The digital workplace is transforming how directors and employees work together, how customers are supported, and ultimately how organisations do business. Seeing the fast speed of technological progress, you might assume that the world’s digitisation is already far advanced. However, this assumption is inaccurate: In 2017, the business world was still less than 40% digitised, according to a McKinsey research. It shows that in some industries such as the media, retail, and high tech industries, digitisation has taken deep roots, while in many other industries the forces of digital have yet to become fully mainstream. The World Economic Forum (WEF) expects 60% of global GDP to be digitised by 2022, and that what today is sometimes referred to as the ‘digital economy’ to be fully merged with the ‘regular economy’ by then.
Digitisation takes centre stage in our everyday life: we write emails, prepare our documents and presentations on our computers, and use digital collaboration tools in order to work more efficiently with our colleagues. But why, then, is the penetration of digitisation still so low? To fully answer this question, let us quickly remember what digitisation actually means. According to the Business Dictionary, digitisation is the 'conversion of analog information to digital form so that information can be processed, stored, and transmitted through digital circuits, equipment, and networks'.1 Hence, digitisation converts information from a physical format into a digital one.
Most organisations have already embarked on the digitisation journey, but the majority still find themselves in a hybrid state between a digitised and an analog way of doing business.
The same applies to directors who are used to working in the analog era, and are now finding it hard to adapt to new technologies. Thus, most businesses and industries still have a long way to become fully digitised. And, considering how fast new technologies are emerging today, it will always be an arduous challenge for leaders to keep up with the latest digital trends.
In order to illustrate that ongoing journey, we will now present two examples that show why many businesses are still far from being fully digitised. The first example outlines how many financial service providers still use physical record management and interact with their clients through paper-based records and processes. Later, we demonstrate that many business leaders, from top management, such as CEOs or CFOs, to directors who are part of the organisation's boards, still have a long way ahead to fully digitise how they prepare and run their leadership meetings.
Financial sector providers, including both banks and insurers, still rely heavily on paper-based client interactions. A case study by Deloitte made at a large retail bank showed that every new account opening generated around ten pages of printed paper. These documents were then physically transported to a centralised processing hub, where a back office quality control was conducted manually in order to ensure the banks’ compliance. Later, the records were stored and sometimes remained there for years due to legal regulations, which meant rising warehouse costs. And once the documents were not required anymore, someone needed to find the copies and destroy them. All in all, the paper-based interactions with its clients and the warehousing of the physical documents was expected to cost the retail bank above 22 million Euros a year.
Seeing the significant costs resulting from analog warehousing, you might wonder: why did the retail bank not act earlier and implement a digitised solution? This real-life example perfectly showcases the problems of digitisation processes. Leaders are often so focused on daily operations that they can hardly ever look beyond existing processes and consider more strategic objectives. What is more, there is often a 'we have always done it like that'-mentality and the associated costs are accepted. However, the journey of change to digital records processing requires important decisions from business leaders. In a first step, they need to fully understand the problem and map how the transition to digital should be done. Then, they have to define an initial investment for digital storage banks and choose an adequate software. And, ultimately, they need to find a way on how to adapt and train staff in order to get them ready for the digital journey.
In the case of the retail bank, directors took responsibility and pushed for the digital warehousing of customer documents by means of a software. The bank not only increased productivity and reduced the costs of its record management by around 65%, but it also minimised its compliance risks and improved information quality. Eventually, this also led to an enhanced customer experience.2
Leadership meetings are the second example to showcase a slow-moving digitisation process. Every business leader knows that meetings of the executive committee and the board of directors are absolutely critical to a company’s success. During their meetings, important decisions are made regarding the long-term strategy of a company, the most pressing operational issues, or the oversight of corporate governance and compliance. Although corporate reports and executive summaries for these meetings are now written digitally, the whole leadership meeting process at many companies today still relies heavily on paper. Before a board meeting, for example, corporate secretaries often prepare and distribute a paper-made board pack, which often contains hundreds of pages of documents.
The heavy dependence on paper exhibits many disadvantages: the directors cannot access the documents from anywhere and at anytime, the confidential documents can easily get lost, and when changes need to be done on the documents, which happens regularly, all documents have to be reprinted and distributed. This leads not only to higher costs, but also to confusion arising regarding which document is the most updated.
