Digitalization: the right approach for lasting success

By News, Technology

Digitalization is a complex undertaking. Unfortunately, this appears to be a well-kept secret, and as a result, digitalization is a laborious process for many companies. Often, they don’t achieve the set goals. The question is: What’s the right way to go about it and make your process succeed?

An interesting and topical research conducted by Gartnerreveals 6 points at which digitalization appears to go wrong: a conservative culture, sharing and collaborating too little, an organization that is not ready for digitalization, a talent gap, a way of working that hampers talent, and challenges involving change. All of these are recognizable obstacles that our IG&H consultants often come across at the companies which choose to work with us. All the more reason to have a close look at digitalization.

Doing ‘something’ with digitalization, but what?

“We need to do ‘something’ with digitalization.” It’s a frequently heard statement made by many company managements. This generic announcement has to do with the fact that many organizations have only just begun to discover that IT is a big part of their product. Some industries have even grown into true software factories – such as banks, which solely create software and algorithms. Virtually, this means IT is the only remaining product for them. In retail, growth continues steadily through e-commerce, and in healthcare, the digital component also keeps expanding. In short, automation is indispensable to everyone who wants to respond quickly to their customers’ demand. Of course, this is essential if you want to survive – or, even better, if you want to distinguish yourself!

It is good to realize this, but awareness alone will not get you far. For example, your current process design and way of working may be at odds with your digitalization plans. In that case, what are you supposed to do? Adjusting such matters is expensive and time consuming, and it often comes with risks. If you don’t handle digitalization the right way, your process will fall apart before you’ve had the chance to go through it from A to Z.

Knowing what’s going on

If, for example, your system isn’t properly documented, it will be difficult to digitalize it. Before you start with a transition towards digitalization, it is essential to be abreast of various aspects within your organization.

Many companies are dealing with legacy issues, which make it hard to quickly respond to user needs. Larger organizations that have gone through mergers and acquisitions, for instance, can easily work with 3 or more CRM systems. In such cases, you often don’t know exactly who your customers are. This makes it difficult to develop a good, central overview of your customers, which would allow you to utilize every opportunity and achieve true customer loyalty. Additionally, companies often lack insight into the productivity of and the value delivered by development teams.

If you want to develop towards a so-called Digital Factory, so ‘IT’ truly becomes the measurable factory of added value, you need to know such things exactly. Only then, you can correctly set up IT processes, select the right people (and provide teams with the right coaching to achieve objectives), and use proper tooling! The construction industry has embraced this approach years ago: those who design a bridge have a computer calculate the required strength of the construction. Manual labor is completely unacceptable, and in many countries – including the Netherlands – it is even forbidden. But when it comes to digitalization, many organizations go back to old-fashioned ‘manual labor.’ Remarkable, because as with a bridge, a lot is at stake here. Therefore, it seems more logical to use the right tooling. After all, this ensures that the construction rests on a solid foundation that won’t collapse after you’ve built the bridge.

What direction will you take?

After you’ve defined the desired goal, you need to determine what direction you and your company will take. The strategy is essential, as is the transition itself.

Before delving into this, it is important to realize that there is no 1 formula for success when it comes to digital transformation. Elements such as company culture and the need for change play a significant role. A retailer who still wants to exist in 3 years, for example, should really have their online branch in place. In some other sectors, the urgency is a little less high, which means there’s more time to handle digitalization.

Get to work enterprise-wide

Should IT be part of the business or vice versa? It is the central question of a discussion held within many companies. The answer is: it doesn’t matter. What matters is that you’ll only succeed if you truly work together. Eventually, there will no longer be a ‘business’ and ‘IT.’ They will converge.

Moreover, you should look at the data/analytics part: how will you measure and what data do you need for proper and timely control? Even better, how will you predict what may happen, and are you currently anticipating this? To this end, elements such as the right KPIs and dashboarding, which are often still highly spreadsheet centered, should be fully in order and automated…!

Briefly put, think carefully about how you measure. What you really need to track is the number of people who love to use your product! This is crucial. Unfortunately, not many companies judge themselves on this user adoption. A missed opportunity with far-reaching consequences, because ultimately, users determine your long-term success. If you provide a pleasant experience by optimizing processes using IT, you’ll secure your organization’s future. This is just as important as the quality of the product you deliver – the experience is part of your product or service!

How to go about it

A number of the issues discussed above can be tacked perfectly with the introduction of a Low-Code platform and an Agile way of working. As OutSystems is currently the best Low-Code platform, IG&H has decided to work with it.

With a Low-Code platform, you can build software faster and better. Like the name suggests, you need very little code. You largely model software the way you would model a bridge, car, or plane. The difference is that with this model, you subsequently generate the software with 1 press of the button. Moreover, there’s a level of flexibility: when you have specific software that you cannot yet model, you can add it manually later – hence, the word ‘Low.’

