In a recent report, “Building a Connected Business,” the National Association of Electronic Distributors (NAED) wrote, “Digital transformation goes beyond technology to reflect a mindset of constant innovation, fast decision-making, and the integration of technology into all phases” of an electrical business.
Frank Agraz would agree with that definition. And he knows what it means for the future of the lighting industry.
Agraz is uniquely suited to discuss the topic of lighting industry digital transformation — he’s overseen a few transformations himself.
Currently the Director of C&I Engineering at Eco Engineering (a leading provider of turnkey lighting services), Agraz has worked in the energy-efficient lighting industry for over 25 years. Before taking on his current role, Agraz co-founded, grew, and led national turnkey lighting retrofit provider Maneri-Agraz Enterprises to a successful exit.
Suffice it to say, Agraz knows what he’s talking about when it comes to digital transformation in the lighting retrofit industry. That’s why we invited him to speak during SnapCount Retrofit Showcase 2021.
Agraz’s presentation, entitled “The Time for Digital Transformation Has Arrived in the Retrofit Industry,” revealed:
- Five digital transformation trends poised to lead the lighting industry into the future
- Practical steps growth-minded lighting retrofit businesses can take to achieve operational excellence
Here are some highlights from his insightful discussion.
What Does Digital Transformation Mean in the Lighting Industry?
Typical definitions of digital transformation involve concepts such as using digital technology and strategy to “fundamentally change an organization’s customer experience, business and operating processes or culture,” explained Agraz.
While definitions of transformation vary, the end goals are always the same:
- Delight the customer
- Increase revenue
- Grow company net worth
Agraz used examples from outside the lighting retrofit industry to demonstrate how companies and their customers can benefit from this type of transformation. For instance, by switching its focus from local software to a cloud-based model, Microsoft became the third company to reach a $1 trillion market cap.
Best Buy transformed itself by going from “selling products, to enriching people’s lives” through home consultations and Geek Squad subscriptions. Now it is one of the few major electronics retailers left standing.
Digital Transformation Trends in the Lighting Retrofit Industry
Turning to the lighting retrofit industry specifically, Agraz identified five ways retrofitters are transforming themselves to streamline their operations, better serve their customers, and grow their companies:
Along with the rest of the business world, most lighting retrofit companies have moved at least somewhat from analog to digital techniques and tools.
If you use OneNote instead of sticky notes, email instead of snail mail, and voice-over-IP instead of landlines, you understand how going digital can help your team communicate more efficiently and work more productively.
“For many of us lighting folks, [a digital transformation] could really mean switching from pen and paper to computers. For others, it may mean transitioning from a 2D spreadsheet to a 3D database,” Agraz told his audience. “Maybe it’s using the voice-to-text function in our apps and email. Quite possibly, it means giving your project managers and installation crews the ability to send electronic daily progress reports using tablet and Wi-Fi.”
(Note: Many of these digital capabilities can be found in leading lighting retrofit technology platforms such as SnapCount.)
“Finding better ways to simplify and automate our tasks with existing software features can add value and increase productivity,” Agraz said.
Decentralizing involves multiplying your organization’s efforts by taking advantage of professional networks. Well-known examples include Airbnb and Uber.
“For us in lighting, the concept of decentralization could translate into outsourcing functions that were once always thought of or used internally. Think of third-party auditing or subcontract labor,” Agraz said.
Decentralization in the lighting retrofit industry could mean “switching to a cloud-based data maintenance situation versus using a local server. Maybe it means using a third-party software to maintain your CRM, your accounting, your project data or even your proposal generation.”
There are two types of collaboration in the lighting retrofit industry: internal and external collaboration.
Internally, effective collaboration doesn’t just mean sharing information but sharing the right information at the right time, Agraz contended.
“Timely information is what allows your team to increase efficiency and allow those in leadership positions to make better-informed decisions,” he said.
Collaboration outside your organization could involve communicating with a number of different stakeholders.
Standardization simply means finding the best ways to do something – and then making those ways your documented processes.
“When I think of standardization, I really think of the process and the technology,” Agraz explained. “With the proper training and metrics in place, every employee knows their role and will be able to function in a way that maximizes performance.”
At the most basic level, automation is about turning a manual process into something that can be scheduled and automatic, Agraz said. Opportunities for automation abound in areas such as reporting and tracking, proposal development, data collection and auditing — provided you have the correct technology for the job.
“Automation means selecting technology that allows your team to mobilize quickly and develop systems that work in unison across all departments,” Agraz said.
The ultimate goal of automation is to reduce labor hours, freeing up valuable resources to focus on tasks better suited to their skill sets.
“Automation offers consistency and reliable output,” Agraz said.
Potential Pitfalls Blocking Lighting Industry Digital Transformation
“Just because you want to implement something doesn’t mean it’s always going to work,” Agraz pointed out.
Some common pitfalls prevent lighting companies from successfully completing a digital transformation. According to Agraz, these stumbling blocks include:
- Having an unclear goal. “It’s really difficult to succeed if you don’t know what you’re aiming for.”
- A lack of expertise. Converting to a digital model may require seeking experienced individuals to guide your company through the process.
- Internal resistance. “If leadership, management, employees, and all the stakeholders have not bought into the change, digital transformation could fail.”
- Ignoring the customer experience. “It’s one thing to have technology, but how you use that technology and the ability to provide value to your customer base is an important thing.”
Practical Steps for Completing a Digital Transformation
How can your lighting retrofit business achieve transformational change while avoiding the pitfalls identified above? Agraz offered a practical roadmap, starting with communication.
“As your team navigates through the process of digital transformation, the foundational efforts should focus on communication with all stakeholders,” including employees, management, training teams, vendors, and anyone else “with a vested interest in the change,” Agraz counseled.
The objective of your communication should be to share your plan with those it will most impact.
The next step is to build a process that allows your team to act on customer feedback. Do your customers feel like their account matters to you? Are they a name or just another number?
Agraz recommended including steps to collect and analyze data that will help you see the big picture: “It's these goals that can fine-tune the methods and steer departments into achieving measured success.”
The proper use of resources is also critical to transforming your business. Agraz suggested determining the right ratio of internal resources to third-party vendors for your organization.
“The idea is to use third-party vendors to stabilize your expenses and maintain a high level of readiness and quality,” he said.
Which brings us to the last step: For those looking to make technological changes, the age-old question is, “Do we build and maintain our own software, or do we purchase it?” Agraz offered some pointers for deciding between internal software and third-party solutions:
- Gather all the relevant stakeholders and come to an understanding of your company’s vision and ultimate goals.
- Evaluate your existing software. Does it meet your expectations? What are you missing?
- Assess third-party alternatives. Do they provide improvements over your current solution? Will any meet your current and future needs?
- Take the contenders for preliminary test drives. Narrow down the fields and get feedback from all stakeholders.
Once you’ve chosen your path, the “real work” begins, Agraz said.
“We dive deeper into all shareholder needs and wants, understand the costs, the savings, the benefits, the setup time, the maintenance requirements, the cost structure, productivity savings, and perceived benefits to the customer,” he listed. “Once you have gone down that road and you think you've made a decision, negotiate the terms, sign the deal, make the announcement and then, most importantly, time to get to work.”
Is your lighting retrofit business overdue for a digital transformation? Discover how the right technology can help your organization get more work done, communicate better, gain new customers, and grow your revenue in your free copy of the Lighting Retrofit Software Buying Guide.
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