A Digital Transformation is a significant investment for any organization. Notwithstanding the level of investment, a digital transformation can encompass challenges that even the most highly skilled and accomplished executives will struggle to negotiate. Digital Transformations are more than just technology projects. They are major business initiatives requiring a level of leadership, governance, and accountability that smaller IT projects, frankly, do not. At MSS Business Transformation Advisory (MSSBTA), we strongly encourage executive sponsors, who are considering a digital transformation, to place Transformation Oversight on their agenda during the initial stages of any major technology initiative.
What is a Digital Transformation?
A Digital Transformation is the adoption of technology to transform services or businesses, through replacing non-digital or manual processes with digital processes or alternatively, replacing older technology with newer technology.
What are the Benefits of Digital Transformation?
The overarching objective of any Digital Transformation is to derive a set of benefits that outweigh the cost of the investment. In other words, when an organization decides to invest in a digital transformation, there is an explicit expectation of a Return on Investment (ROI). This expectation can usually be categorized in one of the following areas:
- Increased Profits. A digital transformation can lead to increased revenues and new opportunities by delivering a competitive market advantage.
- Improved Customer Experience. Customer experience is now outpacing price point as the most important factor in choosing with which company or organization customers choose to do business. A positive customer experience promotes loyalty, helps you retain customers, and encourages brand advocacy.
- Enhanced Data Collection. A digital transformation can improve an organization’s ability to collect data and provide data-driven customer insights and market intelligence. Better market intelligence can inform strategy and lead to better decisions.
- Improved Operating Efficiencies. A digital transformation can increase internal productivity by automating routine processes and transactions resulting in improved efficiencies and increased transaction speeds.
- Reduced Costs and Resource Requirements. With the advent of cloud computing, an organization can significantly reduce reliance on user-owned hardware and infrastructure maintenance costs. Automation of routine tasks can also allow an organization to shift investment from low skill labor to higher skilled, more value-added jobs.
- Greater Resource Management. Automating processes has the potential to greatly improve transaction speeds and increase the capacity of an organization to create more volume with the same number of resources. It can also allow organizational leadership to have better visibility; and therefore, make better decisions on where to allocate resources.
- Improved Collaboration. Digital transformations can improve internal collaboration especially in remote work environments and multi-location organizations. This improved collaboration tends to result in improved employee work satisfaction and greater organizational agility.
What is the Top Challenge in Digital Transformation?
The top challenge for any organization executing a digital transformation is how to provide sufficient Leadership, Governance, and Accountability for the Digital Transformation effort.
Leadership
We often see executive sponsors falling short in clearly communicating a vision, aligning stakeholders, defining the project organization, allocating resources, and establishing clear roles and responsibilities. Sometimes it is a matter of an executive sponsor not having the knowledge, background, or skillset to know what needs to be done. More often, it is a matter of negotiating competing priorities that tax the bandwidth of the executive sponsor, and negatively impacts his or her ability to provide the necessary leadership for a digital transformation.
Governance
It is easy to fall into the trap where your vendor(s) manage you and not the other way around. An organization’s internal resources usually do not have the skill, capacity, insight, and tools to provide good governance for its vendor(s), or even its internal resources assigned to the project. This often manifests itself in the underdevelopment of KPI’s, and reporting tools. Without this governance structure, there is a lack of visibility into how the project is being executed, the issues, and the potential implications to budget, schedule, scope, and quality. As a result, there are often ‘surprises’ that could have easily been prevented.
Accountability
In any major technology initiative, uncertainty is the rule rather than the exception. There will be things that happen that could not have reasonably been planned for during the initial phases of the project. When uncertainty raises its ugly head, we often see finger pointing and the blame game, and no one stepping up and taking accountability. Accountability problems can ultimately result in delays, costly change orders, and a mismatch between expectations and the delivered results.
What are some other Challenges in Digital Transformation?
Digital Transformations are extremely demanding business initiatives. Although the top challenge is providing sufficient Leadership, Governance, and Accountability, there are plenty of other challenges. Some of these other challenges include:
- User Adoption/Change Management. Executives often underestimate, and fail to properly account for the “people side of change”. When an organization undergoes a digital transformation, it asks its employees to adopt and trust an unfamiliar new technology. Change is hard for many people, and failure to adequately manage the “people side of change” can quickly lead to your own employees undermining the business changes you are seeking. We have seen these “people issues” range from low knowledge levels and incorrect usage of the new technology, to reversion to old processes, poor accountability and ownership, all the way to active resistance of the technology itself.
- Insufficient Resourcing. Leaders often underestimate the burden of a digital transformation on internal resources. They miscalculate the time and effort required and fail to budget appropriately for extra resources to get them through the digital transformation process. Digital transformations are taxing initiatives that will test your organization’s ability to prioritize and focus. Failing to budget for this surge in resource requirements often results in delays and cost overruns.
