In a constantly evolving world, where digitalisation is often presented as the key to success, many companies embark on digital transformation projects in the hope of improving their competitiveness. However, it is crucial to remember that digitalisation, although necessary, can in no way replace operational excellence. Before investing in advanced technologies, companies must first ensure that their internal processes are optimised and capable of supporting these new tools. In other words, companies' priority should not be digitalisation in itself, but operational performance.
The Illusions of Digitalisation
Digitalisation promises efficiency gains, better data management and greater responsiveness to market demands. However, these benefits can only be fully realised if the company already has robust, well-structured processes. Let us take a few concrete examples to illustrate this point.
Inventory Management: A Process Problem, Not a Technology Problem
One of the recurring problems in companies is inventory management. It is not uncommon to hear executives complain about excess stock, hoping that an ERP (Enterprise Resource Planning) system will solve their problem. However, an ERP, however powerful, cannot compensate for inefficient or poorly designed ordering processes. The problem of excess stock is not technological, but lies in inaccurate demand forecasts, poor supply management, or a lack of collaboration between departments. Without a thorough overhaul of these processes, implementing an ERP will only automate an existing problem, or even amplify it.
Order Generation: Beyond the CRM
Another typical example is that of companies struggling to generate orders. “We do not have enough orders; our CRM (Customer Relationship Management) is not working as expected.” This is a common complaint. However, a CRM, although powerful for tracking and organising customer interactions, cannot solve fundamental problems such as poor commercial positioning, uncompetitive prices, or an offering ill-suited to the market. A CRM helps to maximise existing sales opportunities, but it does not create demand where none exists. For the CRM to be effective, the company must first ensure that its commercial strategy is sound and that its prices and products meet the market's needs.
Production: Efficiency First
Slow production is another frequent challenge. Many companies invest in planning software in the hope that it will solve their lead time problems. Yet if production processes are inefficient, suffer from bottlenecks, or if production lines are poorly organised, planning software will only optimise failing processes. It is essential to first identify and correct inefficiencies in production – whether the layout of the workshop, employee training, or workflow management – before attempting to automate them.
Digitalisation: A Tool at the Service of Operational Performance
Digitalisation should not be perceived as a miracle solution, but as a tool for amplifying the efficiency of an already high-performing company. It is crucial to understand that technology, although essential, cannot replace well-designed and well-executed processes. A company that neglects its internal operations and focuses solely on digitalisation risks seeing its technology investments produce disappointing results.
The Risks of Poorly Prepared Digitalisation
One of the greatest risks of rushed digitalisation is the “garbage in, garbage out” effect. If a company's processes are flawed, these flaws will be amplified by digital technologies. For example, poor data management can lead to erroneous decision-making, even with the most advanced systems. Moreover, excessive reliance on technology can divert attention from the real operational problems that require human intervention.
The Importance of Training and Adaptation
Training is another crucial element of operational performance. Before digitalising a process, it is essential that employees understand not only how the new tools work, but also how these tools fit into their daily tasks. A technology, however advanced, is useless if it is not used correctly. Companies must invest in continuous training to ensure that their teams are able to make the most of digital tools.
In conclusion, before embarking on a headlong rush towards digitalisation, it is crucial for companies to ask themselves the following question: are our operational processes optimised to achieve the performance we are aiming for? If the answer is no, it is time to review your working methods, and it is only once this foundation is solidly established that digitalisation can reveal its full potential.
Xavier Schuster
Consultant at SXE Consulting. Industrial consulting firm based in Luxembourg, 25 years of experience in operational excellence.
View profile →