Digitalization is not a new concept, but what does it really mean in the context of your business? Here, we break down the definition and give three tips that will optimize your business digitalization journey.
What is business digitalization?
First, let’s start by clarifying the difference between digitization and for those who are unsure.
Digitization is the act of converting physical documents or paperwork into digital documents. Scanning a paper invoice and uploading it as a PDF is an example of digitization.
Digitalization is a more in-depth transformation of a business model towards using digital processes rather than analogue ones. For example, a company deciding to turn the handling and processing of all financial documents digital would be considered digitalization.
Business digitalization is the integration of technology that transforms the way organizations operate across their different areas, services and channels, with customers and other stakeholders. A true digital transformation process goes beyond buying and using a new tool or software; it requires an honest commitment from the entire organization to evaluate, challenge and reconfigure business processes at a path and pace that work for that company, their clients and their suppliers.
Benefits of business digitalization
While there are myriad benefits to digitalizing your business processes, they vary depending on your company objectives. But whether you are transitioning from paper to e-invoices, from traditional goods sourcing to e-procurement, or digitalizing your end-to-end supply chain management, there are certain benefits digitalization always brings when done right:
Lower costs
Less manual work
Fewer errors
Visibility over company spend
Control over cash flow
Data-informed decision making
How can these be achieved? Keep reading for three tips to help you set the foundation for a digitalization project that will benefit both your company and your business partners.
“A true digital transformation process requires an honest commitment from the entire organization to evaluate, challenge and reconfigure business processes.”
3 tips for getting started with digitalization
Tip #1: Identify where there is room for improvement
Organizational changes can sometimes feel overwhelming, and understandably so.
Our advice is to examine one process, understand where there is room for improvement, and start your digitalization journey there.
Do you still receive paper invoices from your suppliers? Even if you work with few paper documents and mostly PDFs, there is a lot of room to develop a truly digital business model. The tedious challenges of manually entering data, verifying invoices and handling and storing paper or PDFs can be replaced with automated e-invoicing directly within your ERP system. You’ll see lower costs, less manual work, increased straight-through processing, and far fewer errors come to life before your eyes.
Digitalizing these tasks significantly increases visibility over company spend to help your finance department make more informed decisions that benefit the entire organization. All your invoice data is saved in one place so you can conduct searches and comparisons that are not possible with piles of paper.
Tip #2: Get your organization on board
Once you have identified areas of improvement, you must get your whole organization to support your digital business endeavours. Prepare a detailed business case that shows what the company as a whole will gain from this digitalization project.
Beyond saving money, time and resources, digitalizing your financial processes lets you collect and access quality data from orders, invoices, and other documents. This makes it possible to identify trends, patterns, pricing insights, and buyer preferences. Being able to see “the bigger picture” of your company finances will help all department leaders make informed decisions now and in the future. Fully informing the decision makers of your company of these benefits will give you a value proposition that is hard to deny.
Tip #3: Integrate with your existing systems
While embarking on a digital transformation project, make sure not to create more problems than the ones you aim to solve. Do not get trapped in a web of disconnected systems!
When investigating options, look for a service provider that can easily integrate with your current ERP or other accounting system. By making sure your digital business processes do not need any system or format changes, you can go digital much faster and make the most of your transformation project.
This text was adapted from its original version, an article written by Pagero as a guest blogger for our partner Unit4.
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