of your company doesn't dictate the sophistication of the tools you can or should use. That is equivalent to saying, we play in a lower league so we don't really need good equipment.
Your sole mission as a member of the manufacturing supply-chain is to consistently produce parts and offer services better than the last account. This means choosing the right tools and the right talent is just as important to your success as it is to any company of any size.
Objection #2: We've always done things this way.
This is the scariest sentence in the business world. Here's another rendition of this sentiment that some might be able to recall.
"We didn't do anything wrong, but somehow, we lost."
Companies that have steady orders and a defined capacity find themselves mistakenly thinking they have achieved maturity. Here's the counter-intuitive part: if things are going A-OK, you need to now focus on:
Scaling your operations so that you are able to become even more efficient, and spend less and less time each time for each order. AND
Innovating either by product or the process: Increase focus on operational maintenance with things like waste reduction, customer satisfaction, internal education, and many other things that ensure a great working culture.
Doing things differently for the sake of doing it is no smart decision: however focusing on using the latest technology to cycle through the automation cycle allows you to consistently get better and stay ahead of the market.
Objection #3: It just sounds like fancy talk for "Spend more money for getting the same."
A lot of this objection comes from being ill-informed about technological transformation. Moving from drafting boards to computers to do drawings was a radical change, but it was necessary. Did it cost a lot of money? You bet. Cost of computers, training, constant stress from people fearing losing their jobs to technology. All of these things are usually associated with digital transformation in the company.
Here's the flip-side: Choosing not to invest in making your company hyper-efficient is subjecting your existing systems to challenges of the market. As market challenges get more and more complex, it becomes harder and harder to get your internal talent to put forth their very best because let's face it, everyone can only learn at a finite pace. Here's the scariest bit: when that class of talent retires, or leaves, for whatever reason, so does their knowledge. New talent arrives, and due to a lack of adopting digital transformation, you are not able to ramp them up to the same spot where the last person left.
Does digital transformation require an investment not just financially, but also culturally? Yes
Can you survive without considering digital transformation for your company? Yes
The question is: How long?
Age-old wisdom is only as good as the time it applies to. Companies that wish to stay competitive must consider adopting newer tools that not only solve problems they currently have in their operations, but also to spot problems that lay dormant within your systems of operations until its too late. The goal isn't to scare you into signing a cheque, the goal is to broaden your understanding of what it takes to continue to be competitive. It's not just cost-accounting. It is a complex story set to the tune of the market, and if you want to keep the right to play with the best companies, you need to adopt a culture that engages change.