Digital transformation

Welcoming new member Richard Cho

Umbrex is pleased to welcome Richard Cho with Growing Abundance Mindsets.  Through his time at Gartner, Bridgewater, and McKinsey Richard developed a set of tools, frameworks and practices that have been adapted from leading business thinkers and applied across multiple Fortune 500 company teams to successfully drive new initiatives.

Often times technology problems are usually business engagement problems, and he has a track record of getting these initiatives on track. Richard is passionate about building world-class cross-functional digital teams that go after big goals by developing a culture of meaningful trust-based relationships and continuous learning.

Digitization in Commodity Trading

 

This in-depth article from Boris Galonske explains how digitization helps improve resilience in commodity trading.

Commodity trading suffers from shrinking margins and in some commodity classes also from low price volatility. At the same time operating environments struggle with manual routines, legacy processes and systems resulting in high cost income ratios (CIR).

How can this challenge be addressed and how can the profitability and the resilience of trading businesses be increased?

Situation today

Commodity trading exhibits still several manual routines in its workflows, given the physical nature of the business and established processes in the industry. At the same time margin pressure increases as the inherent profitability of several trading businesses decreases. How can this be addressed?

Commodity trading business characteristics

Commodity trading businesses are typically lean by nature. Several years back, high performing businesses exhibited cost-income ratios (CIR) in the range of high 30% – medium 40%. These days these ratios are significantly higher. Large European commercial banks – as a comparison –  even exhibit cost income rations in the range of 70 % – 90% +.

In order to tackle the profitability gap, analytics and middle office activities have been scaled down.

However parts of the trading process have remained untouched.

 

Points covered in this article include:

  • How digitization can help
  • Reservations about digitization
  • How to approach trading digitization

 

Read the full article or download the PDF, Monetizing Digitization Levers, on the Silverberg Partners website.

 

How to Ensure Successful Digital Transformation 

 

C.V. Ramachandran discusses what it takes to institute digital transformation successfully by engaging a holistic approach that provides support for every part of a company’s value chain.

Big data, machine learning, connected vehicles, industry 4.0, robotic process automation, blockchain … No matter what industry you are in, you have surely come across these popular buzzwords in recent years. These are the phrases that define digital transformation, a modern industrial revolution that has the potential to dramatically transform companies and economies all over the world. 

A variety of companies are leading the way, with Amazon, Netflix, and Walmart being some of the first to spring to mind. But these are major corporations in information intensive industries, who have been leading the charge in digital disruption. More broadly, according to a recent McKinsey survey, only about 30% of digital transformations actually succeed.

 

Read the full article, Digital Transformation: It Takes a Village, on LinkedIn.

 

How to Organize for Going Digital

Stephen Redwood provides a post that addresses a common problem most companies face when shifting to a new system: how to organize all the moving parts to prepare for the transformation. 

 

Not since the world went from moving around by horse and cart to the use of steam engines, has the pace of change accelerated as much as it is now. So, when back in February 2018 Forrester published a paper entitled Digital Rewrites the Rules of Business it quite rightly focused on the need for companies to think transformational, rather than incremental when figuring out how to adapt to the digital world.

Many of my clients are on this journey and have asked me the question: “How should we organize for digital?”

 

Points covered in this article include:

 

1: The right reporting line for digital

2: Capabilities within the digital function

3: How to resource digital

4: The readiness of company culture

 

Read the full article, How Should We Organize for Digital?, on LinkedIn.

Put Flexibility in Place to Prepare for a Pivot

Kaihan Krippendorff provides three signposts that can direct your organization towards a successful pivot.

 

If people try to tell you that pivoting is the new thing, that it’s the fresh Silicon Valley approach to business designed for today’s fast-paced digital world, don’t believe them. Consider Fairfield University, a private school founded just outside of New York in Fairfield, Connecticut, by the Catholic Church – a 2,000-year-old organization.

In 1941, the society that runs the Jesuit school system had acquired two properties and were finishing renovations on them. One would become a university for college students and the other a preparatory school for younger boys, both on the site of what would become Fairfield University. The plan was to open the university first while renovations on the prep school were still underway.

But then, on Dec. 7, just before the university was scheduled to open, Pearl Harbor was bombed, pulling the United States and nearly all of its college-age men into war. Concerned that they would have a school with no students to fill it, the priests engineered a classic, Silicon Valley-style pivot. They moved the prep school (for younger boys) into the finished building and opened it first.

 

The signposts are:

-Have a purpose

-Create optionality

-Encourage proactivity

 

Read the full article, If a 2,000-year-old Organization Can Pivot… So Can You, on Kaihan’s website.