We recently wrote about the dark side of digital transformation and how there are inherent risks in today’s digital landscape. As it turns out, there is a key ingredient to mitigate these risks. Business integration is the key ingredient for a successful digital transformation.
Simply put, business integration combines the operational, organizational, and technical components of an initiative into a cohesive and aligned strategy and plan. When we look at digital transformation and ERP case studies, we find that business integration is often what is missing from transformation initiatives.
Part of the problem is that most ERP system integrators don’t do all of the key things necessary for digital transformation success. The good news is that there are plenty of effective ways to overcome this deficiency of the market and align the people, process, and technology components of your initiative.
Here are the five key components of an effective business integration component of an overarching digital transformation:
Most challenged transformations such as the SAP problems at Haribo and the SAP failure at Lidl fail to effectively align the initiatives with the company’s overall strategy. These and other companies too often rush into a transformation without a clear vision for how it will enable bigger picture goals. Instead of “paving the cow paths,” organizations need to first define how the overall transformation will enable the company’s strategic vision, goals, and objectives.
Don’t fall for the myth that business processes should be driven by software “best practices.” They don’t exist. Your own desired best practices are the only ones that really matter, so it is important to take the time to define your business processes early in your transformation (see also: when should business process management occur in your digital transformation?). This will provide a strong business blueprint for how your initiative will be deployed.
Many don’t understand the importance of ERP and digital transformation system testing. It’s basic common sense that software should be tested, but many gloss over the “business” solution component of the overall system. In other words, business processes, roles, touchpoints outside of technology, and other key components of business processes and workflows need to be tested as thoroughly – if not more thoroughly – than the technology itself.
Employee training and communications is just a small component of the entire “people” spectrum that needs to be addressed during a digital transformation. There are many commonly missing components of organizational change management plans, such as org design, cultural change, change impact, and a spectrum of other critical enablers of change. There is a direct correlation between the level of change effort you provide and the success of your digital transformation.
Too many companies implement new technology without focusing on optimizing business value or benefits realization. This is a mistake. A recent case study shows that operational disruption can cost a mid-size ERP implementation $5M or more than it should. In addition to minimizing post go-live disruption, we advise that companies focus on maximizing business value and business benefits to optimize return on investment. This is one of the key components of reaching the third stage of digital transformation.
These five ingredients will help ensure you leverage business integration into your digital transformation. Not coincidentally, these are five areas that we commonly help our clients through their digital transformation and ERP implementations. At the end of the day, your project should be more about business integration and less about technology.