Why Defining "Why" is Key to Digital Transformation and ERP Implementation Success

Written By: Eric Kimberling
Date: May 19, 2023

When embarking on a successful digital transformation, it is important to ask a simple question: why? What is the specific information that needs to be known, and why is it necessary to ask this question?

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From a young age, I always had a strong curiosity and would constantly question the world around me. This inquisitive nature sometimes irritated my parents, and they would tell me to stop asking why and move on with my life. Although paraphrased, that was the essence of my childhood – a lot of curiosity and a constant quest for answers.

In the realm of digital transformation, I believe we can learn from our childhood curiosity. We should embrace the habit of asking questions, challenging the status quo, and questioning the current practices. For example, we should question why we are conducting projects in a certain way, why we rely on external vendors to dictate our project execution, or why we tend to mismanage project scopes. Today, I will discuss the importance of asking these "why" questions and identifying the areas that require such inquiries.

To further explore digital strategies, best practices, and gain valuable insights for your digital transformation, I encourage you to download our annual digital transformation report. This comprehensive report, published yearly, covers a range of best practices, tips, lessons learned, and provides independent software reviews and rankings. It serves as a valuable resource to kick-start your digital transformation journey.

Why Start A Digital Transformation Now

The first "why" question I encourage teams to ask is, "Why start your digital transformation now?" Why didn't you initiate it two years ago, or why not wait for another two years? What makes this the opportune moment for embarking on a digital transformation journey? The answer to this question may be evident, with a clear and compelling rationale. Alternatively, you might find yourself unsure, driven primarily by internal momentum or external pressure from software vendors. However, if you cannot articulate a response that aligns with tangible business value, well-defined strategies, priorities, and objectives, then it is likely not the ideal time to commence your digital transformation. At the very least, you should further clarify and articulate the reasons for starting the digital transformation at this particular juncture.

Now, please understand that it is highly probable that the present time is indeed suitable for initiating your digital transformation. Nonetheless, it is crucial to clearly define and communicate to your team why now is the opportune moment. Furthermore, it is essential to ensure that this answer to the question of "why now" becomes the guiding principle and beacon of light for your overall digital transformation efforts.

Why Do You Think Technology Will Improve Your Business

Another crucial "why" question to consider is, "Why do you believe technology will enhance your business?" Often, organizations have a technologically focused rationale for pursuing a digital transformation. For instance, their legacy system may be discontinued by the software vendor, or they may be relying on an outdated, internally developed legacy system without any support available. These are valid reasons to embark on a digital transformation. However, it is imperative to have a clear vision of how this digital transformation will not only replace outdated technology but, more importantly, how it will generate business value and optimize your operations moving forward.

In this regard, it is vital to ensure that the goals and objectives of your digital transformation and overall digital strategy align with your corporate goals and objectives. The digital transformation should support your organization's long-term goals and objectives effectively. Additionally, it is essential to define why you believe technology will enhance your business in a way that allows for quantification. How can you measure the anticipated inventory reduction, improvements in customer experience, or enhancements to demand planning and forecasting processes? It is crucial to translate these intangible and subjective business benefits, often emphasized by software vendors, into tangible and quantifiable business value. This is vital as you seek to answer the question of how technology will improve your business.

Why Should Your Employees Care?

Another crucial question to address during a digital transformation is: Why should your employees care? Why should they care about your organization undergoing a digital transformation, and, more importantly, why should they support it? This is where having a clear vision and the ability to articulate the goals and objectives of the digital transformation become crucial. Employees want to contribute to the success of the organization, as that is why they are working there in the first place. However, what matters even more to them is the personal benefit they will gain from the transformation. They want to know how it will help them perform their jobs better and, equally important, what their roles will look like once the digital transformation is complete. It is essential to provide clear answers to these questions and others, ensuring that employees not only care about the transformation but also fully embrace and support the project going forward.

Why Is Your Digital Strategy Different?

My next question to ask is: Why is your digital transformation strategy and plan unique? By "unique," I don't mean it in a negative way, but rather, how will you customize your digital strategy to align with your organization's current state and future goals? This is why the question of why your digital strategy is different is crucial. Your digital strategy should not rely solely on a generic or off-the-shelf transformation plan suggested by a vendor. Instead, you should use it as input and tailor it to suit your organization's specific needs.

Let me provide you with a quick example. If your organization is highly sophisticated and technologically mature, having gone through multiple technology transformations in the past, your profile, strategy, and plan will differ significantly from an organization that has yet to undergo a transformation since the 2000s. For instance, if you are transitioning from a 40-year-old legacy homegrown system to a cloud-based system, it represents a substantial transformation and a significant leap from your current state to your envisioned future. Consequently, your strategy and plan should reflect this unique scenario and differ from the digital strategy mentioned in the previous example.