Many leaders are becoming more and more aware of the associated costs, and the decreased efficiency resulting from paper-based meetings.
However, they encounter the same obstacles that were illustrated in the case of the retail bank: implementing a digitised process requires a change in the organisation’s thinking and an initial investment.
The case study of a large Swiss insurer shows it is indeed worth investing time and money to improve the meeting management process. The executive committee identified an efficiency issue in leadership meetings and opted for a meeting management solution that digitised the entire meeting process and centralised all information in one software. As a result, both the executives and their administrators improved their work considerably. The insurers’ administrator, on the one hand, drastically reduced the manual work during the meeting process and, therefore, saved dozens of hours of work per month. The members of the executive committee, on the other hand, are now better prepared for their meetings because they have quick access, from any device, to all information regarding upcoming and past meetings. Furthermore, documents are updated in real time. To sum up, the insurance company now runs better, more efficient meetings, saves a lot of time, and reduced its costs thanks to fully digitising its meeting process.3
The two examples above show perfectly that many organisations still rely heavily on paper, and why and how they use a hybrid digital-analog way of doing business. This hybrid way of doing business is the reason why the penetration of digitisation is still relatively low seeing that digital actually became an important part of our everyday life. At first glance, the challenges regarding document digitisation and going fully paperless can be discouraging for business leaders. However, directors must be aware that digitisation is happening with or without them, and that it provides for a big opportunity to improve a company’s competitiveness. Here are the four main value-adding advantages of digitisation.
1. Higher productivity, speed, and efficiency
In the case of the retail bank, the document digitisation of its client interactions eliminated all non-value adding activities. The entire warehousing process can now be completed much faster and without any manual work. At the same time, the meeting software allowed the insurer’s administrator to speed up the meeting preparation process as well as the executive members to prepare more efficiently. Hence, digitisation has a huge effect on a company’s productivity.
2. Increased quality of processes and services
Document digitisation not only improves efficiency, but it also allows for a higher quality of processes and services, and adds new value to a business. One case in point is that better meeting preparation leads to better meetings, which, in turn, improves the quality of decisions. And better decisions are a huge asset for any organisation. Also, the retail bank, through the use of electronic forms and auto-validation rules, was able to deliver a better service to the customer. This provides a strategic competitive advantage over the other players in the same segment.
3. Better compliance and lower risks
The bank integrated automated checks and rules into its digitised processes, which made the bank fully compliant with data privacy law and other regulations. Similarly, the meeting management software allowed the insurance company to minimise the paper-based security risks and increase internal communication to raise corporate governance standards. Document digitisation is, therefore, an important step towards ensuring full regulatory and legislative compliance.
4. Reduced costs
Both the retail bank, as well as, the insurer saved substantial costs thanks to document digitisation. First, they eliminated the costs of printing and transporting paper, which is a significant cost seeing the scope of documents the two businesses were handling per year. Statistics show that the typical manager wastes 150 hours a year searching for lost paper-based documents, which equals to a yearly loss of several thousand Euros per manager.4 Second, seeing that digitisation leads to more productive, high-quality, and lower-risk business processes, there is another substantial reduction in associated costs. The retail bank, for example, now saves up to 15 million Euros a year. And third, digitisation even allows for new ways of cost reduction and value-adding processes, for example through the use of big data to find cost-cutting potential and enhance its client relations.
The article shows that the penetration of digitisation is still unexpectedly low. We used two real-life examples to demonstrate that many organisations have indeed embarked on the digital journey, but that there is still a long way ahead to reach the full digital potential. However, the shift towards a paperless environment increases each year as new technologies are becoming available to improve data storage and electronic communication. Taking action towards digitisation helps businesses add value by
It is now up to business leaders to realise these opportunities and take bold decisions in order to advance on the digital journey.
1. Digitisation. Business Dictionary.
2. Is it time to go paperless? Deloitte. 2012.
3. Establishing effective meetings with Sherpany: the case of Helvetia’s ExCo. Sherpany. June 27, 2019.
4. How can executive and board portals optimise meeting costs, productivity and security in your organisation? Sherpany. March 19, 2019.