Digital Transformation Recovery

Written By: Eric Kimberling
Date: November 9, 2022

When embarking on a digital transformation, there are many opportunities for pitfalls along the way. It can be easy to get into trouble and to run into problems as you go through the transformation process. What should you do when you run into these sort of problems? That's what we want to talk about here today.

YouTube player

As you're embarking on any sort of digital transformation, whether it's an ERP implementation or a CRM, HCM, Supply Chain Management, Business Intelligence etc. it's really easy to run into issues in your transformation. In fact, it's more often than not that you will run into some sort of challenges, pitfalls or speed bumps along the way, so, what we want to do today is talk about what to do when you run into turmoil and how you recover the project. Even before that, how can you ascertain what the problems are and what the root causes are and really get to the heart of how to fix those problems.

Digital Transformation Recovery Step 1: Assess and Identify Potential Risks

The first way to resolve potential challenges or problems with your implementation is to avoid those challenges or problems in the first place. It's best to proactively mitigate risk and avoid the risk to the extent that you can. Obviously, this is a lot easier said than done and if you're reading this article, it may be that you're already in trouble but before we get to the heart of what to do if you're already in trouble with your deployment, it helps to back up and look at what can we do to avoid getting into those problems in the first place. That really comes down to program management, project governance and overall risk mitigation and project controls. If you can get the right governance and risk mitigation mechanisms in place and the project controls in place, you're more likely to identify these risks before they become problems.

One of the key challenges with digital transformations in general is oftentimes, if you haven't done a lot of transformations throughout your career, you don't recognize that you're in trouble until you see it and feel it. If you're more experienced or you're working with a partner that's more experienced, you should be able to identify and anticipate those risks and challenges and problems ahead of time and mitigate them before they become a problem. The problem with waiting until you feel the pain of a disruption, is oftentimes it's too late to fix those problems after the fact. It is imperative to really get ahead of those risks. 

The graphic below shows you a quality assurance framework that we use with our clients to help identify and anticipate what the risks are throughout the project. We will come back to this in more detail but i want to show you what that looks like and reference some of the risks that you might be facing in your transformation.

1kNOugpxewfw2bNh3L4qOf6XkLXQgjFbng5eqDI qcH4Mr1 Lw4GgpcnY41Pi LO3iCX8ybxpLCXaG9zr9TC5t8xQmKzroZorYUxVYkIcZwukgzQOkX9aH PUuY78J9nxVxgV1j2wyrwZpcpwFggKNrJNYUQ0NCGLWfBUT DjahkeI lW I4zGkEDWfDTQ

Digital Transformation Recovery Step 2: Evaluate and Prioritize Risks

Now, the next step once you've proactively identified what the risks are, is to now objectively evaluate those risks. Not all risks are created equally nor can you expect that you're going to mitigate and fully eliminate all risks that exist in a project. The framework i showed you in the image above is a good way to identify what the risks are but now we need to evaluate those risks. The key here is to not be overly optimistic and not to deny the fact that there are risks at any point in your project, even if you're just starting out, you should have identified a laundry list of potential risks or risks that are becoming realized within your organization.

If you haven't identified risk, you're probably either in denial or you're just not seeing what those risks are, so the key here is to recognize what the risks are to prioritize them and really attack the ones that are most important. We would all love to address all the potential risks but at the very least you should be addressing those risks that are of biggest concern and the biggest threat to the success of this transformation.

When we're assessing risk in a project what we're really looking at are symptoms of other root cause issues and so the key with risk mitigation is not to go attack the symptoms but to attack the root causes of what's actually causing those symptoms. Oftentimes, organizations find themselves in a situation where they end up over customizing the software that they're deploying. It's easy to think that the issue is the over customization itself, when in actuality the root issue is the fact that organizations resist change.

This is oftentimes the reason why so many businesses try to customize and force software to do things it wasn't built to do. Its imperative you don't ignore the customization issue but to focus more on getting after the root cause of the fact that the organization is resisting change. With each identified risk, we need to look at what is the real root cause of that risk.

Don't wait until you have all these symptoms that have percolated the surface of the project, you want to try to anticipate those pitfalls and actually attack the root cause. 