Furthermore, maintaining models requires less time than maintaining hand-written software. So with a Low-Code platform, you considerably lower your company’s maintenance costs, making more money available for innovations and improvements.

Organizations with legacy systems can keep using these sources through OutSystems, but get the opportunity to rationalize them in a phased and low-risk way. In the meantime, they already benefit from shorter lead times for new functionality andmodern, pixel-perfect user interfaces. Using these, they can support and improve the much-needed customer experience.

In addition, OutSystems offers the possibility of rapid prototyping. This is the quick development of prototypes without high costs, which often enables the delivery of a prototype within several weeks – very useful when you want to test new concepts in practice! If you combine rapid prototyping with a smart use of data analytics, you can quickly book results.

Using OutSystems, we help organizations make a successful transition to sustainable digitalization. All the points we’ve discussed in this blog are covered during the process.

Interested in what we can do for your organization? Don’t hesitate to contact me. You can also find us at the NextStep conference on October 8thand 9th, which IG&H will attend.

Enabling a strategic assortment renewal at a Dutch non-food retailer

By Casestudys, Retail

What they wanted
A big Dutch non-food retailer wanted to get a better grip on commercial processes to accommodate further professionalization of the organization. Therefore, a short-term strategic assortment renewal was needed. Its realization required a clear organizational structure, transparent end-to-end processes, and pragmatic tools. Additionally, the implementation of first-time-right store transformation processes should result in the rollout of the new store concept.

What we did
We designed a clear, complete organizational structure, including clear descriptions of jobs and responsibilities based on best practices in the market. Furthermore, we provided the design and implementation of end-to-end processes in close cooperation with middle management. In doing so, we focused on having constant insight into progress to enable monitoring and management. Quick wins were implemented right away. For example, we held daily stand-up meetings for operational control. We also realized simplification by introducing event classification, among other things.

What we achieved
Together, we have established a future-proof buyer-planner organization offering better grip on category management: the non-food retailer can react to the market proactively and has more control of closing stocks, revenue, and margins. In addition, first-time-right processes regarding the planning of store and shelf layout have led to an effective management of the flow of goods, resulting in a 95% product availability. We have also realized an end-to-end assortment renewal process. The result: a controlled assortment renewal of 30% in 2017, up to even 50% in 2018. Moreover, we have improved the quality of article data entry: the margin of error dropped from 60% to less than 10%.

What they said
“Thanks to IG&H, we have re-obtained grip on and control of key commercial and supply chain processes. This is crucial for achieving our revenue, margin, and stock-level targets.”

UMC: performance-driven care administration

By Clientcases, Healthcare

What they wanted
Solid business operations start with a well-performing care administration. Like many healthcare institutions, the UMC struggled with burdens: there were many correcting tasks for the care administration, registration tasks for specialists, control tasks required by the insurer, and change implementation tasks imposed by the government. To depart from all this, the care administration had to switch from stopgap solutions to improvement. The goal: timely, correct, and complete registration at the source. This would allow the institution to get in control and lay a foundation for horizontal monitoring, which means that the insurer performs checks beforehand instead of afterwards.

What we did
Together, we conducted a data analysis to identify the main sore points. Subsequently, we set up an audit program for improvement projects, which we rolled out to the departments. Then, we created a process design – new in terms of content – and set up the Lines of Defense model. Management information was organized using correct and supported performance indicators. Finally, we established a program organization with stand-up and day start meetings, as well as training courses.

What we achieved
With our help, the UMC has taken a major step towards departing from correcting tasks and creating an optimal chain of registration. We created a supported Lines of Defense model and ensured commitment to registration securities. Furthermore, we introduced a new way of working, tightening priorities, project activities, and the allocation of tasks. Also, the focus has shifted to transparent communications on processes and substantive matters. Moreover, openness and feedback have improved collaboration.

What they said
The Ministry of Health, Welfare, and Sport has made this project an exemplary case for other care administrations. At the Congres Horizontaal Toezicht Zorg (congress for horizontal monitoring in healthcare), the case was highlighted as an example of success. The client’s feedback: “In terms of quality, IG&H has done an excellent job providing methods that we can apply in practice. IG&H made a difference. It has been tangible in the solution they offered, but also in its reception and the way it works in practice. The organization has noticed a positive energy boost.”

Successful implementation of experiments into business

By Clientcases, Organizational transformation

What they wanted
This organization needed experiments to be successfully implemented into the business.

What we did
We introduced an Agile way of working. In addition, we provided coaches with training and guidance, teaching them and the teams a range of skills. Moreover, the standard innovation process was upgraded using clear steps for each stage.

