Digital transformation is dead – or at least it should be.
The brutal truth is that most ERP vendors, consultants, and analysts have been far too focused on the “digital” in digital transformation and not focused enough on “transformation.” It’s high time that we put the outdated modes of digital transformation to rest for good.
The problem with digital transformations
For decades now, organizations and project teams have made the same mistakes and fallen into the same pitfalls. Software vendors further complicate these problems by throwing shiny new technologies at digital transformations under the guise of technology being the answer to these common mistakes. Industry analysts complete the endless circle of repeated mistakes by issuing reports to perpetuate the vendor sales messaging (Gartner’s Magic Quadrant, for example).
Here’s the problem with this model: technology can’t save you from – nor can it in and of itself cause – digital transformation failure. As the top ERP failures of all-time show, people- and process-related issues are more typically the culprit for transformation challenges. Technology isn’t easy to implement, but it’s typically a lot easier than addressing the human, behavioral, and operational sides of things.
There are several things that we can do to treat digital transformation as more of a business transformation rather than a technology initiative. Below are some things to keep in mind, as this video explains in more detail as well:
Business process management
One of the biggest problems during digital transformation is a lack of focus on business process management. I’m always amazed at how flippant and lackadaisical most project teams are when it comes to this critical success factor. Organizations tend to either misjudge the timing of when business process management should occur during digital transformation, or worse yet, they glaze over this important detail.
There are a few reasons why business process management should occur as early in your transformation as possible:
- It helps define areas of competitive advantage and strength, so you can ensure that your new technology enables those advantages rather than diluting them
- It provides a blueprint for how you want your business processes to look, which prevents this critical path activity from impeding your systems integrator’s ability to efficiently design and build the technology
- It saves the wasted time and money that comes with making business process decisions while the meter is running on expensive software consultants
To make a long story short, you want your business processes to drive your technology rather than technology driving your business. The exception to this might be commodity processes such as accounts payable, but in general, your processes should be defined up front. This video explains how to do this in more detail:
Organizational change management
Change management is another issue that has contributed to the death of “digital” transformation. While companies spend too much time untangling the complexities of technology and making business process decisions, they choose or simply forget to nurture the people side of change. This is a big mistake.
Rather than being an afterthought that focused on end-user training just before go-live, organizations would be better served investing heavily in their organizational change management strategy and plan. In fact, I have yet to meet a CIO, CFO, executive sponsor, project manager, or project manager who thought they had over-invested in organizational change management after the fact. Putting more effort into this workstream potentially delivers the highest return on investment of any transformation activity you might focus on.
Executive and stakeholder alignment
Misaligned executives and stakeholders are the silent killer of digital transformations. Companies and teams that are not on the same page with where they are headed will fail in their transformations, no matter how great the technology.
The problem here is two-fold: 1) you can’t see, touch, or feel misalignment, and 2) software vendors and systems integrators aren’t good at identifying, measuring, and remediating alignment. This problem is further magnified by the fact that many downstream problems – including several mentioned in this article – can be traced back to internal misalignment. Unfortunately, not many organizations or project teams understand how to get executive alignment on digital transformations.
The good news is that executive alignment can indeed be measures, analyzed and remediated. This video explains in more detail:
Technology is simply an enabler
Technology is arguably the least important part of digital transformation – yet it typically receives most of the attention, resources, and budget. All of the top ERP software vendors, systems integrators, and industry analysts all tout the significance of technology, which further fuels this misconception. This is another reason why it’s time for us to acknowledge that digital transformation is dead.
Technology should be treated as an enabler rather than a driver of technology. It’s understandable why you may want to be led by software vendors into the squirrel-chasing exercise of exploring predictive analytics, internet of things, artificial intelligence, and other cool new technologies. Just remember that these things don’t really matter in the grand scheme of things.
What matters is getting your people, processes, strategy, and alignment right. If you do these things well, you have a strong foundation to begin from. But if you bite off more than you can chew by overcomplicating your technology landscape, your digital transformation is destined to fail.
Creating your digital transformation strategy and roadmap
The best way to navigate your digital transformation is to create a solid digital strategy and roadmap. The only catch is that your digital strategy should focus less on “digital” and more on people, process, strategy, and alignment. More importantly, your digital strategy should be unique to you, while also being aligned with your overarching corporate strategy and transformation roadmap.
Feel free to contact me if you would like to brainstorm how your digital transformation might best be defined for your organization. My team and I are happy to be an informal sounding board for you as you continue your transformation journey!