Achieving Digital Transformation

A true passion of mine is leading teams through digital transformations. Getting digital transformations started are often really tricky. There is usually a driver that has gotten the program started. Sometimes the driver is that the old system is technically obsoleted. Other times, the business has added new features that don’t fit into old systems. And other times, it is a general desire from executives that is time to invest.

When the team first comes together, the number one question is what does the desired outcome look like. Everyone agrees that we are going to improve the situation but to what extent The toughest question that the team faces is the amount of change that will be allowed in business processes. This pivotal moment is important because it defines everything that comes next. Is the system going to just be a replacement or a new way of getting word done. I often share the following three pictures with a story about a community in the mountains where the only access is a dirt road.

The community gets together and decides that the best decision is to pave the road. Paving the road will make the drive smoother and improve access when the road becomes too muddy. They build out the road and they have success.

They met every single objective and achieved success! Is that transformation? Or is it just a technology upgrade? Transformation would be creating a straighter road with less curves. It would drastically reduce the travel time. It would increase speed, efficiency, and safety.

The community lost the opportunity for true transformation. The cost of doing the road again is insurmountable. Even if they could save up again for redoing it, the straightening of the road will never reach the priority of the old dirt road. Everyone will just accept the status quo. If there was a transformational leader at the beginning of the project, there would have been an appeal to spend a little more money to achieve a more dramatic result. The community might decide not to be transformational but at least the discussion occurred.

The challenge on digital transformation team is getting the team to see the art of the possible. Just putting your processes on top of a new system is not going to get the expected results. Will the business benefit from the upgrade? Absolutely yes but the business will not maximize the investment that they made. In fact, the switch of a system may make things worse for the business and IT.

We all have heard or lived through these stories where at the end of the project there are a ton of grumblings. How many of these have you heard?

• “The business made us do it that way and now we have to live with it.

• “IT gave us this system and now we are stuck with it.”

• “The system is so clunky. I have to click 7 times.”

• "Every time the business wants something it requires us to change everything”

When starting a transformation project, the first step is to create a vision for the end state. To build out that vision, some analysis is required. It doesn’t have to take years and create a hundred page documents that no one will ever read. The analysis should be at the minimum meeting with stakeholders and watching users does their job. Even better would be to observe how someone else has solved the same problem. I focus on two key areas for this analysis.

• Identify the problems trying to be solved—One of the biggest challenges is identifying the problems that actually need to be solved verse the end state. Too often the solution is predetermined by the business to be some package like SAP, Salesforce, or Workday. The technology is probably a great solution. But identifying the problems they would like them to solve is really important.

• Understand the business—Sometimes there is not enough analysis of how the business works. It is important to understand the business works and the daily challenges that they are facing. The understanding can help identify problems that are easy to incorporate into design. But it can also highlight areas where the new system and existing processes don’t match.

The next phase is applying vision to the selected technology. It is critical that IT and the business cooperates on this phase. Without the cooperation toward the vision, the level of transformation and business benefit will be reduced. There are two key things that I stress in this phase.

• Leveraging the tool verse customizing the tool—There is a propensity of business and IT to modify the tool to match existing business processes. It is really important to adopt the process of the tool as fully as possible. There are several benefits to this. First, the make of the new system has put what they believe the best processes to use the system based upon the experience of other companies. Another good reason is that you will have longer deployment because it must be customized. And because it has been customized, you will have more complicated upgrades and may miss out from new innovative features.

• Agility is huge—Build and test rapidly with quick sprints. When transforming, it is important the business gets to see features as they get finished. This early feedback gives the ability to correct and adjust in future sprints. But most importantly, the sprints give the business ownership of the solution. The system is no longer an application that IT gave the business. The system is the solution that IT and the business built together.

Digital transformation is tough. There is no magic formula. As a digital transformation leader, you have to balance staying true to the vision and compromising at the same time. To do this, I always like writing a set of guiding principles early on the project. The guiding principles give concrete guidance to implementing the vision and helping with decisions. When discussions go awry and spin out of control, it is important to go back to the vision and guiding principles. The vision and guiding principles make the decision less about personality and back to what everyone agreed on.

The failures of digital transformation are expensive. Beyond the implementation costs, there are opportunity costs, new technical debt, and employee morale. But the rewards of digital transformation are huge! Companies can see efficiency gains, improved SLA, improved employee satisfaction, and most of all improved customer satisfaction. The rewards are definitely worth the risk but it requires everyone working together.