What we achieved
The experiment teams’ delivery has become more predictable. Their ability to think ahead has improved, and they highlight complexity. Furthermore, both the business and partners come on board sooner and in a better way to prepare a smooth implementation stage.

What they said
Some client quotes: “I have become a more effective coach.” “We reflect on future important matters to a greater extent.” “IG&H left us with something truly valuable. This place is better than it was several months ago.”

Large Dutch bank digitalizes mortgage processes

By Banking, Casestudys, Clientcases

What they wanted
“Consumers demand speed and convenience when applying for or modifying a mortgage. Having insight into and control over the mortgage process is increasingly important in this regard. To remain competitive, we must respond to these needs. At the same time, we are faced with the challenge of complying with the ever-tightening (European) regulations. What we want is to be ready for a mortgage market that will change radically as a result of digital developments!”

What we did
As a forerunner in innovation, we use our proven approach to set organizations and the mortgage sector into motion. For this bank, we translated the view on source data usage into a new service provision concept and a setup of underlying processes. Then, we accelerated the implementation using our toolset, which we have started to build since the launch of our initiative ‘Handig!’ (Handy!). In addition, we ensured that the organization was on board by working in an Agile manner.

What we achieved
With our help, the organization has adopted a data-driven way of working. To better serve customers, it now uses data from reliable sources instead of paper documents. Moreover, consumers enjoy more speed and convenience. Submitting an application is simple, and they get a definite answer within one day 80% of the time. As a result, the decision on buying a house is an easy and fast one to make, which has led to an increase in revenue. Moreover, focus has been placed on efficiency and customer-orientation. Mortgage applications have increased by 20% in three months, while cost has decreased by more than 50%. In addition, acceptance has become much more reliable: the risk of fraud has reduced significantly.

What they said
“IG&H had the vision, knowledge, and experience to help our organization digitalize the mortgage process. We are now a frontrunner in a radically changing mortgage market, and we increased our market share by 10%!”

Six key success factors for initiating a large-scale mechanization project in retail

By News, Retail

More retailers than ever are taking the big leap into the world of mechanized warehousing. Though it might seem there are only success stories to tell, the journey is long and complex and the project risks should not be underestimated. Adopting a proven approach during the decision-making phase is therefore key to getting it right from the start.

In recent years we have seen several large-scale mechanization initiatives in the retail industry, and things are not expected to slow down any time soon. A growing pool of proven concepts – and low interest rates – have put the topic of mechanization high on the agenda of many retail executives.

However, initiating such a multi-year journey comes with a wide range of challenges. This two-part blog series will lead you through the key success factors, starting today with the things you need to know before giving the green light.

1. Understand the why
One of the fatal errors in decision-making is retailers taking the short cut and choosing to mechanize because “everyone else does”. Not only is this a non-factual argument, it will also proof a weak foundation for the long journey ahead. Understanding the true motives is a crucial first step to success.

In short, there are either tactical or strategic motives to mechanize your operation. Companies often focus on the first one, where they talk about cost reductions and warehouse footprint minimization. The real value however comes from the more strategic motives, though they are often harder to quantify: reducing the dependency on manual labor and being able to offer same-day delivery. Especially for retailers operating in the online domain ‘mechanization done right’ will offer a key competitive advantage.

2. Involve the entire board from the start
Large-scale mechanization projects are challenging, high-risk and multidisciplinary. The impact of these projects goes beyond logistics and therefore it is important to involve the entire board right from the start, preferably as a steering committee.

Success will only be achieved when every major decision is made in a robust way and consequences are thoroughly understood by the entire board. Dedicate sufficient resources to prepare important decisions and set up the required documentation for it.

3. Look far beyond the now, think 5-10 years ahead
Mechanizing an entire operation does not come cheap. Typically you need a longer period to earn back the investments compared to let’s say the more conventional manual racking and picking solutions. Knowing where your business will go meanwhile is therefore a tough nut to crack, but absolutely necessary to make the call.

So before you sit down with any system supplier, you need to make an estimation of your future volume flows, predict how peak patterns and promotions will develop and in what way the assortment will change. Move away from the logistics sphere and collect input from the Commercial Director and CEO. Build a spreadsheet that incorporates all of the above and share this with your short list of system suppliers to get a common understanding and talk the same language.

4. Challenge the system suppliers on their proposed solution design
For many executives initiating a large-scale mechanization project is often a once in a lifetime decision. It is therefore no surprise that system suppliers will have far more experience than you have. Nevertheless it is paramount to bring enough expertise and preparation from your side of the table when you start the selection workshops.

