Most Common Digital Transformation and ERP Implementation Myths and Mistakes

Written By: Eric Kimberling
Date: January 30, 2023

When working with digital transformation project teams throughout the world, we hear some pretty crazy things. What are some of those crazy things that we hear every day from project teams? 

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When we work with clients, we hear a lot of interesting opinions and biases about how Digital Transformations should look but there's a handful of things that we commonly hear from clients and their project teams that are particularly harmful to digital transformations. What I want to do today is talk about some of those craziest things that we hear from project teams on a regular basis and more importantly, understand what we should do as an alternative to those crazy things. 

There's No ROI in Digital Transformation

One of the most common, crazy things we hear from project teams throughout the world is this concept or this idea that there's no ROI in their Digital Transformation. The reason we hear this so often is because organizations oftentimes are going through digital transformation because they have no choice. Their software is outdated, their business can't scale, the software vendor has sunset the product that they're on right now and they for whatever reason have to move to a new technology.

There's no problem with that on the surface, that is the reality of how many organizations work and what they're facing here today but the problem is when project teams assume that there is no ROI, they're doing this because they have to and if you don't have an ROI or a clear vision of what your ROI is, you're not going to have a guiding light to direct you in terms of prioritizing and focusing strategically on the technologies and the aspects of digital transformation that are going to be most important and beneficial to your project.

If you don't do that, you're going to end up with poor project governance, you're going to lose control of your project and you're more likely to spend too much money on your transformation with little business results to show for it. So, if you're hearing the refrain within your organization or your project team that there is no ROI, there's no need to define a business case, I would highly encourage you to rethink that assumption.

Its just An IT Upgrade

Another crazy thing we hear from client project teams is the idea that this is just an IT upgrade we're just simply lifting and shifting, replacing one legacy system with a newer product and therefore it's not going to be that difficult for us to go through the project and we can probably get it done pretty quickly. The problem with this fallacy is that it's not true. Second of all, it's especially not true in today's day and age where today's modern ERP systems and enterprise technologies are a lot more sophisticated than technologies even just 10 or 20 years ago.

So, organizations that are moving off systems that they've been using for 5, 10, 20, 30 years are absolutely going to find that this is much more than just an IT upgrade and in fact it's going to have a large impact to the organization that equates to more of a business transformation rather than just a technology upgrade.

So if you hear people within your organization or your project team saying that this is just an IT upgrade and it won't be that difficult, be sure to think twice before believing that.

This Is A No-Brainer

Another thing we hear from client project teams often is “this is a no-brainer” and by this I mean any sort of decision that's being made as part of a digital transformation, especially when defining a digital strategy. A lot of times project teams become enamored by a certain type of technology or a certain way of implementing technology and they believe that this is a no-brainer, this is the right path for us. Every organization needs to find their right path, the best path that makes the most sense for them but the minute you start thinking it's a no-brainer, it's a slam dunk, it's a decision that you don't even need to think about, then that's a risk because what that tells me is that you're not understanding what some of the blind spots and risks and downsides are of that path.

Once you've defined a digital strategy that's the best fit for you as an organization, it shouldn't be a no-brainer because there's a lot to think about, there are risks and there's trade-offs that you're making, even when you've chosen and agreed on the best path for your organization. If you hear the concept that, this is a no-brainer, easy decision, slam dunk, let's move forward etc just remember that there's probably a dark side to whatever decision you're making and it's important to understand that so you can mitigate that risk and have realistic expectations about what the digital transformation will entail.

Because Gartner's Magic Quadrant Said So

Another crazy thing we see with digital transformation project teams when it comes to decision making is this idea that we're going to make a decision because Gartner's Magic Quadrant told us that that was the best solution. A lot of times organizations will look at Gartner's Magic Quadrant or other industry reports that show what the leading technologies are in any sort of category. While this could be helpful information and helpful inputs into your decision process, you certainly don't want to use that as the primary decision making tool. The reason being is that first of all there's different answers and different strategies that different organizations need to make based on their unique strategy and objectives. Second of all and even more importantly, Gartner and other industry analysts are paid by the software vendors to produce those reports and those magic quadrants that are telling you how great their software is.

So anytime you hear someone on your project team say “hey we should deploy product a, b or c because Gartner's magic quadrant has them in the top right quadrant” then you should take that with a grain of salt and recognize that that is a vendor influence input that you're using in your decision process. There's no harm in using it as an input but you also need to recognize it for what it is and take it with a grain of salt.

