It wasn’t long ago that we shared our top predictions for 2020. What a difference a few months can make.
Instead of envisioning how they might leverage blockchain, artificial intelligence, internet of things, and other strategic technologies, many organizations are instead dealing with a new reality. For some, resources are constrained due to illness or displaced employees. For others, revenues and budgets are lower – meaning less spending on ERP, human capital management (HCM), and supply chain management (SCM) systems.
Whatever the impact to your organization, chances are that you, your team, and your digital transformation initiatives are facing a different reality than in the 2010s. We are experiencing unprecedented disruption in the world around us. Our reality has changed. Our tolerance for risk has changed. Our operations have changed. And the list goes on.
With this new landscape in mind, here are the top 10 competencies we recommend for ERP, HCM, and SCM transformation initiatives in the 2020s:
It may seem that the world around us is changing very quickly – and indeed it is – which underscores our need to keep up with a fast-changing world. Many organizations were forced to make fast decisions during the crisis of 2020, so this competency will become more valuable in the future. Whether it is dealing with employee displacement, changing customer buying patterns, and/or supply chain disruptions, your organization will need to make fast and well-informed decisions in the future.
The shifting world around us raises a number of questions and potential vulnerabilities regarding our internal IT infrastructure. Do we have the right balance of cloud vs. on-premise applications and data? Do we have the right IT skill sets? Are we equipped to handle a remote workforce or displaced employees? We need to ask these and other questions as we assess our overall IT infrastructure. We also need to ask these questions through the lens of the economic and resource realities we face now.
Economic growth tends to bring a certain lack of discipline as it relates to digital transformation projects. We tend to have more blind faith in half-baked ERP systems and are more comfortable with an open checkbook for big systems integrators during god times. Those days are over.
Those most likely to survive the health and economic turbulence of the 2020s are the ones that are smarter with their technology investments. This may mean rightsizing your pre-2020 digital roadmaps, but it is also an opportunity to be more strategic in your initiatives. Rather than trying to consume a big SAP S/4HANA implementation, for example, you may be better served evaluating options such as best of breed ERP and other effective digital strategies.
Rather than outsourcing entire initiatives to systems integrators and other third parties, the strongest organizations of the future will place a higher emphasis on ownership and learning. They will take control of their digital transformations – partly out of necessity and partly because of lessons from past ERP failures – and they will become more self-sufficient overall. Those that are continuously learning will thrive in the future, so it is important to look for ways to build these competencies within your organization.
The business processes and competencies you thought you might need in the future have probably changed in light of today’s current events. For example, the coronavirus pandemic has altered the way manufacturers use ERP systems, while supply chain management transformations of the future will look much different than the past.
Effective business processes will be a key to your success going forward, so be sure to revisit your current state and redefine as needed. It is also important to note that your future state business processes may or may not align with the capabilities of the top ERP systems, so be sure to have this clear definition before investing in technology.
In addition to clearly defining your business processes, you will also want to build flexibility into your target operating model. For example, many of our clients are seeing the value of having the ability to quickly switch raw material vendors when health, economic, or geopolitical events threaten to disrupt their supply chains.
Another example: many clients are finding the need to quickly furlough, hire, and/or address employee health issues, which underscores the need for effective HCM systems. Although this has less to do with technology and more to do with the way you have built your business processes and organizational design, you will also want to make sure that your technology can support this required flexibility.
We learned from the post-Y2K bubble-burst and the 2008 financial meltdown that companies generally emerge from recession much more risk adverse. They simply don’t have the tolerance or resources to take on big risks, so they tend to become smarter and more conservative with how they manage big projects like digital transformations.
Going forward, risk mitigation will be the name of the game, so be sure to build this competency into your digital transformation initiatives. This should include a transformation quality assurance workstream to objectively identify and mitigate risks going forward. A good first step is to register for a complementary project audit of your transformation to look for opportunities to optimize for and align with the realities of today.
As reactive as we may feel in light of today’s current events, it is important to not forget about the big picture. This is where is becomes very important to achieve small-scale wins and do what makes sense for today – but to do so in the context of a longer-term strategy and plan.
This is where it is critical to define a long-term digital strategy and roadmap. You may not be able to do everything you would like to today – and things may have changed significantly since your last attempt to create a roadmap – but that’s ok. Independent and technology-agnostic ERP consultants such as our team at Third Stage can help define a strategy that makes sense to your organization today and where you are headed in the future.
The COVID-19 pandemic is a good reminder of how important human capital is to our organizations. It is also a good reminder of how important it is to build the competencies to take care of team members and address their needs – in good times and bad. Those that have invested in HCM systems such as Workday or SAP SuccessFactors (or other leaders in this space) find themselves better equipped to navigate these realities.
Some organizations are facing a displaced workforce. Others are making painful decisions about which employees to keep versus which ones to lay off. Still others are hiring aggressively as their businesses rebound from the economic fallout. Regardless of which phase you are in, building effective human capital management strategies, processes, and technologies will be a mission-critical competency that you will need to invest in for the future.
The world was already changing quickly leading up to 2020, but the pace of change has accelerated dramatically. In addition, organizations are taking on a bigger share of not only helping employees to navigate business changes, but they are also helping them face today’s health and economic realities. This fact is what makes change management #1 on our list.
In addition to learning new technologies, organizations need to learn how to navigate all the changes listed elsewhere in this top 10 list. Employees’ worlds have been upended by health and economic concerns, their safety, the well-being of their families, etc. In other words, they have moved down to more basic survival requirements on Maslow’s hierarchy of needs.
This has big implications on organizational change management. Change strategies and tactics of the past are no longer 100% relevant for the future, so we need to rethink how we approach this often-misunderstood competency. This video provides some tips that may help you navigate the new realities of organizational change management:
The 2020s will look much different than the past, so it is important that we redefine our strategies and plans to navigate these new realities. Hopefully this top 10 list provides some direction as you define what this future looks like for your organization.
Please feel free to contact me if you would like to arrange an informal conversation regarding your plans for the future. I am happy to be a technology-agnostic sounding board as you continue your transformation journey!