For centuries, France has led the world in art, science, and philosophy. This leadership position is a direct result of its ability to evolve and transform continually. In its long history, France has experienced phases that posed existential challenges. However, the country faced these challenges and emerged as one of the strongest nations. Today, France is facing a unique challenge, and it will have to potentially reinvent itself once again to retain its leadership position amongst the world's largest economies. The challenge this time around is the digital and innovation gap.
France always aspired to become a ‘digital republic’ through large-scale investments in digital innovation across all aspects of governance. The French government strives to support its digital champions and unicorns and provides the necessary infrastructure required for hyperinnovation. Despite being a global player in technology, France and its digitally-driven economic activity is on the lower side compared to countries such as Japan, U.K., U.S., Switzerland, and others. In fact, the Digital Economy and Society Index (DESI) positioned France 16th in terms of digital performance and competitiveness among other European Union (EU) member states. Also, France is ranked 24th in RFID utilization, 20th in social media, 16th in cloud, 15th in online selling, and 15th in cross-border online selling. Some reports find that only 62 percent of the population is engaged in purchasing products and services online. However, COVID-19 has given a significant impetus to many French enterprises, who were otherwise slow to appreciate and execute digital transformation, to transform themselves in a short time to address challenges posed by the pandemic. Most of these companies tried to overcome the challenges by rapidly digitizing, enabling remote working, improving online penetration, expanding their online business, and working on finding ways to achieve greater customer satisfaction online. Nevertheless, a lot is yet to be done in the medium- to long-term by France and French enterprises to become true leaders in digital technology and digital innovation.
COVID-19 has given a significant impetus to many French enterprises – to accelerate their digital transformation journeys to address challenges and opportunities posed by the pandemic. #digitaltransformation #futureproof
Before we explore what is possible for the future, it's essential to understand why digital technology adoption has been slower in France than other EU countries. France faces many digitization challenges across its homegrown corporate enterprises – the most prominent one being organizational culture. In France, organizational culture is often marked by hierarchical structures, and strategy development is done on a long-term basis. Large conglomerates tend to indulge in long, elaborate planning while deciding future business strategy. Organizational transformation is an aspect that is often not given top priority. The change in customer behavior and shift in buying preferences haves made organizational change a must to survive and flourish. Digital adoption, on the other hand, requires an agile more dynamic approach to building business roadmaps along with mapping technology. Business and technology need to go hand in hand to achieve incremental, consistent improvements in both these areas. Business and IT waste identification and elimination is often the first building block of this digital transformation. French organizations that have embraced this fundamental shift of focus and have undergone a transformation at their core, are the ones who are reaping the benefits and growing faster than their peers.
In France, there is also the problem of a digital skills gap. By 2022, up to 212,000 new jobs are to be created in the digital sector, and there is already a significant shortage of technical skills. Moreover, the market's intense competition has driven down margins, resulting in limited financial resources available for a digital overhaul.
The French government, led by President Emmanuel Macron, recognizes the diverse challenges facing French companies and has instituted several funds to accelerate digital innovation. His vision for France is to incubate 25 unicorns by 2025, reform all public administrative procedures through digitization, and ensure 100 percent coverage of high-speed networks. The French government is driving impactful initiatives, making a significant investment in digital, and showing how committed it is to transforming France into a digital- and innovation-centric nation. However, achieving that vision would require French enterprises to evolve rapidly, ensure business resilience and fuel growth in the post-pandemic environment. French enterprises of all scales and sizes across sectors are looking to transform themselves by riding the digital wave. They need to consider the following five critical tenets for digital transformation:
- It's time to say goodbye to the ‘starting small and building up from there’ approach
Enterprises that prioritized isolated and low-impact digitization initiatives in response to narrowly-defined business requirements found it tougher to meet the technological challenges arising due to COVID-19. They found it difficult to maintain the same productivity level; some could not even adapt to a secure remote working environment nimbly. It's time French companies designed a comprehensive and staggering digital strategy – encompassing short-, medium-, and long-term organizational objectives. The digital transformation strategy needs to be closely aligned with business objectives. Organizations must realize that a digital strategy change is accompanied by cultural change that needs to be driven from the top. Starting off in a few areas without a larger IT and business organizational vision for transformation is a recipe for failure.
Some French companies were early starters, and they made wise investment choices and employed a holistic design thinking approach. As a result, these enterprises unlocked new sources of competitive advantage, growth, and value creation. CXOs must assess their existing business landscape to identify operational and technology gaps, find ways to bridge those gaps and prioritize digital projects based on a thorough cost-benefit analysis.
- Build a seamless customer experience journey
It is said that, ‘a bad automated process is still a bad process.’ Organizations can reap the benefits of digital -only when the underlying business processes are streamlined and optimized to deliver a superior user experience. Hence, enterprises must gain complete visibility in end-to-end business processes, people, tools and digital platforms that support those processes.
Understanding how customers interact with every touchpoint and how their requirements are fulfilled is the key to developing a wholesome digital program. Integrating all touchpoints and consolidating customer data along with a simplified and better-integrated web presence can enable a future-ready customer journey. Further, with the increase in the number and sophistication of cyber attacks in recent years, companies must invest in next-generation cybersecurity and data-protection technology to safeguard Personally Identifiable Information (PII), thus boosting customer trust and avoiding compliance lapses.
- Invest in critical building-block technologies
It is commonly understood that the digital transformation of an enterprise entails investing in large-scale technology platforms or commercial off-the-shelf digital enterprise solutions. However, a more refined and practical approach toward improving digital performance is to invest in fundamental technology elements that make up those broad digital platforms. By making strategic investments in digital ‘seed technologies’, such as APIs, AI, microservices, DevOps, and low code, companies can drive maximum returns on investment in broad technology platforms. For instance, while the cloud is an exceptional lever to boost scalability and business agility, companies need the building-block technologies of the cloud to become fully cloud-native. Similarly, ensuring robust integration with third-party vendors and digital partners can only be possible with a leading-edge API strategy. Getting the basics right is key to achieving success in digital.
- Bolster data management practices
Data is at the heart of most digital initiatives. The in-depth, actionable insights derived from large volumes of data collected from diverse sources can help businesses curate hyper-personalized experiences for their customers and drive operational excellence. The most common challenge when it comes to leveraging data for informed decision making is the problem of data silos – data residing on different systems and in various formats. By breaking those silos through the implementation of next-generation data lakes and building data-driven insights right into the customer workflow, organizations can ensure effective digital execution. French companies should give paramount importance to data architecture and digital platform design when creating a broad technology platform.
- Foster an ecosystem of digital partners
The success of digital initiatives – more so after the COVID-19 crisis – will eventually depend on the availability of technical skills for the design, development, and maintenance of digital platforms. To bridge the digital skills gap in France, enterprises can collaborate with digital service providers and technology consultancies, leveraging their experience, quality, and resources to advance the digital agenda and attain digital maturity. The proven expertise of these digital service partners ensures that digitization takes place in a cost-effective, risk-free, and timely manner. In such a collaborative approach to digital transformation, the in-house talent focuses on business as usual, while working closely with the third-party digital service provider to tailor the digital strategy for specific business requirements. By following the five-pronged approach to digital transformation, French digital enterprises can experience the highest level of digital maturity, positively impacting customer satisfaction, revenue growth, cost efficiency, speed to market, and service excellence.
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