Are there real digitization indicators?
Digital transformation is an indisputable reality today. SMEs, government, freelancers and large companies are devoting effort and budget to this goal.
It is true that it is difficult to distinguish whether this effort is because there is a belief in digitalization and they see benefits or purely the fear of being left behind.
Path to digitization
For some people, putting a PDF on a screen or using Excel is already digitalization ( https://kapture.io/2020/10/26/excel-no-es-digitalizacion/), but this is a direct reflection of the digital illiteracy we suffer at the industrial level.
When you decide to embark on this path at the entrepreneurial level, there is always a race of obstacles that must be overcome to reach the final goal. One of the biggest obstacles for me, which occurs before deciding which career to pursue, is the fact of calculating the economic viability of the project.
In all companies and especially in large multinationals, it is mandatory to justify the necessary economic investment(Capex) of the implementation of any digital system and to calculate the relevant ROI.
The implementer must calculate metrics, presentations… and convince those who have the economic power of the viability of the project, it is a tedious and thankless task and for what we will see below, also inaccurate.
These metrics are almost always focused on classic industrial parameters such as:
- Machinery
- Staff
- Material
- Processes
It is interesting to see that the general tendency when it comes to justifying digital investment is to use the parameter of staff reduction. Many times this justification does not reflect reality, since there is no reduction in staff after implementation.
Why do we do it?
Our industrial thinking makes us visualize in the short term that with a digital system, what used to take me 1 hour to analyze, now I have it immediately; what used to take me 1 hour to process manually, now I have it automatically. This vision leads us to use time savings (price/hour) as the star indicator.
What factors are involved in digitization?
Personally, I believe that the calculation of time savings is a partial criterion, but it is not sufficient to extract all the KPIs needed to make a sound decision. It is not because the benefits of digitization go beyond a possible reduction in personnel.
Conclusion
Other factors must also be taken into account, including:
- Having structured, consistent and reliable data
- Strengthen and facilitate data capture
- Standardize processes
- Facilitating training at all levels of the hierarchy
- Implementing the most efficient change management
- Ability to create new metrics or analyses
- To have an image of the process in real time
- Enhancing scalability throughout the value chain
These factors are inherent to digitization and are often not considered when deciding your strategy.
We need to update and create digital indicators that support this vision in order to overcome ignorance and understand once and for all the scope of digitalization.
Biel Bulbena Pujol
02/27/2023 Kapture.io
