Under the impact of the digital wave
No business today is immune to changes in the digital age, which makes the management to be rethought under a new perspective. In this process, the technology area of companies can no longer be a silo, but must be part of the strategy.
January-March | 2017Companies and consumers have changed habits and processes, began to inhabit virtual villages and explore new horizons. In this environment of fast and intense changes, the competitors who have greater capacity for adaptation and rapid deployment of innovative ways to manage their business in the digital age will have a step ahead.
“We are at a surprising moment in history, in which technology has changed from a supporting role to something that is in the fabric of our personal lives and in all business processes”, says Mike Brinker, Deloitte Digital global leader. “No business is immune to changes in the digital age”, he sentences.
In this evolving universe, according to Brinker, the technological cycles are shortening, and the pace of change is exponential. “Every business has to become a digital business to continue to compete effectively”, he warns, adding that this means embracing cloud computing, analytics, mobile devices, Internet of Things, artificial intelligence, digital marketing and other related tools. “This is truly an exciting time to be a leader in the digital space.”
Matthew Guest, Deloitte United Kingdom’s Digital Strategy director, evaluates that the progress of companies to join in the digital world is still relatively slow. Author of the “Building your digital DNA – Lessons from digital leaders” study, Guest highlights that most organizations operate under the management model he classifies as “Tactical”.
“These companies have discrete innovation functions, digital marketing and digital technology teams, but do not have their goals aligned to a central strategic vision”, the executive warns.
In practice
In a context so dynamic, willingness and support to review processes and practically reinvent itself is a must. This is what happened at Vivo. In May 2016, the Board of Digital Transformation was created in the company, under the command of Sandro Simas, after a study that involved the user experience with the company, in both traditional and digital channels.
“We have created new work models, supported by Information Technology and Business studies, so that we could align the whole company to a single goal, which was to improve the communication with the user”, says Vivo’s Digital Transformation director.
The executive says that, in this new world, it is not yet possible to have all the answers. But what most importantly happened with the integration of areas is that all started to have freedom to ask more, measure and share results.
“Many areas were not used to answer strategic questions to others, and this became a practice more and more usual. In addition, we built partnerships both internal and external to innovate processes and accelerate the digital”, says Simas.
The design of the space and the strategy of Vivo’s Board of Digital Transformation, according to Simas, was inspired by European companies, in fintechs (technology companies for the financial services sector) that stood out in the market and, of course, by Google and Facebook, which innovated in working environments favorable for the creation of unusual ideas that influenced many organizations globally.
“It is an environment that is separate, totally different, open and ready to receive all areas and integrate them through the exchange of information, data and strategies. The idea is to disseminate this new culture”, he says.
Build a team that has this mission demanded, Simas says, to gather a set of skills related to the development of digital platforms, among which, information analysts able to build indicators with excellence, business analysts, digital marketing professionals and usability architects.
“With this, our team has gained a significant contingent of young people. They brought a new working method, characteristic of this new digital age generation”, he says.
IT as a business partner
Asked how is the area of Information Technology (IT) in this digital development, Simas, from Vivo, is objective: “IT is an area like any other. It is more a business area, integrated into the company’s strategy and that houses the Board of Change Processes. Everyone changed together. Restrict changes is the worst mistake.”
Mike Brinker, from Deloitte Digital, says that IT is at the heart of the changes that are leading the digital transformation. For many years, according to Brinker, IT was too focused on the reliability, stability, scalability and in all other dimensions of a stable and predictable business.
“In the past five years, we have seen IT transforming to become a stronger business partner around change and innovation. This partnership is essential for the technology, decisions and reliability strategy, but the business needs to be an equal partner in the equation”, he adds.
Matthew Guest, from Deloitte, complements suggesting that IT has to be conceived and directed to the results to the business, and not measured by the efficiency of technology operations.
“I suspect that IT departments can end up spread in most organizations over the next two decades, because it makes the results easier to monitor and manage.”
Deloitte's global study shows that 28% of interviewed technology leaders rate their IT areas as below average in a digital skill set.
The 2016-2017 edition of the “CIO Survey” study, conducted globally by Deloitte, shows that the Chief Information Officer (CIO) still has a long way to go to develop and improve his digital skills. Over a quarter (28%) of 1.200 interviewed CIOs from 48 countries rated their IT areas as below average in a digital skill set.