Therefore, the question that needs to be answered here is: Why does our strategy have this particular shape, and, more importantly, what steps do we need to take to tailor our strategy and plan to fit our organization's identity and requirements?

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Why Wont The Chosen Technology Work For Your Business?

When undergoing a digital transformation, it is essential to adopt a critical mindset, even when you possess the correct or optimal solution for your organization. The purpose of this approach is not to sow doubt or second-guess your decisions, but rather to comprehend the potential drawbacks and compromises associated with that choice. In essence, when selecting a technology to serve as the foundation of your digital transformation, it is crucial to grasp the weaknesses and deficiencies inherent in that roadmap or direction, regardless of the chosen technology or software vendor.

Every technology or software vendor you consider will have its own set of deficiencies, weaknesses, risks, and trade-offs. Failing to identify and account for these aspects in advance can lead to complications later on in the project, causing deviations from your implementation plan and budget. Therefore, it is of utmost importance to question why a particular technology may not be suitable for your business. It is possible that most of the software will align with your requirements, but there might be that one percent where it doesn't align well with your organization. In such cases, it is essential to develop a sound plan for managing this weakness.

In reality, most organizations do not achieve a 99 percent fit; they may be fortunate to attain an 80 percent fit. Therefore, the lack of fit with the technology roadmap you are implementing is often more significant than a mere one percent. Regardless of the magnitude of the misalignment, it is crucial to have a clear understanding of the associated risks and trade-offs.

Why Might This Project Fail?

Another important question that organizations often avoid asking themselves is, "Why might this project fail?" Personally, I find this question intriguing and often pose it to our clients. Understanding the potential reasons for project failure is crucial, as it sheds light on the deficiencies or weaknesses within the organization that could contribute to or increase the risk of failure. This introspective question plays a vital role in increasing awareness and comprehension of potential pitfalls and challenges, thereby enhancing the chances of success in the overall transformation process.

When we ask our clients why the project might fail, we often receive responses that reveal past struggles with technology transformations, difficulties in adapting to change, or poor collaboration and integration of business processes. These insights are invaluable when embarking on a digital transformation journey. They provide the digital transformation team with focus, enabling them to proactively address and overcome these challenges and risks.

Asking the question of why the project might fail in your organization is highly significant. If you find it challenging to come up with an answer, I encourage you to persist and keep asking yourself that question until you do identify the reasons. There is always a underlying cause for potential project failures within an organization; the key is to identify and address those reasons.

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Why is Your Technology Implementor So Expensive?

One of the significant shortcomings of digital transformation projects is that organizations often rely blindly on their technical implementers to handle the technology implementation. This tendency is understandable since organizations are not technology experts, while system integrators, value-added resellers, or software vendors possess the necessary expertise. Consequently, organizations defer to them to determine the implementation approach, plan, and budget. However, this lack of knowledge and awareness should not hinder organizations from challenging and questioning the proposals put forth by the implementers.

This is a critical factor that allows many implementers to exploit their customers and overcharge them. Without asking pertinent questions, organizations may fail to understand why there is an excessive number of consultants at the project's outset or why detailed plans and future state processes have not been defined yet. These questions should be asked throughout the partnership with external consultants, and a good consulting firm would welcome such inquiries. Unfortunately, consulting firms and implementers often discourage questioning, claiming expertise and demanding deference, which is an incorrect response that organizations should not accept.

Therefore, it is vital to ask questions such as why the budget is set as it is, why costs are structured in a particular way, and why the project team is staffed in a specific manner. By doing so, organizations can challenge and optimize implementation costs while also maintaining ownership and visibility over the project. This level of understanding and ownership is crucial for organizations to sustain and manage the project effectively once the consultants have completed their involvement.

In summary, it is essential to question and understand the reasoning behind the implementation approach, budget, and overall plan. This empowers organizations to optimize costs, maintain ownership, and have a clear vision of the project's trajectory beyond the consultants' engagement.

These are a few key questions to consider as you undertake a digital transformation. It is ideal to ask these questions early on in your journey, but it's never too late to start if you haven't already done so.

I would enjoy brainstorming ideas with you if you are looking to strategize an upcoming transformation or are looking at selecting an ERP system, so please feel free to contact me at eric.kimberling@thirdstage-consulting.com. I am happy to be a sounding board as you continue your digital transformation journey.

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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