Today’s enterprises are faced with a stark choice: either they take steps to transform their processes, or they die
So, most businesses today realise transformation is a necessity not a choice. Yet, many are still either procrastinating or getting it wrong by running projects that fail to deliver the expected benefits. A recent survey by Copperfield Advisory (Copperfield), Insider, and Revolution Insights Group (RIG) looking into business transformation, found that just 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 key areas where businesses are making mistakes with transformation initiatives 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 misses the mark
Where exactly do organisations go astray 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, as a result, avoiding the customisation trap, they will find it challenging to achieve fast time to value.
The second major concern is that people attempt to do too much. In other words, they try to ‘boil the ocean’. Too many people write digital strategies that are hundreds of pages long about how they’re going to digitalise the whole company but that’s not how it should work. If the planning process is too complex, it becomes more difficult to get senior level buy-in to the idea and the result is procrastination and delay.
A third big issue is that organisations run pilot projects and then they find it difficult 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. If they fail to think about the resource capacity, change management and investment they need to put behind the pilot, they will struggle to broaden it to other assets or adjacent areas of opportunity.
Three tips for business transformation success
First, to get the rapid results companies are looking for, 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 move away from the trap of endless pilots and too many customisations. They need a technology-focused C-Level leader who can own the business transformation 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.
They need to seize the initiative and 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 be achieving consensus across the organisation of the need to start small and take incremental steps to deliver value over time. These leaders need to ensure that the business should never attempt to deliver an enterprise-wide transformation all in one hit and then getting mired down in overly-complex projects that fail to deliver on their goals.
That way will inevitably lead to endless debates and multiple complaints that the process is too complex and is moving too slowly. Indeed, with this all-in-one approach, stakeholders will inevitably worry that the business is consuming too much resource, time and effort in the business transformation drive.
Businesses need to instead ensure they define projects that can deliver fast results. They should for example, start with one process; one department; one customer experience; one product, and get company-wide buy-in. 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. And, if they do, it is all done. No human hand touches that invoice as it goes straight through for payment. Internal stakeholders can see the benefits of this kind of initiative, buy into them and 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 critical here. That’s ultimately the key learning point of any project of this kind – and the most important out of these three key tips. You need to demonstrate achievement through quick wins – and make that achievement clearly visible to every stakeholder. If you want to avoid transformation projects becoming bogged down and failing to demonstrate clear progress, a step-by-step approach has to be the way forward.
An additional tip I always share with all C-suite executives I engage 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.
Reaping the rewards
Get all this right and your business will stand to reap significant rewards. When done well, business transformation gives organisations a raft of benefits. In manufacturing, digitalisation-driven visual planning tools give users an overview of the factory production plan. In service management, it can recommend part replacements, and deliver repair instructions, asset drawings, and part location on the equipment. In aviation, it has helped support new predictive maintenance techniques. And, across every business, it supports the use of data analytics that help ensure effective and informed decision-making and helps drive market share and competitive edge.
About the Author
Sal Lehar is Chief Digital and Information Officer (CDIO) at IFS. His appointment at the end of 2018 sees him lead the talented team that is driving all information technology, as well as the continued digitization and transformation of IFS. In mid 2019 he was given additional accountability for IFS Facilities and IFS Procurement globally.
He has successfully overseen the largest technology transformation program successfully in the Company’s history – the move to IFS own enterprise ERP software platform, IFS Applications 10, along with major other components like a single new Intranet; Payroll standardised on a single platform; and many other solutions in the cloud that addresses the end to end processes of IFS.
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