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An “inevitable inflection point” is approaching for companies to embrace digital transformation, but there are a number of reasons why stakeholders might hold back, according to GXO’s chief automation officer, Adrian Stoch. 

“If companies aren’t on a digital transformation programme, there’s an inevitable inflection point that’s going to occur in the very near future,” he told The Loadstar. 

“I’m thinking that, within the next one to two years, companies that haven’t started their digital transformation will find it’s extremely difficult to catch up – if it’s possible to catch up at all,” he added.  

And while companies with enough liquid capital to invest in new technology could gain a competitive edge, this has raised concern for SMEs that might not boast the same financial capacity. 

However, Mr Stoch believes technology is becoming more accessible and there is a wider range of solutions to help SMEs with digitalisation. 

“The development companies, the suppliers, are aware of this potential and so they’re creating more flexible and innovative financial models that aren’t based around a large outlay of capital and cash up front.  

“They are providing options for pay-as-you-go or pay-as-you-use services. We’re in discussions with a company now about that. They get compensated based on our picks using their technology,” he said. 

But financial pressure isn’t the only thing keeping companies from investing, Mr Stoch told The Loadstar.  

GXO chief automation officer Adrian Stoch

“There are three reasons why companies wouldn’t invest, and the third is financial.” 

The first, he explained, concerned a lack of awareness of the importance of digital transformation, and/or how to go about it.  

“It’s very difficult to know how to embark on this journey, and the decisions can’t be taken lightly,” he said. 

“Which lends into the second reason – that there are a number of case studies, horror stories, of where automation has failed and gone wrong.” 

He said the “horror story” examples included a solution designed for a retail company in the arts and craft space, but this solution had only been proven in the cosmetics vertical – “two completely different use cases for technology,”explained Mr Stoch. 

And another featured a company that anticipated future growth, with a return-on-investment plan as the basis for its ability to get funding. But the growth didn’t materialise as expected.

Mr Stoch advised that companies adopting new technology should go through “many iterations of business case analysis”, including understanding their requirements and what issues the digital solution needed to solve.  

“It starts with solution design, then the financial aspects of that solution, designing a very detailed business case analysis and then, at the end of the business case analysis, you get your annual return on your investment.  

“Based on that first iteration, it may be that ‘this is never going to work because of these financial parameters’. Well, then you go back to the solution drawing board,” said Mr Stoch.   

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