Mid-sized companies need a 360° view of digital

The majority of mid-sized French companies have now launched their digital transformation. Some are making their processes paperless, while others, further ahead in the game, are collecting and using data. The challenge for companies, wherever they are in their transformation, is integrating digital into their strategy and structuring themselves accordingly. Pierre-Olivier Brial, General Manager of Manutan and co-Chairman of the METI digital commission, elaborates.

Since the 2018 edition of the digital maturity barometer for mid-sized French companies, what major developments have you seen?

Pierre-Olivier Brial: A number of sectors have taken the plunge in the last year. Manufacturing in particular is catching up, with an assist from Industry 4.0. Pilots, and in some cases comprehensive transformation plans, have been launched. Wholesale distribution has also waded in. B2B customer behaviour has changed, and we are seeing meaningful digital initiatives here as well. It seems to me that more and more mid-sized companies are grasping the power of digital and how it’s impacting their business model.

A number of mid-sized companies entered into a new phase of digital transformation characterised by better data analysis and initial encounters with artificial intelligence (AI). Of course, not all companies have made the same degree of progress. In late 2018, we organised a new co-design workshop, together with Apax Partners, for managers of mid-sized companies. We could see that the companies already undergoing their digital metamorphosis were rightly thinking about the best way to use data and starting to organise accordingly.

What big challenges should mid-sized companies now address?

P-O.B.: For newcomers, digital transformation calls for successfully digitalising customer relationships and sales forces. Their first projects should thus focus on going paperless or building an e-commerce business. Others need to thoroughly understand the challenges of Big Data and how to make the best use of it. Some manufacturing companies will need it for predictive maintenance in particular.

With new players in their sector, mid-sized companies will also need to review their original model and be more competitive, by adopting a 360° understanding of how digital will change the customer relationship and work methods. Some examples: mid-sized automotive parts distributors have to contend with the advent of self-driving cars. In healthcare, the end-customer needs to be given more consideration. In industrial engineering, Industry 4.0 will have to be integrated.

It’s a trap to think about digital transformation solely as a series of initiatives, a mistake still made by managers who are not fully incorporating it into their company’s mission. Another trap is wanting to go it alone. Not all mid-sized companies are attuned to the start-up ecosystem, even though that remarkable ensemble of players could help them accelerate their transformation.

Besides start-ups, what resources do mid-sized companies have to succeed in their transformation?

P-O.B.: Mid-sized companies think short, medium and especially long term. They need to build on that capacity since digital transformation requires fundamental changes. But that’s not all! Mid-sized companies generally start out with a mission, so their leaders will try to make digital part of their values and get all of their employees on board. That’s key, since digital transformation challenges the way we work. Lastly, the mid-sized company is often a niche leader. This specialisation lends itself to a very focussed transformation with a limited number of initiatives.

What are the next steps for “taming” the data?

P-O.B.: First, identifying where in the company the data can be found. Next, establishing clear governance. Determining the people responsible for managing data use and the processes needed for smooth operation. The third phase is setting up pilots to get the most out of the data. The fourth and last phase is continually adapting the technology, for example, by creating data lakes to better leverage Big Data. At Manutan, we are in the third phase and are starting to think about the fourth, using new tools and looking for new skills.

What are METI’s projects for 2019?

P-O.B.: We are working on explaining the digital transformation process, with two goals. The first is image. When you think of digital transformation, you think start-up or large-company, not mid-sized company. Yet there are hundreds of examples of digitalised mid-sized companies! In our view, countering this image is crucial, if only to make the public authorities aware of our digitalisation challenges. The digital barometer, by the way, is one of the tools for this communication and awareness strategy, because it can proactively deconstruct some of those images about digital.

We are also trying to make our voices heard in regional and national initiatives, such as artificial intelligence. Germany has included 1,000 mid-sized companies in its plan, to help them better adapt to AI. At METI, we want to be out front when such innovative programmes are launched. And above all, we want to bring our expertise to digital transformation initiatives.

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Apax Talks is a digital magazine aimed at company managers. It presents growth levers for SMEs, with a focus on TMT, consumer, healthcare and services sectors.