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December 1, 2023

How to Drive a Successful Digital Transformation

Carlos Moreira, Head of Digital Transformation at Sumol+Compal, shares his learnings, best practices, and experiences from more than ten years in the digital transformation space.

What is the Greatest Barrier to Digital Transformation?

The main obstacle to digital transformation, Carlos explained, is the resistance to change. Even with a clear vision and investment in new technology, the success of a transformation relies heavily on the people and culture within the organization. Carlos has observed that many change programs fail because the culture of the organization is not taken into consideration. Implementing changes is often more difficult than simply developing prototypes and testing new solutions. It is important for organizations to recognize the magnitude of this challenge and to have a change management program in place to address it.

Is a Change Management Program the Best Way to Address This?

To ensure the success of a digital transformation effort, Carlos advised taking a holistic approach that goes beyond simply implementing a change management program. It is crucial to identify current pain points and align them with the company's long-term strategy, and to allocate sufficient time and resources to building digital capabilities. Additionally, building goodwill within the organization and maintaining a strong connection to ongoing business operations can facilitate the implementation of changes.

"That's something we are doing at Sumol+Compal and we are taking our time with it, and our board members recognize the value within these initiatives, as well as the people around us from multiple departments. Yes, it's taking time and it's not as sexy because the revenue or return on investment is the same, but it will be. We are pushing for a little further down the road and this we believe will help us tremendously."

Carlos Moreira -
Head of Digital Transformation at Sumol+Compal

What Innovations are Catching Your Attention?

Before diving into the technology itself, Carlos explained how it is essential to consider the proper approach to implementing new trends within an organization. While it is encouraging to see individual departments taking initiative to experiment with technology and innovation, it is important for these efforts to be cohesive and aligned with the overall strategy of the organization. Technology has the potential to benefit an organization greatly, but it is crucial for leadership to understand and utilize these capabilities to their full potential. Middle management is often more attuned to the potential of technology, but it is important for leaders at all levels to be aware and educated about how it can be leveraged for success.

"This means that there is a need for a paradigm shift where everyone has a clear understanding of the capabilities, so that the company's strategy is indirectly influenced by the capabilities of the technology. Where I see the role of technology and digital transformation is, in fact, the core of coordinating these efforts and acting as a clear enabler or potentiator of technology within the organization across multiple departments. Each department has its own issues and pain points, and you really need a third party that looks at each of the problems and is able to connect the dots and present that to the board members. From what I'm seeing right now, at least in large organizations, which is my reality, it's not really about VR or AR. It's much more about AI and process mining; anything related to optimization, efficiency, and automation of existing processes. These may not be the sexiest topics, but if done correctly, they can yield fantastic results."

What is Your Advice to Leaders Embarking on a Digital Transformation Journey?

In his work, Carlos frequently references the concept of ambidexterity. In order to effectively navigate digital transformation, organizations must operate with two engines: one that maintains and optimizes current business processes, and another that actively seeks out and explores new opportunities. This exploration should not be confined to traditional research and development, but rather should encompass all potential avenues for innovation within the organization's value chain.

To successfully implement these innovations, it is essential to have a dedicated unit for exploration and a structured approach for integrating them into the organization. Maintaining a clear separation between these two engines can prevent new business models from disrupting existing ones, but this requires a departure from traditional structures, cultures, and processes.

“Business as usual is usually a well-oiled machine that is optimized to deliver a specific outcome. Let's use Sumol+Compal as an example. We have five factories that are focused on high volumes. Our plant managers are focused on efficiency, high volumes, and low product rotation in order to achieve the best possible outcomes from our machines. However, current trends in the food and beverage industry involve personalization and a limited series of products, which is on the opposite side of the spectrum. It's unlikely that existing business as usual will easily accept this new reality and be happy about it because their objectives are not aligned with it. There is nothing in the business that indicates this is a good thing. People need to recognize that the other engine needs to be close by, but not entirely on top of the existing structure. I strongly suggest that anyone interested in this topic look into Clayton Christensen's work on this.”

When is Your Newsletter Coming?

The newsletter will cover the unique approach that Sumol+Compal is taking during the initial phase of their digital transformation. Carlos will share details on the various methodologies, tools, and frameworks they are using, and invite insights and critiques from readers. The hope is that the insights gained from this case study will be valuable to others embarking on their own digital transformation journeys.

"I believe the most significant aspect of what we did was the ability to involve the entire company. We conducted workshops with every department in the organization where we were able to sit down and listen, and complete specific exercises to understand how people view the role of technology, the role of their own future within the company, and share how digital transformation does not have to be considered a bogeyman that will steal your job. The way we dealt with this was by targeting existing pain points and conflicts and trying to be a helpful presence. This is what I will be sharing in my next article."

The Takeaways

  • 1.

    One of the main obstacles to digital transformation is resistance to change, which can be addressed through a change management program.

  • 2.

    To successfully implement digital transformation, it is important to identify current pain points and align them with the company's long-term strategy, allocate sufficient time and resources to building digital capabilities, and maintain a strong connection to ongoing business operations.

  • 3.

    It is crucial for organizations to approach new technology trends in a cohesive and aligned manner, with leadership at all levels understanding and utilizing technology capabilities to their full potential.

  • 4.

    Carlos sees AI, process mining, and anything related to optimization, efficiency, and automation of existing processes as being particularly important for large organizations in the digital transformation space.

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