Digital transformation is a daunting task for any organization, and it can seem impossible to get things rolling without a solid strategy. You can also invest a tremendous amount of time, money, and energy, only to end up with a digital transformation failure. From digital transformations on small scale, like website upgrades and eCommerce deployments, to large-scale digital transformations that include an ERP implementation, your success hinges on maintaining a solid digital strategy from beginning to end.
As some of the most complex digital transformations, here are the five steps every organization can follow in order to give their ERP implementations the best chance of success.
1. Align the Executives
When building a strategy for your digital transformation, executive alignment needs to be your first consideration. All too often, the C-suite thinks they’re all on the same page when in reality each executive could have varying priorities in what needs should take precedent in the transformation. A lack of a well-defined vision of transformation success leads the CIO to focus on optimizing cross-departmental communications and the COO to prioritize reducing labor costs. The CFO in this circumstance may have a different view of the impact of each on the bottom line. They all think they are doing what is necessary to drive success and they believe they are aligned in the end goal of a project, but even this slight misalignment can be enough to grind an ERP implementation to a halt.
Executive alignment should touch every office, employee, process, and end goal. It’s also important to bring the CEO into the decision-making process rather than letting the CIO spearhead digital strategy independently to ensure a cohesive and unified approach before diving into a transformation. By aligning the executives with a clear and specific digital strategy, you can set the bar high and give your implementation the best odds for success.
2. Identify Your Business Needs
No one knows your business better than you. Once you have your strategy in place and executives in alignment, the next step is to consider your business needs. At this point, it’s important to know what problems need solving and which obstacles are preventing you from achieving your goals. By examining your current and future business needs and using them to drive your strategy, you avoid the common pitfall of thinking the ERP software itself will solve everything.
Consider software as a tool. It alone is not going to cut your costs, increase revenue, or ensure healthy profit margins. You must leverage the power of software to help you do those very things. Once you understand exactly what you need to do to achieve your goals and recognize software as a tool, not a crutch, you’re well on your way to success.
3. Conduct Your Due Diligence
Research is a necessary evil when it comes to software selection. The number of choices available is staggering, and yet, the market keeps growing. These days, it’s not necessarily the wisest choice to select a software vendor based on name recognition or market share alone. Instead, it’s better to narrow down a pool of candidates and create a shortlist of vendors that can accommodate the needs of your organization — one whose offerings fit your specific goals and business needs the best.
This is a massive undertaking, but don’t panic. It’s easiest if you break it down into three phases:
- The research phase is where you begin your software search. During this phase, it’s a good idea to study categories of software vendors or groups of companies that make similar products. Start broad and slowly begin to whittle down a list of potential partners. This is also a good time to tap into a technology-agnostic third-party that can help you dial in on the right software vendors for your specific needs, especially if you are not familiar with the various software solutions you are researching. Once you narrow your shortlist, you’re ready to move on to the next phase of software selection.
- In the discovery phase, you will get to know your chosen software companies and they will get to know you. The discovery phase is all about an exchange of information. You share your business needs and your vision for achieving them. The software vendors share their capabilities and whether they can deliver your most- wanted features. During this time, make sure to talk to sales representatives and submit RFPs. This will help you ascertain whether or not a product will deliver what you need.
- Software Demonstrations
- Beyond discovery, the last piece of the due diligence puzzle is to test drive the software and see how it runs with real variables from your organization. This phase gives your team a chance to see how things actually run and delivers key insight into how well your organization will adapt to the new software in practice.
4. Plan For Failure
Digital transformation is like a boxing match — everyone has a plan until they get punched in the mouth. ERP implementation happens in the real world, where things go wrong. The best way to build toward a successful implementation is to have a contingency plan. By predicting the risks you are most likely to encounter, you will be all the more prepared when things go sideways.
5. Prioritize Organizational Change Management
One risk in particular that likes to hide in organizations’ blind spots is organizational change management. Many companies spend tremendous time, money, and energy going through all the steps above, yet they don’t fully consider how things will operate when new software is live. Behavior is one of the hardest things to change. Unless your organization as a whole accepts the new strategy, technology, and processes actively and with open arms, the new ERP system that you just purchased is essentially good for nothing. The success of a digital transformation lies in the people that use the new technologies every day, and it’s important to account for the expected resistance that comes with any type of organizational change.
As the Director of Strategy and Transformation at Third Stage Consulting Group, I’m here to talk all things planning, research, and software. If you’re ready to talk shop about the best digital strategies and transformation tactics, please reach out to me directly. I’m always happy to start a discussion or brainstorm new ideas.