ERP software is the technology backbone of manufacturers and the majority has already automated their processes through an ERP implementation. If the story ended there, all would be well. But technology marches on and manufacturers large and small continue to grapple with the fast-changing digital landscape.
From on-premise systems, to SaaS, to BYOD and shadow IT, digital technology is continuously changing how business is conducted. Not exactly man-bites-dog-news, I know, but it lays the foundation for why so many manufacturers are struggling to make the transition to the digital world: the changes are coming at management teams faster than they can react.
But speed is not the only culprit, nor is it the most important. According to the results of a survey conducted by MITSloan Management Review and Deloitte, the biggest hurdle to digital transformation is company culture.
The survey identifies five particularly important cultural characteristics: Appetite for risk, leadership structure, work style, agility, and decision-making style. The article points out that there are other factors, of course, but these bubbled to the top as being the most important and it’s not hard to understand why.
All five characteristics are people-centric and when you strip away the processes and technology that make a company run you are left with the people. The same people who created the processes and selected the technology that make the company run.
The bottom line from SloanMIT and Deloitte is simply this: Transitioning to a digital company cannot be accomplished if you don’t first develop a digital culture. Oh, another conclusion: If there are no plans at your company to develop a digital culture, a grave mistake is being made:
John Hagel, co-chairman of the Center for the Edge at Deloitte, believes failing to recognize the threat is risky. “There is tendency to see digital technology as an opportunity or choice,” he observes. “However, the mounting pressures of a rapidly shifting business landscape are turning digital from a choice into an imperative. The longer a business waits, the more marginalized it will become.”
When you put it in those terms, it’s pretty clear that management teams have little choice than to figure out how to instill a digital culture as the foundation of their digital transition strategy.
Building the right culture is only the first step and there are things you can do to make it a smooth one. In upcoming posts we’ll take a deeper look at what you can do to set your company on the path.