Organizational Challenges of the Digital Transformation in B2B
Many B2B organizations have their digital transformation high on the agenda. And that is wise given the expectations of the customer. Of course, the rapidly changing competitive landscape also plays an important role in this topic, as developments in B2B are progressing rapidly. In this case, standing still has gone down sharply. But how do you encounter this transformation within a more traditional B2B organization? And what organizational challenges will you encounter?
During this session of the expert group B2B Digital Commerce, which this time is a guest at Flamco, the topic of organizational challenges in digital transformation is central. Herbert Pesch, director of B2B digital agency Evident, together with Roelof Swiers from Intershop, chairman of the expert group, indicates: "Many organizations that want to boost digital transformation face a number of difficult challenges, such as
- the strategic and budgetary agenda,
- the 'getting board members on board',
- breaking through clusters in your organization and
- solving the skills gap.
In this article and video, we mainly let the experts speak for themselves:
The key: C-Level Management
If the digital transformation of an organization is to succeed, it is essential that the C-level believes in it. The motto “show, don't tell” can help you. For example, travel with the CEO and CIO to China or Silicon Valley and take a look at what developments are made there. Continue to inform executives about relevant commercial events. Preferably keep it close to home, so that it becomes understandable and the potential impact on the business is really seen. Only by creating understanding and trust will the board be prepared to take steps that promote digital transformation.
Fred van der Sluijs (Rensa):"Value propositions and business models need to be redesigned. You need a CEO with ambition and courage. After all, changing a business model can lead to contraction before growth occurs. And what if the management does not (yet) believe in it? Van der Sluijs: "In three years’ time you will no longer be there. Digital transformation is not about digitizing processes, but about a thorough transformation of the whole organization, in which a completely different way of working will be established in all departments of the company.
What can help is not to place too much emphasis on a traditional business plan or ROI. An initial investment in digitalization often involves many uncertainties and risks. A carefully crafted ROI is not the most important factor in such an initial phase- it is the realization that transformation is necessary.
Subsection C-level: even more important
Convincing the C-level is one thing. But getting the sub C-level along is actually even more important. After all, they help the organization to actually change, that is where the projects and ideas finally are orchestrated. That does not always go without a blow. As an example: a B2B organization experienced 3 challenges: They wanted to implement a chat function, adjust the opening hours and centralize their communication. The chat and centralization were easily done, but the extension of the opening hours to be able to support orders in the evening, was a major obstacle. The internal organization did not go along with it, by framing it as 'things have been going fine for decades'. – Again: Invest in time.
Another major challenge for organizations is the current IT environment. Van der Veen (Aalberts Industries): "In order to really pick up digital commerce, transforming your organization and your processes is essential. We need capable people, not only for operating those systems, but also to accompany the transformation. Since the Industrial Revolution, there has been no greater challenge than digital transformation. We have always focused on products and production. Digitalization is a prerequisite for an organization to be able to continue to add value for its customers.
Van der Sluijs: "We want to break away from the current ERP systems in terms of commerce. We need a headless architecture, in which we bring all business rules to the front. This enables us to develop faster and react more quickly to changes in the market. Nanne Batelaan (Stiho) indicates that a user-friendly ERP can also work to your advantage as an e-commerce manager. It may be a strategy to get all the logic to your e-commerce platform and orchestrate everything online to serve your customers faster and better.
Many companies are structured in clusters. To conquer this inelasticity, you don't have to break, but connect them. Make sure that the problems of each cluster are addressed and then ask one simple question: how can digitalization help you and your customer with that problem? Use recognizable examples from comparable markets as inspiration. The subject then starts to live by itself.
By employing people who have an affinity to act as ambassadors for digitization, you will eventually create a snowball effect. Every employee within your organization must know the overall strategy and that every department remains involved in the process.
Not just new people with different talents and qualities are needed. The training of current employees is also a necessity. Huszar (Climate Control): "It is difficult to get the right kind of people on board.” Sjoerd Sipkema (Technische Uni) does not entirely agree with him. “Companies have good people committed to themselves, and they often carry out very specialized tasks in dedicated areas. The digital commerce playing field at large B2B companies, on the other hand, is much broader and more challenging for long-term employees with currently stable, and needed business processes." Everyone agrees that finding the right talent, be it new personnel or trained long-term employee, remains a big challenge.
In order to provide the necessary momentum for digitization, Aalberts has set up a steering group on their digital transformation. Huszar: "Our goal is not cost savings, but growth and innovation. This requires people with different skills. In addition, our own staff must be trained in this area.”
Rob Helderman (Royal Brinkman) adds: "The e-commerce team has involved the sales staff with online affinity in the e-commerce project. They were given specific targets to increase online conversion and soon, successes were celebrated. This is working well but it is time-consuming. You’ve got to invest in time.”
The experts agree that the skills gap can be filled by setting up a multidisciplinary team with different talents, such as marketing, sales, customer services, logistics and IT. If this team thinks outside-in - from the customer's point of view - then the ideas for new digital services that add value to those customers come naturally. Once this team is running smoothly, communicate that progress! You will see that other interested parties will be attracted by this.
Van der Sluijs concludes with a catchy quote from Theodore Roosevelt: "I dream of men who take the next step instead of worrying about the next thousand steps.”
On September 28, 2017, the expert group will meet again, this time to spruce on determining the KPIs for successful B2B digital commerce.
Are you active in B2B and responsible for digital commerce? Sign up as a member of our LinkedIn group B2B digital commerce. There are already more than 100 participants. Master classes are also offered to assist B2B organizations hands-on to digital commerce issues. Do you have questions or want a registration for a master class? Roelof Swiers.