Business Functions Still Largely Manual
Despite years of investment in digital, a substantial portion of business processes remains manual, fragmented, or under-equipped. Re-entries, paper documents, email-based approvals, and shared spreadsheets persist across most functions—administration, HR, sales, production, and customer relations.
This lag comes with a mounting opportunity cost. Digital leaders report revenue growth up to 1.7 times higher than laggards, according to a BCG analysis (2025). Moreover, the vast majority of large organizations now carry a formalized digital transformation strategy. The gap widens between those who have transformed their operations and those who delay.
The situation is especially pronounced among SMEs and mid-sized enterprises, where transformation is often limited to a few isolated tools, without a real overhaul of processes. Yet digitalization of business functions concerns both internal organization (administration, production, HR) and external activities (marketing, sales, customer relations): tackling it in fragments means missing the whole point.
This persistence of manual work is frequently rationalized by apparent good reasons: existing processes “work,” teams know them, and any transformation entails effort and risk. But this inertia carries a silent and cumulative cost. While a company clings to its habits, market expectations evolve, competitors accelerate, and the gap widens without any alarm signal—until the day when the lag becomes almost impossible to catch up.
Digitalization or Transformation: A Decisive Distinction
A common misunderstanding slows progress: conflating digitalization with digital transformation. Digitalization means converting existing operations to a digital format—dematerializing a form, moving a paper process onto a screen. It’s useful, but superficial: you’re doing the same thing, just digitally.
Digital transformation goes much further. It rethinks processes, skills, and sometimes even the business model itself through digital technologies, in order to create more value. Scanning a paper purchase order is digitalization; reimagining the entire order cycle to make it smooth, traceable, and automated is transformation.
This distinction isn’t merely about vocabulary. Many initiatives fail because they digitize a poor process instead of rethinking it: they end up accelerating inefficiency rather than fixing it. True transformation touches three dimensions—operational (processes, automation), strategic (models, innovation), and human (skills, change management).
It is the human dimension that most clearly separates the two approaches. Digitalization can be announced from the top and deployed as a tool; transformation requires employees to change the way they work, which cannot be decreed. It demands buy-in, training, and ongoing support. A company that invests in technology without investing in people will at best achieve costly digitalization, never a successful transformation.
Why the Topic Is Becoming Urgent
Several forces push business-function transformation to the top of leadership agendas. The first is competitiveness: as rivals digitalize and accelerate, delay becomes a tangible disadvantage. Each day of postponement is another opportunity seized by more agile players, including new digitally native entrants.
The second is the expectations of customers and employees. Used to the smooth experience of consumer digital services, both groups are less tolerant of slow, opaque, or redundant processes. The digital experience has become a criterion for choice and a driver of attractiveness.
The third force is the AI acceleration effect. Artificial intelligence amplifies the potential of transformation—prediction, personalization, intelligent automation—but it requires structured processes and data to be deployed. A company with little digitalized activity simply cannot fully leverage AI: business-function transformation is the prerequisite.
To Succeed: A Transversal Approach, Not an IT Project
The classic mistake is to consign transformation to the IT department alone, as a technical project. In reality, it is a cross-functional initiative that engages business lines, leadership, and IT together. A few guiding principles to start well:
- Begin with the business processes to transform, prioritized by their value and impact, rather than by the technology available.
- Align IT and business: the IT department becomes a partner to the business, not merely a tool supplier.
- Aim for quick wins: low-risk projects delivering a visible ROI in 3 to 6 months to build momentum and credibility.
- Invest in people: change management and upskilling determine adoption, and thus value.
The challenge for a leader is not simply buying tools, but rethinking how the company creates value in the digital era. Business-function transformation is not a project with a finite duration, but a continuous process of adaptation. When well managed—as a transversal approach aligned with strategy and driven by the business—it becomes a powerful lever for competitiveness, efficiency, and experience. If poorly framed, reduced to a sequence of tools, it disappoints and fuels scepticism. The question is not “Should we transform?” but “How can we organize to do it methodically?”
One last point deserves emphasis: business-function transformation is also a talent issue. Employees, especially younger ones, expect to work with modern tools and to be relieved of tedious tasks. An organization with archaic processes struggles to attract and retain talent, while a transformed company offers a more stimulating work environment. The digital transformation of business functions and the war for talent are thus closely linked—another argument not to delay it any longer.
This content is published by Mentioned