Change Won't Be Difficult For Our People

One of the most common crazy things we see from transformation project teams is this idea that “change won't be hard for our people.” It's easy to fall into this trap of thinking that change management and the human adoption piece of transformation won't be difficult for your organization because your people are good people, they want to do what's best for the organization, they care about their jobs, they care about the organization, they want it to be better etc. 

On the surface, it sounds like your employees are probably going to be on board with any changes that might come out of a digital transformation, the reality however is no matter how well-intended employees are, they tend to fear and resist change when they realize how it's going to affect them and you add to the fact that technology generally changes people's jobs more than they realize and suddenly you find part way through the project that there is resistance to change.

Again, these are good people, they're not intentionally resisting change, they're not trying to sabotage the project, it's generally coming from a good place but at the same time we're all human. The minute we realize that our job is being disrupted or that part of our job is going to be automated or there's some sort of perceived threat to our job, we will absolutely start to resist the change and you and I and everyone else watching this video are likely to come to that same conclusion. So anytime you hear a project team or an executive saying that change isn't going to be hard for this organization, we're not that worried about change management, that's usually a red flag that there's something else under the surface that's not being recognized by the project team.

We Need To Do This Now

Too often organizations wait to start their digital Transformations until they're already behind, they've waited too long to start a project against a deadline for a vendors sun-setting of a legacy product or they've already broken the system they're on and now they've got to hurry and Implement something new to replace that system.

It's understandable that organizations oftentimes find themselves in reactive mode, they're trying to fix a problem and put out a fire and get to the next phase of their evolution as an organization. I don't want to dismiss the need for a level of urgency within an organization but too often project teams are too urgent, they're too reactive, they're focused on speed too much and they're not focused on doing it right. 

What ends up happening ironically is in their focus on speed and their quest to do things faster, they end up actually taking longer because they make a lot of mistakes and don't do the proper planning that they should be doing up front and it ends up taking them longer than if they just would have slowed down early on, gotten a proper plan, built an implementation readiness program, put a change management plan into place and then start deploying technology. That path is generally going to go a lot faster, nine times out of ten, than if you just rush and jump straight into your implementation. Anytime you sense that the project team in the organization as a whole is pushing too fast, too soon for a digital transformation without doing the proper planning and the proper readiness steps, then you should know that's a red flag and something you want to keep an eye on.

We’re Not The Experts

One of the more subtle crazy things we hear from project teams is “we're not the experts.” Therefore, because we're not the experts, we need to bring the system integrator in or the software vendor or the implementer to come do this all for us. While this sounds reasonable enough and doesn't sound crazy on the surface, the problem with this mentality of “we're not the experts” is that it creates a sort of learned helplessness or a self-fulfilling helplessness. 

We assume that because we don't have the answers, we're not experts in digital transformations, we're just going to outsource this and push as much as possible off to our system integrators and software vendors and implementation partners, as a result we don't end up having ownership of a transformation that's going to affect us for years to come, long after the software vendors are gone. So, while it's true, yes, you and others within your organization probably are not experts in digital transformation, you can certainly lean on third parties and you should lean on outside experts to help you through your transformation. 

Lets Do An Agile Implementation

The digital transformation and software implementation space is notorious for massive costs, overruns and overall failures and the industry's reaction to this and the solution that they've come up with is to focus more on agile implementations rather than what software vendors have called in the past, the waterfall approach. 

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I'm not going to go into a ton of detail here but to summarize here for the purpose of this article, waterfall is sort of the sequential, traditional way of doing implementations. You have clear sequential activities beginning with requirements, definition, design, build, test and you end up with a solution after you've gone through all those phases. You still do all those activities in an agile environment but agile is more focused on getting technology out quickly, learning from mistakes and adjusting and pivoting and improving the technology. The reason this has become so in-vogue in recent years is because, again, it's a reaction to the fact that so many digital transformations of the past have become big and bloated, cost overruns and a lack of business value.

So now a way to get past that is to say now we're going to do an agile implementation. The problem with agile implementations is it creates a false sense of security that the agile itself will fix the problem, when the problem in the past wasn't necessarily that it's waterfall versus agile but it's that you didn't have a clear vision of what you're trying to accomplish, you didn't have the right project governance and controls in place. So anytime you hear someone on your project team say this is an agile implementation, this is going to be different, take that with a huge grain of salt.

These are some of the craziest things I've heard project teams say as part of their digital Transformations.

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 eric.kimberling@thirdstage-consulting.com

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.

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.
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