Digital Transformation and ERP Implementation Readiness: Why It’s So Important to Your Initiative

Written By: Eric Kimberling
Date: April 14, 2019

Most people think that there are two distinct stages in a digital transformation. First you pick the right technology, then you implement it. But this traditional view misses what is the most important stage: implementation readiness.

When we ask ourselves why digital transformation failures are increasing, most problems can be traced back to before the implementation even began. In troubled implementations, project teams pick software and jump straight into implementation without having a clear blueprint and roadmap for where they’re heading. Challenges and symptoms that transpire later on can be tracked back to a lack of focus

As we’ve pointed out in other articles about what to do before beginning your SAP S/4HANA implementation and Microsoft Dynamics 365 implementation readiness, skipping the readiness phase of your project is a critical mistake. Yet system integrators such as Deloitte, Accenture, and Capgemini will often rush you into making this mistake.

Cliff diving into your digital transformation

We often refer to this phenomenon as cliff diving into your digital transformation. When you jump head first without a clear blueprint and plan, you take unnecessary risks, create needless chaos, and spend too much time and money on your initiative. The meter is running at a high rate while you work through the chaos and work to get alignment.

The solution: transformation and implementation readiness

Just like you don’t build a house without a proper blueprint and a general contractor in place, you shouldn’t start your digital transformation without taking the time to create your strategy and business blueprint. The time and money you invest in this stage of your project will save you exponentially more time and money later on in the project.

There are five key components of your transformation readiness process:

Strategic and executive alignment. This focuses on ensuring that your executive team is aligned on how much of a transformation your project will entail. For example, are we going to consolidate and standardize business operations across multiple locations? Or, are we going to make more incremental changes? Lack of clarity on key strategic decisions like these can completely derail a digital transformation.

Operational readiness. What will our business processes look like going forward? What are the major business process decisions we need to make in order to effectively lead the technical consultants in the right direction? What business process changes do we want to start deploying now – even before we go live with new software? These are all decisions that should be made during your readiness phase, which is when business process management should occur in your digital transformation.

People readiness. Organizational change management is always on the critical path of a digital transformation. You should take the time to assemble your internal change team and develop a change strategy and plan prior to implementation. Also, any organizational impacts defined in your requirements gathering phase should be addressed. Remember, these are all things that most ERP systems integrators don’t do well – or don’t do at all.

Technical readiness. Digital transformations typically require significant changes to your IT organization. You should start building internal IT support competencies as soon as possible so that you are not overly dependent on your ERP system integrator. You should define and develop new skills to support this future state, including standing up an internal digital transformation center of excellence.

In addition, you should also have a clear enterprise architecture plan and begin developing your data strategy. Chances are that you will need to integrate your core ERP system to other technologies and data sources. It is important to have this technology roadmap clearly defined before you start building the software.

Project governance and planning. You may have a draft implementation proposal from your ERP system integrator, but that doesn’t mean your project is ready to start. You will want to establish an overall program plan with activities required outside the system integrator’s realm. Organizational change management, data migration, and other key activities need to be incorporated as well. It is important to remember that this is a project that you own and are responsible for – not your system integrator or anyone else.

What does digital transformation and implementation readiness look like for your organization?

You may be about to begin your digital transformation project. Or perhaps you are in the early stages. Wherever you are in your journey, be sure to build transformation readiness into your overall digital strategy and approach.

Every company’s plan is going to look different, so please feel free to contact me to brainstorm ideas on how it might look for your transformation. I’m happy to help be a sounding board for your project!

Eric Kimberling
Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.
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