Digital transformation dramatically improves operations in the supply chain. Recent advancement in voice recognition, the Internet of Things (IoT), and cognitive technologies create superior digital experiences across many channels and mediums. A combination of all this, potentially gives supply chain organizations the opportunity to resource and create advanced digital experiences that have the ability to improve the end user experience and deliver better business results.
Despite this, many supply chain organizations are missing the opportunity either because they are unaware, or because they are not prepared for a digital future. The longer businesses put off making improvements, the more difficult it becomes to upgrade, update, and be prepared for the digital future.
But what are the common digital transformation hurdles and how supply chain leaders can overcome them?
Rethinking digital transformation strategies
Many supply chain organizations are struggling to make improvements in essential areas such as direction, experience, culture, and technology. A comprehensive report (registration required) published by PointSource found that these four key areas of digital transformation support the organizational framework that is adaptable as technology and user’s needs continue to evolve.
According to the report, 42% of respondents said that “their organization’s digital strategy lacks clearly defined business objectives with measurable key performance indicators (KPIs), and nearly half (48%) reported that their organization’s digital strategy does not provide clear understanding of audiences.”
Four pillars of digital transformation
When the four areas of the digital framework are intermixed, the collective makes it possible to execute digital transformation with precision and flexibility. It also allows businesses to meet their needs and also the demands of their end-users. The four key areas consist of eight critical components:
The case for digital reinvention
A McKinsey study found that average supply chain has a digitization level of 43% and only 2% of the surveyed supply chain executives said the supply chain in the focus of their digital strategies. McKinsey research suggests that companies that aggressively digitize their supply chains boost annual growth of earnings by 3.2% and annual revenue growth by 2.3%.
In 2017, CIOs were spending 18% of their budgets in support of digital transformation, and that number is set to increase to 28% by 2018, according to Gartner’s 2017 CIO Agenda survey and report.
To be prepared and be able to perform in the digital future, supply chain organizations need to recognize that outdated digital solutions can’t help them meet the demands currently at stake. They need to make changes to extend the digital experience to different channels and devices.
In order to perform across a wide variety of interaction points, organizations must count with an updated digital strategy and infrastructure with support of the entire organization. The four key areas of digital transformation —direction, experience, culture, and technology— can support organizations in their journey to strategize, shape, execute, and iterate upon a successful strategy for digital transforma