Digitization strips away everything that is unnecessary
Change is a driving force in itself. Digitization strips away everything unnecessary. iCore's business development manager Henrik Ljungdahl works according to these simple but powerful slogans. In his previous role as CIO at the retail chain JULA, he was responsible for driving the company's digital transformation. It gave him valuable experiences and insights about the challenges of digitization – what is the reason it often takes a long time, and what can you do to speed up the process?
- I am passionate about digitization and the transformation that affects all markets today. But there are obstacles that we need to talk about because they stand in the way of profitable and potentially very positive development. Meeting the challenges requires that you think in entirely new ways, says Henrik Ljungdahl.
What are the forces that oppose digitization?
- Change is always tricky and is usually met with resistance or skepticism. On the one hand, having a measure of critical thinking is positive. Still, the obstacles to digitization today are more about maintaining old structures that are unnecessary and only cost money. We must learn to work in new ways.
What is the biggest problem today?
- In principle, all work today is done via computers and information sharing. Making the business work as well as possible is partly about identifying the required processes and interfaces. The organizational structure must then interact with the processes. Problems often arise because the IT department knows how the processes work but is not included in the decisions that shape the organization's structure. IT must be part of management to digitize the business successfully.
The obstacles to digitization today are more about maintaining old structures that are unnecessary and only cost money. We must learn to work in new ways.
How can the organization be an obstacle?
- Today's organizations are full of goal conflicts since there are different ways of prioritizing what is essential. Departments and functions build their own power structures, which are difficult to tear down or redesign. It's easy to get stuck in silos, which doesn't benefit anyone in the end, even if it results in a comfortable sense of status quo for those in charge of each department. Many also forget their core mission and where they make their money. This paves the way for slow processes. In my experience, a good start is to ask what value a certain part brings to the business? Is it essential or revenue-generating for the business?
How should an organization be managed?
- A traditional company consists of the main business process – selling, producing, delivering and getting paid, which is usually divided into different departments that work together. A digitized business is more vertical because the processes are integrated, which means the business must be managed accordingly. The CEO has more of a balancing role today – think of the organization as a cross, with the CEO in the middle. Finance, which controls the expenses, is on one side, and on the opposite side is sales/marketing creating the revenue. Along the other line is HR making sure everyone is happy, versus IT responsible for the entire infrastructure. None of these four parts should weigh more heavily than the others for the business to function productively.
How can IT gain more influence so that digitization moves faster?
For the CEO, it is about facilitating a common language for the organization so that everyone understands each other and can work according to the same image towards the same goal. IT needs to skip the technical jargon and start talking so that others understand. HR and Finance need to focus on the big picture, which is the only thing that matters. One action many companies should take immediately is to move the IT perspective up to the management team. Without a comprehensive IT perspective, a business will never succeed with digital transformation and will eventually be eliminated by market forces. Digitization is about taking a market position and surviving as a company.
IT needs to skip the technical jargon and start talking so that others understand. HR and Finance need to focus on the big picture, which is the only thing that matters.
Follow our discussion about the challenges of digitization!
Do you recognize the issues that Henrik brings up here? During the autumn, in a series of posts and videos, we will take a closer look at the concept of digitization and what it means for businesses in 2022.
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