Digital Transformation

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Digital transformation is gaining a lot of ground in recent times as companies try go more digital. So, what is digital transformation? What does it mean?

Digital transformation means transforming the business processes using digital technologies. Transformation is a continuous process and is not a one time activity.

Transforming can be further explored as below:

  • Create business processes wherever required 
  • Re-engineer processes to eliminate non-essential and non-value adding steps
  • Add newer steps for creating value
  • Streamline the process flow to increase efficiency   

Digital technologies can be understood as technologies that use digital data

Now, how can we have bring about digital transformation?

Digital Transformation aims to create value in each stage or step of a process. For this value should be first created for the overall process. This value should also need to be measurable so that analysis can be done. For making it measurable, it is important that the outcome of each activity is recorded.

Let us see how we can bring a simple digital transformation for inventory management in the neighborhood kirana store which does all transactions manually. Let us take buying of products by the customers and the shopkeeper in context and go step by step.

Map the process for customers buying a product, eg. soap. The process consists of 3 main parts 

  • customer requesting soap, 
  • shopkeeper searching and fetching the soap from inventory and 
  • the transaction of shopkeeper giving the soap and customer receiving the soap
  • the transaction of shopkeeper informing that the soap is not available
Collect the data for all these steps in a system. The system can be a simple excel sheet which has the following details-
  • Total soaps
  • Soaps sold per transaction 
We have measured what we want to solve and brought in a simple process that will ensure that the shopkeeper knows when his inventory runs out. This also ensures that the time of the shopkeeper and the customer is saved. There could have been a loss of revenue if the customer went empty handed. By replenishing the inventory the shopkeeper can be better ready and retain customers and business.

How can we further improve this? 

Time is wasted in entering data into the excel sheet. So, how about using bar code scanner that automatically identifies the product and throws up the details in them system? The system can also update the inventory in case of a successful sale. Bar code can also be used for all products. We can create scale with this approach. So, this is the next step of transformation. 

Once we have a system that captures all of this and informs the shopkeeper about the inventory of products, we can extend to the process of replenishing the inventory. Automatic ordering of inventory to the concerned wholesaler/distributor can be done. This can be done through SMS, E-mail or some other technology.

Thus, we see that transformation is an on going process that creates value at each step.

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