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Turning digital transformation into business reality for mid-sized companies

Mid-sized French companies are now aware of the importance of digital transformation. The next step is to turn this into a business reality. Sébastien Hours, CEO of Keria, and Pierre-Olivier Brial, Deputy Chief Executive Officer of Manutan and chairman of METI’s digital commission, explain what they mean (METI is the French association of Mid-sized companies).

Mid-sized companies in the first stage of digital transformation

The results are in from the second edition of the barometer measuring the digital maturity of mid-sized French companies. These companies are aware of the challenge. “Digital transformation is now considered to have a bona fide place in corporate strategy,” says Sébastien. According to METI, the industry body representing mid-sized French companies, this newfound awareness places the executives of these companies in the “first stage” of digital transformation.

Mid-sized companies have three “priority” challenges during this first stage of digitisation:

1 – Acquire the most appropriate technological solutions. Executives must now fully integrate digital considerations into their activities. This means creating a digital transformation plan, “with concrete, measurable achievements”, that CEOs could potentially carry out with the help of a dedicated team.

2 – Train employees on the new tools and processes implemented in the company.

3 – Create a favourable ecosystem through strategic partnerships. Mid-sized companies must learn to collaborate in an agile manner with innovative start-ups, as well as with established internet giants, “whose practices are very different from ours in certain areas such as security and data processing”, Sébastien points out. “This new ecosystem also needs to have large domestic and international market participants.”

For Sébastien Hours and Pierre-Olivier Brial, mid-sized French companies already have several strengths for furthering their digital transformation. Size is an “essential factor”, Sébastien believes. “It makes us responsive, very agile and also enables us to visualise the medium-to-long term. We also put great emphasis on how efficient a project is.” Another strength is that the objectives of mid-sized companies go “well beyond” purely economic ones. “More than two-thirds of mid-sized companies are family-owned. By basing the use of digital on objectives that go beyond the financial context, we can involve employees in the transformation using fixed points of reference,” says Pierre-Olivier.

Moving from awareness to business reality

To encourage collaboration with start-ups, METI has launched a workgroup called “French Tech ETI”, putting mid-sized companies in touch with French technology start-ups and creating opportunities through non-profit organisations such as France Digitale, which is “very attentive to these issues”. At the end of 2017, METI decided to create “real momentum” to encourage French companies to step up their digital transformation. “This year’s challenge is to advance from a simple awareness to a business reality, with real examples of significant success in transforming a company.”

As corporate executives, Sébastien and Pierre-Olivier are well-versed in the challenges companies face as they go digital. “At Keria, it has already been a decade since we started integrating digital transformation into our strategic plans and into every activity requiring it,” Sébastien explains. Today, digital impacts the three principal avenues of Keria’s corporate strategy: the design and development of products, the customer experience and organisational and process development.

Sébastien tells us more about these three digital revolutions, which are among many others taking place at France’s biggest lighting company. The first concerns product design and development. In partnership with a start-up, Keria has developed Keria LED, a smartphone application that centralises all of the customer’s connected lightbulbs. “The user receives new, intelligent lighting solutions, and we get to better analyse how he or she uses our products so we can develop new ones.” In addition, a tablet-based application enables Keria salespeople to create bespoke products directly with the customer in-store.  Finally, by reaching out directly to the Keria community on social networks, Keria involves customers in the choice of style and colour “right from the design stage of a new product”. The second revolution relates to the customer experience: augmented reality. “We are currently working with a Grenoble-based start-up on augmented reality solutions to enable customers to see a product as if it were in their living room.” The third revolution is the implementation of better internal collaboration. “We were among the first to test Facebook’s Workplace application in 2016. Teams can interact in real-time, launch projects and find solutions quickly and collaboratively.”

As for Manutan, “we started to make use of digital technology 16 years ago, initially as an extension of our existing business,” says Pierre-Olivier. We moved from the catalogue to e-commerce, which became a way of federating all of the group’s subsidiaries. “We were among the first to offer electronic catalogues, through which we could expand distribution to new potential customers.” But digital does not only mean online sales. With numerous market participants launching their online sales sites, “we had to evolve, because our model was becoming less and less of a differentiator.” So senior management decided to change Manutan’s corporate mission: “create a high-quality relationship, based on sincerity and responsibility. Digital represented a fantastic way to achieve this.”

Manutan’s digital transformation was also characterised by two revolutions. The first involved the corporate culture: Manutan’s senior management presented digitisation as a way to “combine technology and human relationships”. To teach customer relationships and good digital practices to its employees, Manutan created an internal university, “which focused on the relationship that each person has with himself or herself, with others and with customers.” In its second revolution, Manutan teams travelled to Silicon Valley to learn about “minimum viable products” and the “test and learn” culture. Back home, Manutan created a “Lab” immediately thereafter in which it studied customers’ situations and needs so as to quickly design an initial product that could satisfy those needs. This became Manutan’s signature “MVP”. The group moved from managing a few large projects stretching over several years to a multitude of small projects that can be tested more quickly. “In January, for example, we launched a product created in only three months,” Pierre-Olivier explained. “We are now more agile, pragmatic and our view of failure has completely changed.”

Ready for a “nation of mid-sized companies”?

Mid-sized French companies do not have to tackle digital transformation on their own, and in joining METI’s digital commission, Pierre-Olivier and Sébastien decided to encourage them. They start by working on a company’s visibility and attractiveness; many companies have significant digital recruitment needs. “They must increase their attractiveness compared with start-ups and large companies!” Sébastien exclaims. “Not many people know it, but from 2009 to 2015, mid-sized companies created 335,000 net jobs, i.e. more than any other company category during the period,” adds Pierre-Olivier. By promoting mid-sized companies to the public authorities, they are also counting on the government to support them as much as it helps start-ups and large groups. “The PACTE plan, championed by Bruno Le Maire, Minister of the Economy and Finance, shows that the government is serious about listening to them,” Sébastien says.

The METI also dreams of seeing France become a “nation of mid-sized companies”. “We have only 5,000 of them, vs 12,000 in Germany,” Pierre-Olivier explains. France’s numerous start-ups are its ace in the hole, and METI believes that digital makes them “a real reservoir of potential mid-sized companies.” The idea is to give start-ups the desire to grow, rather than looking only to be bought out. “I should say, however, that digital is not the be-all and end-all,” Sébastien added. “It represents simply an improvement in processes and solutions that can be offered to customers. It’s not digital technologies that will transform the country and make its companies grow!” For Sébastien and Pierre-Olivier, two conditions must be met to make France into a “nation of mid-sized companies”: an ecosystem must be created that fosters close collaboration between start-ups, mid-sized companies and large groups, such that small companies can grow more quickly than they can today. The second, more general condition, Sebastien concludes, is that “legislation, taxation and the entrepreneurial spirit must evolve and develop.”

Read the second edition of the Barometer on the digital maturity of mid-sized companies.


Apax Partners

Investment fund supporting middle-market companies in four focus sectors: TMT, Consumer, Healthcare and Services.


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