“The development of IT skills and leadership competencies is a direct result from the ‘adaptation’ or the business environment”, the Deloitte’s report shows, in line with the new age, proving that the success of digital management is not necessarily a privilege of the most powerful, but, in particular, of the most capable and resourceful.
Disruptive age
The 2016’s research “Aligning the Organization for its Digital Future”, deals with digital business and was developed by Deloitte in partnership with the Massachusetts Institute of Technology (MIT). The study brings some important insights, among them that the first great evidence of maturity in organizations is integrating digital and corporate strategies.
According to the research, companies with a lesser degree of digital maturity still treat their initiatives and strategies as objectives additional to or separate from the main business. For this reason, it is common to find problems in the course of transformation actions because there are no other areas of the company prepared to act and support the digital models.
“The technology area can no longer be a silo, but must be part of the strategy.”
Alexandre Arello, Deloitte Digital director in Brazil
Alexandre Arello, director of Deloitte Digital in Brazil, warns about an easy point, but that needs to be remembered: “Everything begins from a market need and, from there, companies must be prepared to meet it. And more: anticipate this need.”
First of all, highlights Arello, in order to offer services and products to this new world, with increasingly empowered and demanding actors, it is necessary to first transform itself to be assertive. “The customer is who decides and has the power to demand and seek value aggregators. To offer the paths to the entrance into the digital age or even facilitate this journey of companies, the whole chain needs to change”, says the director.
For Arello, IT today has to be part of the business, considering the digital. “The technology area can no longer be a silo, but must be part of the strategy. And the business needs to be rethought under a new perspective, driven by technologies that provide facilities capable of transforming the business.”
Arello says that today it is not about technology for technology – it is about the means to facilitate innovation. The business meetings no longer happen only with the IT area, and the speech revolves around the business, the innovative opportunities and the transformation.
Digital cradle
With only two years in the market, the Agrosmart startup was born in the cradle of the new age and, therefore, a digital heart beats strongly in its strategy. The company offers services for plantation monitoring under the concept of smart farming and connected farms with a platform and an application that, in real time, monitor more than 14 environmental variations, such as rain, soil moisture and other.
CEO and one of the founders of the company, Mariana Vasconcelos, is only 25 years old and shows the advantages of being digital. “All our processes were born digital. Being digital helps to be global. Everything here is online, which provides a lot of agility. About 90% of our customers receive online interaction and services. We support our strategy with blogs and a lot of content on the site”, she says.
As the essence of Agrosmart is digital, the CEO says that the company sought not to fall into the temptation to acquire a sea of technologies, implementing one for each activity. “This is a big mistake. The important thing is to invest in integrated solutions. This also facilitates the integration of business areas. The team works in collaboration. Here, IT is not an area, it is present in all areas, as a facilitator for creating services and differentiated strategies.”
The achievements gained the world. Mariana was called to participate in a program at Singularity University, NASA’s school of innovation (USA), representing Agrosmart, besides having been invited by Google to be part of the Blackbox Connect program and compose a team of 18 women leaders from 14 different countries.
But it is not all flowers in the digital berth. Considering that the world is not fully digital, the CEO has to adapt processes that become hybrids, with the traditional and digital part. “Our biggest challenge is to be in line with all relevant legislation, bearing in mind that not always the processes are all digital, becoming an obstacle to productivity.”
Challenge of being in compliance
The concern of Mariana, from Agrosmart, is not uncommon, according to Fernando Silva, Director for Brazil of the North American company Vertex, a provider of tax software and services to automate corporate tax processes.
According to Fernando Silva, the movement to a technological solution with the proposal to eliminate the tax world on paper began in 2007, with the Digital Bookkeeping Public System (SPED). Although not yet fully consolidated, SPED advances each year – an aggravating factor is having as its object the complex scenario of taxes in Brazil, with constant changes in the local tax systems.
“The financial area of companies suffer for having to deal with a high volume of tax rules, which present themselves in different ways by different states. To be in compliance is a major challenge”, he says.
The importance of digital evolution in the relationship between company and Tax Authorities was of fundamental importance to enforce transparency and to facilitate the crossing of information, halting or hampering fraud, according to Silva. “The obligation to meet tax requirements helps companies to improve their performance in the digital area.”
Modernize the management, however, is not an easy task; it requires disruption, in particular in the company culture. As Guest, from Deloitte, said: “For a full transformation, the digital has to be in the DNA of the company’s culture.” Thus, everyone has to change.