The real cause of digital transformation and ERP failures isn’t what you might think.
When we hear about SAP failures at Lidl, the ERP challenges at Haribo, and other digital transformation failures, it’s easy to blame the obvious problems:
- We over-customized the software
- Our system integrator charged us too much and took longer than planned (aka “we got Accentured”)
- Users resisted the new system
- We didn’t handle organizational change management very well
- Our project manager wasn’t very good
- We suffered from scope creep
- The system that was delivered didn’t meet our needs
- Our data was a mess after it migrated
- There were bugs in the system
I could go on, but you get the idea. Perhaps you can relate to one or two of the things on this list. We also recently posted an article about how the little things are what causes digital transformation failure.
The real root cause of digital transformation failures
These are all important things to be concerned about, but the problem is that they are all symptoms of a deeper issue: misalignment within your own organization.
Sure, we can blame Accenture, Deloitte, Capgemini, and others for some of the challenges we face, but there is often a more fundamental root cause. If your entire team isn’t aligned, then your project will inevitable suffer from the symptoms mentioned above – among others.
Here are a few examples of how misalignment can negatively affect your digital transformation:
Unclear strategy = a digital transformation with no direction
If you don’t translate your corporate strategy and objectives into a clear and concise strategy for your digital transformation, it is going to flounder. Too many organizations jump right into their transformation without getting this strategic alignment. Everything from your decision-making, project governance, business process definition, and everything in between should be driven by your strategic direction.
A good solution to this problem is a strategic articulation map. This should outline how your digital transformation aligns with your overarching organizational strategy and objectives. Feel free to email me for a sample of what we facilitate with our clients.
Lack of clarity around business processes = a moving target for your digital transformation
We often see companies struggle with their business processes and requirements. Part of the problem is that system integrators try to convince their customers to simply sign the contract so they can start implementing the software, which will define how their business processes going forward.
Hearing this from system integrators is like nails on a chalkboard for me – and it should be for you, too. Today’s software is too flexible for there to be a simple, preconfigured answer for any business process – not to mention that your business should drive your digital transformation, not the other way around. For more on this topic, read our article about when business transformation should occur in your digital transformation.
Lack of strategic vision for your project = misalignment on the front lines
If your project leadership is not aligned with your corporate strategy and executive vision, then you shouldn’t expect the masses to be aligned, either. Where there is misalignment, there is also confusion, resistance, and a lot of chaos. These symptoms in and of themselves are enough to derail a digital transformation, so it’s a lot easier to good to the heart of the matter rather than trying to resolve the symptoms. Alignment should be a key component of your organizational change management strategy.
The solution? Digital transformation readiness.
If this sounds like a problem at your organization, don’t worry: all is not lost. Most companies suffer from misalignment to some degree – which is especially common among larger, more global, and complex companies that have growth through mergers and acquisitions.
The answer is to call a timeout before jumping straight into your transformation. You may be feeling the pressure from your system integrator or software vendor to start right away, but resist the temptation until you have a strong business blueprint in place before bringing on the army of software consultants.
Contact me if you would like to walk through a transformation readiness project framework that we have seen work well for clients in their SAP S/4HANA, Oracle Cloud ERP, Microsoft Dynamics 365, and other digital transformation initiatives. I’m happy to provide a technology- and vendor-agnostic framework to work from!
