4 models for digital transformation

As new tech platforms emerge as competitors, and client expectations exponentially evolve, the transformation momentum is becoming increasingly urgent.

But what does it really take to digitise your business, and make the most of the technology that's already available?

Brian Pereira, Chief Reign Maker with technology consultancy Digital Reign, supports many organisations with this process – from government departments to small businesses.

“The digital part is easy. Making it smart is a little more difficult,” he says. Depending on what you are trying to achieve, there are four models for change to consider.

1. Transformation by increment

Pereira believes this is a successful approach for smaller businesses. It allows you to focus on specific pain points in your business, and look for quick wins.

“Find digital tools and apps to support you by asking other businesses in your sector, or your trusted advisers. For example, digitising paper processes and application forms, or automating back office functions like accounts payable.”

This sounds relatively simple, but the impact can be quite transformative. A recent global study from IDC and Cisco found that for the 63% of businesses still at early or manual stages in their digital development, there is significant upside in revenue, profit, customer retention and productivity growth.1

“Back office process technology is already mature, so small businesses can access the same invoice processing or payroll software as an enterprise without having to pay for the infrastructure. If accounts payable is currently being handled by multiple hands, you could save 15% to 30% on costs in the first year.”

According to Pereira, strata is one sector on the path to major disruption and automating accounts payable is a ‘quick win’ response.

Data is the pot of gold at the end of the rainbow.

“The strata market is so fractured with many small players. The ones who transform quickly can maximise their profit by managing buildings more efficiently. It’s a daunting task to manage utility and repair bills across hundreds of lots, so invoice processing can deliver back time and dollars.”

2. Re-think the process

When you digitise, take the opportunity to question the purpose of every question or action.

9 effective tools for business productivity

“Most processes, from accounts and payroll to onboarding staff and clients, have evolved over time based on changes in your business,” explains Pereira. “Use technology to make it adaptive – for example, if your form requires the applicant’s ABN or drivers licence, automate the address check and pre-populate the form.”

Questions can adapt to responses, skipping some while adding those more relevant. And the form can be qualified as it is filled, reducing turnaround time. It’s a more convenient, streamlined and personalised experience for customers.

Pereira says there is also potential to humanise the experience through chatbots, where a computer program can simulate a customer conversation.

“We tested help bots with a government department for a renewal process. It feels like there’s a person helping them find the right form, filling in any available information and answering questions along the way.”

If the questions become too hard, the customer is seamlessly handed to a real person at the help desk. “It reduced call volumes by up to 60%, giving support staff extra time to focus on more complex concerns,” says Pereira. 

3. Create an entirely new platform

Sometimes the solution doesn’t exist on the shelf, as Mike Noonan of Sydney-based real estate agency Sanders Noonan found. He was looking for an intelligent Customer Relationship Management (CRM) system with reporting capabilities that would capture valuable data across all areas of the business, but he couldn’t find exactly what he needed.

So they built the cloud-based platform themselves. Six years and almost $1 million later, REALCloud now tracks every business activity.

“It’s business and sales focused, but delivers accountability,” explains Noonan. “It helps agents manage prospects and stay in touch, it improves our understanding of our wins and losses. It’s just smart business.”

Partnering within your industry allows you to share some of the risks – including time and money.

The system tracks every inbound and outbound call, email and SMS, and automates functions like buyer analysis and auction invitations. That means Noonan’s sales team can write more business without needing an assistant.

He admits the change was hard to sell internally at first.

“When we started using it, I thought we’d have a mutiny! We lost a few sales agents, but we have also attracted the right ones, those who understand how it benefits them. And now, we can't do without it.”

Pereira says “data is the pot of gold at the end of the rainbow,” and systems that deliver powerful insights through predictive analytics can transform the impact of business decisions.

“These systems need to understand the industry context. For example, we took all the point of sale (POS) and supply chain data for a hospitality chain and overlaid it with weather data, sports events and other variables. We could then predict the likely impact on sales of promotions or staffing changes.”

Noonan agrees that his system has given him predictability. “You need really good software to manage a business, otherwise you’re guessing.”

4. Partner for change

Noonan has invested significant resources into this technology, and is now talking to different parties about its potential for broader use. He says Microsoft was interested in the early stages of its development, and provided practical advice.

“My programmer spent eight weeks working with Microsoft’s engineers,” he says. REALCloud is now a highly sophisticated system, capable of complex data analysis and reporting to help guide seller decisions.

Partnering within your industry, or with a tech platform or other interested party, allows you to share some of the risks – including time and money.

“We’re looking at bringing together some smaller businesses in a non-competitive way, so they can benefit from group buying,” says Pereira.

“You no longer need the scale to be more efficient.” Working together, you can also combine niche expertise and client bases.

No matter which model for change you select, look for opportunities to make positive improvements – one step at a time, or with wide-sweeping transformation.

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Unless stated otherwise, this material has been prepared by Macquarie Bank Limited ABN 46 008 583 542 AFSL & Australian Credit Licence 237502 ("Macquarie") for general discussion purposes only, without taking into account your personal objectives, financial situation or needs. Before acting on this general information, you must consider its appropriateness having regard to your own objectives, financial situation and needs. The information provided is not intended to replace or serve as a substitute for any accounting, tax or other professional advice, consultation or service.

1 Is Your Network Ready for Digital Transformation? IDC white paper, Jan 2017