- Complex Legacy Technology Issues. When new technology is introduced, something needs to happen with the legacy systems. Sometimes this involves integrations because the old technology is still needed for some key business functions. Usually, we see a need for data migration where information is extracted from legacy systems, cleansed, and then mapped to the new system. If hardware is being eliminated, what happens to it and the personnel charged with maintaining it? There are typically costs and other implications associated with retiring legacy systems that can be significant if you do not plan for them.
- Process Problems. We often see bad process getting automated. This happens because it is difficult for an organization to see its own inefficiencies. Employees become entrenched in a way of doing things and have limited insight into industry best practices. When organizations lack this perspective and insight, and do not plan for this surge in resource demand, good “to be” processes do not get fully developed or defined. This can manifest in “re-work” or a digital transformation failing to live up to the promised return.
- Confusion Between Project Management and Transformation Oversight. Many organizations believe they have the internal capability to fill the project manager (PM) role and Transformation Oversight will fall under the PM’s scope. If the initiative is an Information Technology (IT) project, the systems integrator (SI) or the independent software vendor (ISV) might have their own PM to manage their team’s activities. While it might be expeditious to just rely on their PM, and/or your internal resources, and assume that Transformation Oversight will happen, we have seen time and time again the PM falls short of expectations. Our experience tells us the reason the PM falls short is the executive sponsor failed to set the PM up for success by placing Transformation Oversight within his or her job description.
What is Transformation Oversight?
Transformation Oversight is the application of a structured methodology, toolset, techniques, and acquired skills to provide the Leadership, Governance, and Accountability necessary to deliver a successful Digital Transformation. Transformation Oversight addresses critical success factors beyond the traditional project management responsibilities. Properly executed, Transformation Oversight minimizes risk, ensures sustainable project success, and drives positive business outcomes.
What are the Components of Transformation Oversight?
What are the Advantages of Hiring MSSBTA for Transformation Oversight?
When you choose MSSBTA for Transformation Oversight, we take accountability for the overall success of the initiative. Here are five other reasons to choose MSSBTA for Transformation Oversight:
#1 Acquire expertise you do not have. By hiring MSSBTA, you can bridge your internal gaps in skill, knowledge, and experience. Executing a Digital Transformation is not your core competency, and there is a steep learning curve. Our consultants have the gravitas, experience, executive presence, and training to successfully provide Transformation Oversight to your digital transformation.
#2 Address temporary capacity issues. Executing a Digital Transformation will require a temporary increased demand on your internal resource requirements. Hiring permanent new employees is significantly more expensive and takes considerably longer than contracting a third party to address temporary capacity issues.
#3 Leverage digital transformation accelerators. Your digital transformation will certainly benefit from a proven and structured methodology, tools, and templates. By leveraging these accelerators, you can transform your organization faster, obtain the benefits sooner, and release internal capacity to continue to grow your business.
#4 The third-party factor. An independent third party will be in a much better position to hold your vendor(s) AND your internal resources accountable. A third party can come in, do the job, and exit without having to worry about damaging long-term working relationships.
#5 Think of it like an insurance policy. With any Digital Transformation, you are making a significant investment. You want to get it right. The potential cost of delays, change orders, and re-work can easily derail the business outcomes you are trying to achieve. You can think about hiring MSSBTA like purchasing an insurance policy for your Digital Transformation.
What other Digital Transformation Services can MSSBTA Provide?
- IT Strategic Planning. Are your technology initiatives aligned with your business objectives? MSS Business Transformation Advisory can provide tailored assessments to ensure your technology initiatives are driving expected business outcomes. We help you define your technology roadmap using best practice approaches, frameworks, and tools. Learn More
- ERP System Selection and Implementation. Have you selected the right Enterprise Resource Planning (ERP) System? What won’t your ERP Vendor do? Choosing an ERP System may seem like an overwhelming task for those who have never gone through the ERP System Selection process. It is a big decision your organization will be living with for the next ten or more years. MSS Business Transformation Advisory has unparalleled experience in ERP System Selection and Implementation. Learn More
- Vendor Selection. Which Vendor(s) should I choose? In today’s market there is a convergence in capabilities between technology vendors. Aligning stakeholders, gathering differentiating requirements, conducting market research, developing your RFP, scheduling demos, and evaluating vendors can be a difficult, resource-intensive, and time-consuming project. MSS Business Transformation Advisory can help you select the right vendor on an accelerated timeline. Learn More
- Enterprise Change Management. What is the impact of change on your people? Change is hard. A Digital Transformation is a huge change for any organization. We understand large technology initiatives do not typically fail for technical reasons; instead, they often fail because the “people side of change” is not managed well. MSS Business Transformation Advisory has unparalleled experience in Enterprise Change Management. Learn More
- Business Process Management. Are you automating good processes? A Digital Transformation is one of the best opportunities you will ever have to improve your processes and gain efficiencies by leveraging technology. MSS Business Transformation Advisory can help address any gaps in skill, knowledge, or capacity while simultaneously providing third-party perspective and insight to ensure you will design for success. Learn More
We can help
We would love to discuss your business. Send us a note and we will get back to you shortly! Advisory@mssbta.com
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