Too many organisations today are still failing to get their business transformation process right. Often, says Sal Laher, chief digital and information officer & EVP, IFS, they delay them too long and then when they do run with a project, they find it fails to deliver the benefits they were expecting.
A recent survey by Copperfield Advisory (Copperfield), Insider, and Revolution Insights Group (RIG) evaluating corporate transformation, found that less than a quarter (22%) of companies in its analysis successfully transformed themselves. A 78% failure rate highlights just how difficult it is to transform an organisation.
In this article, I outline three main areas where businesses are getting transformation initiatives wrong and then provide three top tips, showing how, by addressing each of these areas, they can ensure projects remain on track, thereby successfully transforming (and digitalising) their business.
Why transformation sometimes goes astray
So, where exactly do organisations miss the mark in addressing transformation? First, they concentrate too much on customising solutions by justifying how unique they are. That’s a mistake. Organisations don’t customise Uber, for example. They use the Uber app as it is and the Amazon app as it is, out of the box. If businesses do not focus on simplifying business processes and, therefore, avoiding the customisation trap, they will find it challenging to achieve rapid time to value.
The second important issue is that organisations try to do too much. In fact, they often try to ‘boil the ocean’. We frequently see organisations scribing digital strategies that run into hundreds of pages about how they’re going to digitalise the whole company, but often they have bitten off more than they can chew. If the planning process is too complicated, it becomes more difficult to get senior level buy-in to the idea and the typical result is procrastination and delay.
A third major concern is that organisations run pilot projects and then find it challenging to bring those pilots back into the mainstream business. That’s often because they are effectively using two disconnected organisations, so when they try to bring them together, the whole project falls over. However, if they don’t properly think through and evaluate the resource capacity, change management and investment they need to support the pilot, they will struggle to broaden it to other assets or adjacent areas of opportunity.
Top three tips for business transformation success
First, to get the rapid results companies seeking out, they need to focus on transforming products and solutions that are evergreen: in other words, those that have universal, sustainable appeal and can easily access the latest features without the need for complex, disruptive upgrades. That’s what we do with our own solutions at IFS. We are in the Cloud; we are evergreen and we validate the approach by ‘eating our own dog food’ and using our own solutions internally.
Second, they need strong leadership to allow them to move away from the trap of endless pilots and too many customisations. They need a technology-focused C-Level leader who can own the project and take responsibility for making it happen. CIOs, CDIOs, and CTOS can’t afford to wait for someone else to take ownership of defining the value and roadmap to transformation. If they do, the opportunity that transformation presents to the business may well be missed.
Instead, these technology-focused executives, working either alone or in tandem, need to seize the initiative. This takes boldness, conviction and passion. To kickstart business transformation means making it clear that manual time-heavy; customised, and over-engineered processes will no longer be tolerated because they are bad for the organisation. This leadership and drive will be key to the success of any project.
Part of that strong leadership will involve achieving consensus across the organisation of the need to start small and take incremental steps to deliver value over time. These leaders need to make certain that the business should never try to deliver an enterprise-wide transformation all in one hit only to end up mired down in overly-complex projects that fail to deliver on their goals.
Such an approach will almost certainly lead to endless debates and multiple complaints that the process is too complex and is moving too slowly. Indeed, with this all-in-one methodology, stakeholders will inevitably become concerned that the business is consuming too much resource, time and effort in the transformation drive.
Businesses must instead ensure they identify projects that can generate fast results. They should for example, start with one process; one department; one customer experience; one product, and concentrate on getting buy-in enterprise-wide. The management of supplier invoices was a key area IFS focused on initially.
Rather than wrestling with mountains of paper globally, 84% of supplier invoices now come in electronically, via PDF, EDI or on a digital platform. And the system can instantly check if the amount, the purchase order, the goods received and the VAT number match. If they do, it is all done. No human hand touches that invoice as it goes straight through for payment. Typically, internal stakeholders are fast to see the benefits of this kind of initiative, and fast to buy into them. That then kick-starts the next stage of the wider business transformation.
Achieving that step-by step buy-in at each stage of the process is critically important here. That’s ultimately the key learning point of any project of this kind and the most important of these three key tips. You need to showcase your achievement through quick wins and ensure that achievement is made clearly visible to every stakeholder. If you want to avoid transformation projects getting bogged down and failing to demonstrate clear progress, a step-by-step approach must be the way forward.
An additional tip I always share with all C-suite executives I interact with is to kick-start transformation by adopting a SaaS solution in the Cloud. Those organisations that do this will reap the rewards by driving time to value; staying evergreen and upgrading cadence; security and operations into the bargain.
What getting transformation right delivers
Organisations that make a success of business transformation are likely to achieve a raft of benefits. In manufacturing, digitalisation-driven augmented and virtual reality tools are helping in multiple areas, including repair maintenance, training and quality control. In service management, it can help businesses achieve a 360-degree view of the customer and scale out connected infrastructures quickly and easily. In aviation, it has helped support new predictive maintenance techniques. And, across every business, it supports the use of data analytics that helps inform business decision-making and streamlines business operation, while helping drive business advantage and competitive edge.
The author is Sal Laher, CDIO & EVP at IFS.
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