We’ve all heard of the benefits of digital transformation – cost savings, process efficiencies and better customer outcomes. But how can businesses move from the drawing board to successfully reach and sustain this business value? Driving business transformation requires more than a simple technology deployment, argues Ian Kingstone, Business Transformation Specialist at Columbus UK. He explains how extensive planning, effective change management and a focus on the outcomes of digital projects are vital for sustained success – as well as a third set of eyes to help keep your project honest.
Digital transformation is rife, driven to newer heights by the pandemic and supply chain disruption experienced over the past couple of years, with digital solutions and services stepping into the void of in-office work and face-to-face processes. Technology is today reshaping many ‘traditional’ industries and operations – everything from enhancing food manufacturer production lines through to retailers transforming customer-facing channels.
Then there is the global pace of change to contend with – from rising customer expectations, shifting business models and even issues such as climate change driving greater demands for sustainability and transparency. B2B organizations that may have once been content to continue with legacy processes and systems are now in danger of falling behind the digital maturity curve in the face of more ambitious competitors.
Time for a reality check on technology?
Business leaders should constantly be looking to identify new business value and transformation opportunities – and many do – but the challenge then lies in making these opportunities a reality. There is a clear gap between digital ambitions and reality here. Indeed, Gartner research shows that while 87 percent of senior business leaders believe digitalization is a priority, just 40 percent have brought their initiatives to scale.
To ensure success, business leaders must work to adopt new digital solutions at a measured pace, with a clear plan that minimizes operational disruption and tackles legacy IT challenges while retaining stakeholder and wider employee buy-in.
Hunt for value – don’t transform simply to follow the crowd!
A staggering 70 percent of companies that attempt to digitally transform fail, despite this rising focus on advanced technologies and digital adoption. So what differentiates the successful 30 percent? It’s being focused on the outcomes of their projects and the value they’re expected to generate, not adopting a specific technology or system purely for the sake of it.
This recipe for success requires adopting a ‘value-first’ approach – aligning people who will be actively involved in the transformation, and aligning the mindsets of those seeking value. Indeed, any project should seek to be people-centric, with the end-user fully invested in the process to ensure success. A new platform or process will never truly achieve its full potential if it suffers from lukewarm user interest and limited adoption rates.
The four key pillars of success – take the team with you
Business transformation encompasses far more than just technology adoption, and the ability to broaden focus to include these wider business factors can make or break any initiative. This is why any successful transformation must address four key pillars: new value, align mindsets, transformation capabilities and the right pace.
New value and focus on the delivery of value needs to come first – before any investment in change or technology, and across the lifecycle of any technology implementation and beyond. From hunting and identifying, planning, managing, and evaluating new value acquisition through to sustaining and growing that value. Value management is a directional management discipline, providing the rationale for the investment and understanding of the activities and dependencies that affect success. People and mindsets must be strategically aligned on priorities and driven forward by strong leadership, fostering a culture that encourages change and employee adoption of new technologies, and ensuring accountability throughout the entire initiative.
Stakeholders must be armed with the appropriate transformation expertise and technical capabilities. It takes different skills, experience and competencies to successfully change the organization than it does to run the business, and this is more prevalent in organization change than it is in the technical capabilities.
Management of project pace is equally vital. Rushing deployments or allowing goals and deadlines to stretch can heavily affect the likelihood of success – making end-to-end change management crucial to manage risk and keep transformation roadmaps on track. Adaptive, lean and agile delivery can help here.
Bringing all four pillars together to focus on successfully blending technology with wider business transformation will ensure projects can deliver on generating new value.
Planning makes perfect – envisioning
Transformation project planning should initially take place at the highest possible level in a dedicated ‘envisioning’ stage. This is a workshop process, where ideation takes place among stakeholders, seeking to identify business pain-points and opportunities instead of specific technologies or solutions.
Keep your plan honest
Executives from across the business must be aligned at this stage – whether from marketing, sales, finance or IT. Such meetings should preferably take place quarterly for continued engagement! To achieve complete success, businesses ideally need external consultants and a design-thinking process to drive these discussions, ensuring goals do not stray and no single department’s priorities influence focus. If done well, the envisioning process helps align mindsets.
Drill down and understand the challenges
These sessions are critical for determining business direction, prioritization of goals and securing buy-in across the board. Once high-level goals have been established, there is an opportunity to drill down into more specific business or industry challenges – and then discuss how to deliver, optimize and then add more value.
Don’t zero in on a single technology or feature
Very few transformation projects fail because of the chosen tech. Many stakeholders become overinvested in specific features or functionality, which can cause the scope and scale of the task to dramatically increase. Successful projects should have a laser focus on how to add value in a specific area, and plan and execute accordingly.
The solution must fit you – don’t crowbar yourself into a solution
All of these activities are, of course, solution-agnostic – businesses should avoid another common pitfall by opting for technology that will deliver the desired value, not a specific vendor or product range.
They also aren’t limited solely to core IT systems such as ERP. Take a small manufacturing company for instance. Investment should be directed at transforming a manufacturing process, not simply deploying a new business system. Rolling out a modern ERP solution may be a critical part of this, but it is not a ‘silver bullet’ for business transformation.
Push for an outside perspective
With so many digital projects failing during, or due to a lack of, a planning stage, this can naturally be seen as a daunting process.
This is why it is crucial for businesses to opt for trusted, experienced consultants that can provide flexible support – from simply adding external skills such as change management experts, through to advising on and building a transformation roadmap, then aiding as a guide through the implementation.
Whether a transformation project involves eliminating data siloes or implementing a future-proof ERP system, one point remains constant – the outcome is key, not a specific solution or platform. Successful change relies heavily on trust and buy-in. Achieve this, and business value can be found in surprising places.
Ian Kingstone, Business Transformation Specialist, Columbus UK