I understand the situation you’re in: your ERP software and other enterprise technologies are dated, your employees aren’t as efficient as they could be, and you want to fix the problem ASAP.
Even though you might want to rush to select and implement a new technology, you need to build the foundation for your digital transformation initiative first. This means having a solid strategy, plan, and tactics that align with your overall business strategy. Answering these ten questions before you start, will help ensure that your project is headed in the right direction.
1. What is your overarching business strategy?
Many of our clients start off their projects by saying that they have no choice but to change their technology, but this alone isn’t a good enough reason. You should define what your higher-level business strategy is, so you can define how enterprise technology and business process improvements will support it.
2. How will your IT strategy support your business strategy?
Assuming you have a clearly defined business strategy, you will want to define a three- to five-year IT strategy and roadmap to ensure that your technology initiatives are aligned with the company. You may not yet know which specific technologies will be required – or how much time or money they will consume – but you should define high-level estimates based on experience and benchmarks. (See our 2017 ERP Report for examples of such benchmarks).
3. How ready is your organization for change?
Although it may sound like a premature and rhetorical question to ask, it is an important one. Organizational change management – arguably the most important part of any digital transformation initiative – should begin during the evaluation and selection stage of your project. The first step is to conduct an organizational readiness assessment to answer this important question.
4. Which business processes provide your competitive advantage?
Not all business processes are created equal, so it is important to manage improvements accordingly. Focus your time and effort on preserving those that are unique to you, and don’t let any software decisions water down these core competencies. Similarly, ensure that you focus more time on these areas during your software evaluation process.
5. How willing are you to change your business processes?
Or, to rephrase: how willing is your entire company to change its business processes? You and the project team may be more than willing, but this doesn’t matter if the rest of the organization resists changing or somehow reverts to old, less efficient processes. Ensure that you have a realistic read on this potential organizational change challenge.
6. How much software customization are you willing to tolerate?
Many executives I speak with, are convinced that they will implement zero customization. However, this is unrealistic at best. Most organizations (91% to be exact) customize their software during implementation simply because they want to preserve their competitive advantage (see point #4 above). But, since too much customization can be a bad thing, ensure that you have an aggressive – yet realistic – stance on how you will address potential software customizations.
7. Are you looking for a single ERP system or a best of breed solution?
A one-size-fits-all ERP software isn’t the best solution for everyone, nor is a best of breed solution. Different companies have different solutions appropriate for their needs. Ensure that your IT strategy defines which direction you’re leaning so that your software evaluation process is focused and doesn’t veer off track.
8. Who will be on the project team?
If you haven’t already, you should define who will fill the various roles on your team. This includes your internal project manager, project core team, subject matter experts, and executive steering committee, as well as your outside consulting resources. Ideally, this team will remain intact from the evaluation stage of the project through implementation.
9. What will be your communications strategy?
It may be obvious to you and those close to you why this initiative is so important to the success of your organization and how it will impact people’s jobs. However, this isn’t true for most of your employees. Your communication plan should be defined early on to ensure that you are communicating early and often. As I always tell our clients: it’s never too early to begin defining and implementing your organizational change strategy.
10. What will be your project governance strategy?
Digital transformations are chocked full of hairy decisions that won’t always garner unanimous agreement. However, someone needs to ultimately make these tough decisions, so make sure you have clearly defined your project governance strategy early in your project.
You may not have all the answers to these questions, but you should take the time to define them as part of your overall IT strategy. Contact us to learn how we can help.