How to Integrate Operations During a Digital Transformation

Written By: Eric Kimberling
Date: February 13, 2023

One of the primary reasons why so many organizations go through digital transformations is because they want to start to act like one company, they want to integrate and standardize operations but what exactly does it mean to become one company, as part of your digital transformation? 

Most of the clients that we work with throughout the world are mid to larger organizations that are growing through acquisition or they're growing organically and over the years they've developed multiple operating models and multiple ways of operating as a business. In some cases they've acquired other businesses that have continued to operate independently or differently than the parent company or they end up with a bunch of different companies that all have different ways of operating.

Oftentimes this is the impetus or the catalyst for why organizations want to go through a digital transformation, is to harmonize those processes, to standardize the operations and start to act like one company so what we want to do today is talk about what it means to be one company and what is the roadmap that we can follow to help us get there.

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Define Future State

The first step in ensuring that you start to act like one company is to define your future state. Oftentimes, executives struggle to articulate what it means to be one company, they know intuitively that they're operating differently in silos, in a fragmented way, they know intuitively that they're leaving efficiency gains and potential business value on the table by not being one company but they don't necessarily understand the details of what that means.

One of the key things we can do as an organization and as a team is start to articulate, define and document what it is to be one company. For example, some organizations' definition of one company might be that we centralize a shared service model for our HR, IT or accounting and finance or other back office functions. Other organizations might want to standardize their their product list or their product offering, others might want to create a more robust Human Resource Management capability, there's a lot of different things it can mean to an organization.

The key here is to define what it means to you as an organization. What's the business value you're trying to achieve? There's different dimensions of that future state; the first is of course the strategy, what is the general strategy of the organization? What is it you're trying to do in the next three to five years and ultimately how could the one company concept help enable that?

There's also the business process side of things, how can we harmonize business processes and make them more standardized, more consistent or at the very least more deliberate in how we run the business to ensure that we're taking full advantage of our size and scale. There's also the organizational piece, ensuring that we look at the way the organization is designed, the way it's built, really rethinking how we've added roles and people to the team over the years.

Oftentimes, we inherit certain organizational structures and certain competencies that may or may not be consistent with our one company model, so we really need to take a step back and look at what is the organization today and ultimately how are we going to define that future state of the organization. 

Then, last but not least, you have technology. What are the different technologies we have in place now, what are the different platforms we have and ultimately what do we want that future state to be in terms of consolidating or at least creating a more integrated set of technological solutions. 

Assess Current State

Once we've defined the future state, we also want to define the current state and look at what the gap between what we want to be when we grow up is and where we are today. This is actually an activity you could run in parallel, some organizations choose to do the current state assessment first, to help inform and determine how they might define the future State, other organizations will define that future state vision first, then look at where they are today and figure out how they're going to close that gap.

So, it really depends on how self-aware you are and what your general strategy is but regardless you do want to make sure that early in the process, you define what your current state is, what are your current business processes, where the pain points are, where the biggest opportunities for improvement are, how's the organization structured today, what is the culture today versus what you want the culture to be tomorrow, what kind of systems and platforms are you using today and really just understanding the lay of the land. 

Oftentimes, what happens is, especially when you go through an acquisition, organizations don't fully understand the full inventory of people, processes and technology that they have and even organizations that have grown organically, likely through the years, have that same problem as well. So really understanding that current state is very important and what this also does is it helps us understand and have a better clarity of how big of a jump this is going to be from where we are today and where we want to be in the future and ultimately we can define a transformation plan that helps us close that gap.

Define a Business Process Improvement Plan

As we move into planning and execution mode of our one company strategy, now we define what our business process improvement plan is. This is where we define what the business process improvements are, how we want them to change and we can actually start deploying process improvements in some cases, even without investing heavily in new technologies, this is where we can start to get people on the same page with standard operating procedures, general processes and workflows. Knowing that later on we will bring in potentially new technology to help us further enable those commonalities.

Frequently we find that a good subset of potential process improvements can happen with or without technology, in which case, you can get pretty immediate value and start moving the needle toward that one company vision, even before you start deploying expensive technologies, so that business process improvement plan is something that's very important, it's something you can use to to drive changes that you can make right now to your operations and potentially even incremental changes to the technology that you have in place today.

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Define The Organization Change Plan

Next, we want to define the organizational change plan. This is especially important if our one company strategy is going to entail significant reorganization or significant changes to roles and responsibilities. We want to start moving the needle and moving toward that future state organization sooner than later and again we don't need to necessarily wait until we have new technology to start moving in that direction, we can start reorganizing, reassigning roles and responsibilities now and we can certainly even start to prepare people for longer term changes that may not be coming now but they might be coming later with new technologies.

It's sort of a two-prong approach, looking at what changes we can make now to get immediate value from an organizational perspective but also looking at longer term changes that we can start to enable and prep for in the future. 

Define a Technology Plan

The last major step in helping us on our journey to becoming one company is to define our technology plan and roadmap. How are we going to consolidate systems, how are we going to rationalize systems, how are we going to decommission systems we don't need anymore, how are we going to integrate systems, what is the overall architecture, which systems are we going to replace? All those questions need to be answered and then we ultimately need to have a plan to help enable that overall strategy.

You may be wondering why we are talking about technology after we have already talked about process improvements and organizational changes as well and the reason technology is sort of a later step in the process, typically, is because you want technology to be the enabler of what that bigger picture vision and strategy is. Once we know what business value we expect to get out of the one company strategy, once we know what the business process model of the future is going to be and what the future state organization is going to be, now we can figure out how we use technology to help us get there.

Ultimately, we want to put this all together, the technology roadmap, we want to put it together with the process Improvement plan and the organizational change plan to ensure that we have a cohesive business transformation plan that doesn't just look at technology but looks at the people and process sides of things as well. That technology roadmap and plan is something that's very critical to ensuring that we become one company and start to act like one company. I hope this has provided you with some best practices and insights into how to manage the journey from where you might be today to your one company strategy.

If you are looking to strategize an upcoming transformation or are looking at selecting an ERP system, we would love to give you some insights. Please contact me for more information

Be sure to download the newly released 2023 Digital Transformation Report to garner additional industry insight and project best practices.

Kimberling Eric Blue Backgroundv2
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.

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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