Even though any supplier most likely has all the best intentions, they are not an expert on the specific way you conduct your business. One particular example involves how to deal with peak demand. Since reducing or shifting peak demand may result in significantly lower investments in robots and steel, you should pay particular attention if and how the system suppliers aim to do so. Challenge them on their approach and verify if it is feasible from an operational and commercial perspective. Also evaluate the IT solution and see how the integration will work with the non-mechanized flows in your supply chain. Do not forget to get a clear understanding of the productivity levels and workforce requirements (for business case purposes) and allow for enough flexibility in the design (e.g. extension possibilities, manual workarounds) to handle volumes beyond the design year.

5. Build a solid case for change
With the input from the workshops the next step is to build a business case to see if the numbers add up. These calculations will be fundamental for the upcoming decision and the main reference during the implementation phase. Six lessons here:

  • Pay special attention to the manpower as it is the main benefit driver
  • Have a detailed look at the service and maintenance costs. Technical staff have higher wages and will make up a significant part of the total workforce
  • Evaluate a pessimistic growth scenario to see if mechanization is the right decision. This might not always be the case!
  • Focus on the business case for mechanization and leave any real estate decisions out. By including real estate in the business case you will not be able to evaluate the true payback time of mechanization
  • Get a true sense of the transition costs, including the cost of any possible lay-offs and double rent periods. Depending on the situation these costs can be significant, even a show-stopper when the case for mechanization is weak to begin with
  • Add 10% of unforeseen costs on top of all investments and one-off costs. Experience shows you will need it.

6. Leverage your project with an outside-in view
With increasingly more proven concepts in the industry, on many occasions there is no need to re-invent the wheel. Whether it is food retailing or fashion, most learnings about mechanization are similar regardless of the industry. Learn about best practices by visiting other sites and connecting with people who have been through the same process before.

If you follow all these key success factors, you are ready to take on the next challenge: implementation. In the next blog I will address the most important lessons to make sure you can bring your strategy towards execution.

About IG&H
IG&H has proven to be a key strategic partner in several large-scale mechanization initiatives in the retail industry, from online fashion to food and household.

With a proven track-record in driving the early stages of setting direction, through decision-making into the implementation phase, IG&H is the key partner for moving your business into the new digital reality of retailing.

New innovations are rapidly changing the game of omnichannel business

By News, Retail, Retail

Looking at the retail innovations and trends in Asia and the US, we see a breakthrough in the retailers-customer dialogue; it will change radically in the next few years! Most disruptive innovations are 100% technology driven and we see some are about to become mature enough to be adopted by mainstream retailers.

How to embrace and take advantage of these innovations to increase customer service, while reducing the inefficiencies of current omnichannel commerce?

[Click here to read the article]

Employee satisfaction and NPS increased within 10 weeks

By News, Pensions

Daily performance dialogue on customer goals leads to unprecedented collaboration.

The IG&H ‘IMPULS’ approach has enhanced employees’ ownership and mutual collaboration. As a result, both the service provision and the working atmosphere have improved strongly in a short period of time. This development has continued autonomously after the initial 10 weeks, thus laying the foundation for a continuous improvement culture at Loyalis. The balance between the ‘Hard’ and ‘Heart’ building blocks of the IG&H ‘IMPULS’ approach distinguishes ‘IMPULS’ from other methodologies.

Loyalis aimed to realize higher customer satisfaction (NPS). Analysis showed that internal collaboration and customer service needed to be improved to achieve this goal. Service provision to employers posed a challenge: substantial improvements had to be made in all areas. Their stalled execution resulted from the limited preliminary translation of the organizational strategy, which was due to a lack of ownership at several levels and due to insufficient operational control.

A successful transformation of the internal organization has been a crucial part of the solution. The ‘IMPULS’ method, used by and characteristic to IG&H, is based on the aforementioned ‘Hard’ and ‘Heart’ building blocks. Through our ‘Hard approach,’ we stated perspicuous overall objectives, set clear KPIs in collaboration with Loyalis, and provided a methodology that clarifies performances. The ‘Heart approach’ has allowed Loyalis to measure behavior that supports performance, encourage desired behavior, and discourage undesired behavior. As a result, the internal organization is back on track.

Way of working
The bottom-up approach used by IG&H has immediately resulted in better performances – by allowing employees to take more ownership and by contributing positive energy and inspiration, but also through better collaboration and a focus on customer service. The performance dialogue has become key to continuous improvement at Loyalis. Teams are now learning to analyze and solve challenges in an 8- to 10-week time period, in addition to acquiring and encouraging feedback (skills).

“Extremely professional and results-oriented. I am a warm and active supporter of IG&H’s working methodology.” Mario Bakker, Marketing & Sales Manager, Loyalis

In ten weeks, an initial IMPULS wave was performed within Loyalis. Employees were provided with assistance and guidance to enter into a performance dialogue by collaborating in a different way based on sharp objectives. After these ten weeks, measurements have shown a strong increase in both customer satisfaction (NPS) and employee satisfaction (ENPS).