Most Common Risks in A Digital Transformation

Earlier in this article, we showed you a graphic of a quality assurance framework we use to help manage and identify risks along the way and while this framework is a great way to uncover and draw out what the risks are it doesn't necessarily tell you what the risks are and what those common challenges are that organizations face. Next, we will discuss the most common risks that we usually see as a root cause as to why so many organizations run into trouble with their implementations.

1. Unrealistic Expectations

One example of a common risk that we see in these sorts of transformations is misaligned or unrealistic expectations. Businesses think that they can implement the solution for x amount of time, with x amount of budget, with x amount of resources. In reality, that's not realistic. This is oftentimes something we see with our clients. Software vendors, system integrators and sales reps mismanage expectations and create this false expectation of what it's really going to take to get a job done, that's one of the most common root causes of implementation challenges and failures. If we have unrealistic expectations, we're going to end up cutting corners later on because we're trying to force fit our transformation into an unrealistic box of time, money and resources.

2. Misalignment as a Team

Another common challenge is misalignment. When a team is not aligned, it does not necessarily share the same vision of where the project is headed,  it's not rowing in the same direction.When the overall transformation doesn't align with the overall corporate goals and objectives, this creates misalignment and it creates headwinds on a project. It doesn't matter how great the technology is or how well you develop and deploy the technology if you're not aligned as an organization, you're going to run into a lot of trouble and that's going to present itself in a number of other forms.

3. Project Governance

Another common challenge is project governance. Project governance refers to when we're not managing the system integrator, we're not managing our internal resources, we're not managing the other third-party consultants. At the end of the day, you need project governance and controls that put you in charge and in control of the project rather than assuming that your system integrator or your third-party consultants are going to manage risk for you and manage the overall governance. 

4. Lack of Transparency

Similarly, lack of transparency into what your system integrator is doing and why they're doing what they're doing is something that is commonly a problem and this is why so many implementations go over budget, take longer than expected and ultimately don't have the internal ownership that you would expect. This can be because you've deferred too much to your system integrator and to your outside partners without enough transparency into what they're doing and enough visibility into what they're doing. At the end of the day, you need to have control over what exactly is being done by the system integrators.

5. Lack of Management

Last but certainly not least is organizational change management or lack thereof. A lack of focus on organizational change management will typically lead to other challenges and other symptoms. 

These are some of the most common risks that you may encounter on your projects so you want to make sure you're identifying these as potential risks for your transformation. Once you've identified all these risks, you want to make sure that you create a recovery plan, what is it we're going to do to get our project out of trouble and back on track. Like we said before, you start with the low-hanging fruit, start with the tasks that have the biggest impact on the project with the least amount of cost and effort and the least amount of disruption. Prioritize your remediation plan to really go after those low-hanging fruit issues as quickly as possible and then you work your way down the priority list to hopefully get to a majority of the risk that you've identified. 

Once you've done this and once you have this project recovery plan, it's important to also start to identify how we can proactively get ahead of those risks. Back to the first point, make sure that we don't just find ourselves in constant remediation mode but rather we remediate and then we get ahead of the risk and we start to anticipate better going forward. This is something we provide to our clients. We typically work with our clients to help anticipate risk, help them understand what the risks are before they become a problem, before the average layperson understands and feels the risk, so this is one way that you can do this is through an independent technology agnostic partner.

If you are looking to strategize an upcoming transformation, we would love to give you some insights. Feel free to reach out to me here with any questions you may have ryan.glisan@thirdstage-consulting.com

Be sure to download the newly released 2023 Digital Transformation Report to garner additional industry insight and project best practices. https://www.thirdstage-consulting.com/reports/2023-digital-transformation-report/

Author:
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.
Subscribe for updates
We never share data. We respect your privacy
Additional Blog Categories

Categories

Resources

Third Stage Consulting

Third Stage Consulting Group is a global thought leader in business transformation, ERP software systems, operational change management, and business advisory. Let us take your organization’s digital transformation to the Third Stage.
2022 - Copyright Third Stage Consulting Group LLC  |  All Rights Reserved  |  Website developed and maintained by Denver Web Design.
Privacy Notice  |  Terms of Use  |  Sitemap
crossmenuarrow-right