Hendrik van den Berg is the Founder and Managing Director at Neos IT Services. Having founded the company in 2005, Hendrik and his diverse team have transformed Neos into a thriving business.
I recently met with Hendrik to have a detailed discussion of business transformation and what it entails. The most fascinating insights from the interview revolved around the role of technology and cultural change in the transformation process.
What does business transformation involve?
The rhetoric of business transformation is dominated by the technologies involved, and rightfully so. Through innovations like robotic process automation (RPA), businesses are able to operate faster and more efficiently, while reducing costs.
At the same time, digital platforms such as websites and social media allow businesses to connect to their audiences more easily. However, these colourful visible changes mask the true power of business transformation, which indeed involves so much more beneath the surface.
Business transformation is about much more than software upgrades or new ways of communicating. Business transformation represents a holistic change that impacts the whole organisation, which must shift its methods to accommodate the new system. As Hendrick puts it, when organisations talk about being agile, “they actually mean IT needs to be agile, but agile IT means that the whole organisation needs to be agile.”
Although technological advancements are the main external driving force behind the need for change, their adoption is just a small part of the larger process. Technology makes transformation possible, while at the same time forcing complementary changes in culture and workflow, as it opens the door to entirely new strategic opportunities. These in turn allow for new approaches to innovation based on processing power, new possibilities for customer interface based on data analytics, and new business models based on customizable production. Indeed, business transformation is never just a single event; it is a continuous reinvention of what is possible, based on increased operational agility.
Technological advances, however, also increase the potential for businesses to experience disruption from the outside. Organisations will therefore need to be able to make accurate, forward-looking decisions with their competitors in mind. Data analytics and AI can each play a vital role in helping businesses prepare for changes in their markets. These tools allow businesses to forecast their future needs and make the right strategic decisions, enabling them to cope with key industry changes and stay competitive through a fast-moving economy.
Like Grant Thornton, Neos are onside business partners, working side by side with clients to drive positive change. “What we offer to our customer is basically to be with them on the journey – because it is a journey, it is not just a one-off transformation that we are talking about here,” Hendrik says.
There are three main types of digital transformations.
- Operational transformation is the basic level of digital transformation. It introduces new technologies to either solve old problems or enhance current processes by making them cheaper, faster, or better.
- Core transformation involves fundamentally changing the way a business carries out its main operations. Netflix’s change from mailing DVDs to having an online library is a prime example.
- Strategic transformation changes the essence of the company itself, such as when Amazon went from an online bookstore to a technological powerhouse providing movie streaming, cloud-based computing, web hosting, and many other services.
For many organisations, the best kind of business transformation combines operational and strategic transformation. Operational focuses on shorter term changes, whereas strategic prepares businesses for the future. Together, the two procedures can put a company on the right path, and ensure that it has a long-term plan for success.
Big data and business transformation
In the age of constant connectivity and digital transformation, businesses will have the ability to monitor how their customers think and how their products are used. This information can be hugely valuable, but understanding and interpreting it means sifting through huge amounts of data. A central objective of digital transformation therefore needs to be focused on putting the right resources in place, in order to convert mass quantities of data into insights that can point the direction forward for the company.
With the right tools, culture, and training in place, employees will be able to handle the influx in data and learn the right lessons from it. But if the human side of business transformation is neglected – if leaders just assume that their employees will be able to handle everything on their own, without clear guidance and support – then transformational projects will fall short of their potential.
As Hendrik points out in our interview, the success or failure of any given digital transformation effort typically depends on the approach and the level of preparedness coming from the top of the organisation. For transformation to be successful, it is important that leaders within the business help their employees understand what is going on, and convince them to actually buy into the changes. “Leadership is about living a culture that you expect your teams to be living as well,” Hendrik says.
The executives within an organisation need to understand that transformation can only work if it starts with them. Leaders have to let go of some power, and place trust onto the employees, in order for the necessary cultural change to take root. Stepping back may go against the instincts of some leaders, because it involves letting go of the control they are used to – but with adequate training and preparation, it unlocks great potential within any group of employees.
Hierarchies are slow and have the tendency to create informational bottlenecks, but independent and proactive teams of employees can complement each other’s work smoothly as long as avenues of communication are open to keep everyone on the same page. Many companies find this transition to be a particularly difficult one, and therefore turn to outside guidance to help them establish a productive method of maintaining the right balance of efficiency and creativity.
Finding the right place to start
Although business transformation in today’s economy generally follows a standard pattern, differences nevertheless emerge in implementation because there is never one solution that is an ideal fit for every company. A large part of the initial challenge involves truly understanding which area of your organisation needs transformation and training. In other words: Where exactly can value be added?
Because technological capability advances so quickly, it is impractical to rely only on in-house resources to completely digitalise a business, train employees, adjust workflow, and map out a path forward. The scope of options and possibilities has become so large that external guidance is all but mandatory.
Indeed, Hendrik makes a similar point about Neos itself. “We focus on the technology, but even so, there are certain areas where we have to work with partners because it does not make sense for me to try to teach my technical engineers to be able to handle all these different technologies,” he says.
By respecting the power of technology, the importance of organisational culture, and the possibilities enabled by advances in data analytics, customer communications, and business processes, company leaders and external consultants can bring about true modernisation in all areas, letting the organisation stay competitive for years to come.