No software implementation is easy. Even the most routine upgrades to back-office systems create more headaches and challenges than most CIOs and executives realize – at least not until they’ve been through a few of them on their own.
Digital transformations are even more difficult and challenging. According to Panorama’s 2016 ERP Report and other leading research, as much as 80% of digital transformation, enterprise software and other technology initiatives fail – mainly because of challenges related to organizational change and business processes.
Here are ten steps to ensure a successful digital transformation:
- Determine if you are really ready for a complete digital transformation instead of a relatively simple ERP implementation. ERP implementations typically involve incremental improvements to business processes and job roles, whereas digital transformations enable more “quantum leap” improvements to your business model and operations. For example, a digital transformation may redefine how you sell and deliver your product to customers – such as the wholesale distributor that is migrating to an eCommerce platform. An ERP implementation might be more focused on automating your back office accounting and inventory management functions. Be sure you understand which it is you are really pursuing and plan accordingly.
- Define your digital transformation strategy. Technology can have a profound impact on your business, but it is meaningless if it doesn’t align with your longer-term corporate and enterprise technology strategy. Be sure to develop a long-term roadmap based on your corporate goals and objectives. Learn more by watching our on-demand webinar on how to develop an effective enterprise IT strategy.
- Evaluate your software and technology options. Once your strategic roadmap is defined, evaluate potential technological options that best fit that roadmap. Each company will have different needs based on overarching strategy, ranging from Tier I ERP systems such as SAP software, SaaS solutions such as NetSuite, eCommerce systems, mobile apps and other technologies. Whatever you do, don’t myopically assume that a single ERP system will address your digital transformation needs without fully vetting your options.
- Determine how technology will disrupt your business and facilitate business process reengineering. Since this initiative will be a material disruption to your current business model rather than an incremental improvement to back-office functions, you will need to spend plenty of time on business process reengineering Make sure you invest plenty of time defining and documenting your “to-be” business processes to reflect this new and improved operational model.
- Determine how you will manage organizational and cultural change to enable the transformation. Digital transformation is about much more than technology – it is about massive cultural change. People will not only have new roles and responsibilities, but in many cases, their jobs, way of thinking and responsibilities will be completely overhauled. Make sure you invest heavily in an effective workforce transition and organizational change management plan to ensure a successful implementation.
- Develop an effective implementation plan. Realize that an effective digital strategy requires an effective tactical plan. Make sure to develop an effective (and realistic) implementation plan that reflects the tasks, resources, elapsed time and man-hours to fully realize your transformation. Helpful hint: the technical aspect of the transformation will most likely be the easiest, so don’t underestimate the people and process aspects of your initiative.
- Manage the technology, people and process implementation. The best strategies and intentions don’t mean much without effective execution. Make sure you have experienced project team members and independent software consultants supporting your initiative to ensure success.
- Integrate silos and technologies. Along the way, remember to make sure you are taking the opportunity to integrate business functions and technologies so you’re not stuck with a disparate array of departments and systems that still don’t talk to each other. Most digital transformations require multiple technologies to address the various aspects of an enterprise-wide transformation, so this is an especially important reminder.
- Continuously improve via a digital transformation center of excellence. Once you’ve implemented your strategy over the course of months or years, it’s important to remember that you’ll never be “done” with your transformation. Technologies – and your competitors – are constantly changing and improving, so it is important that your internal systems keep up with your evolving needs so you don’t fall behind.
- Enlist the help of independent software consultants. The above steps are not effective without the help of outside independent software consultants. Most consulting firms, including the Big 5 consultancies, are aligned with and/or receive kickbacks from software vendors, which puts their interests in conflict with yours. Also, no one ERP software vendor is likely to satisfy all of your technology needs, so you need someone with no biases and a big-picture view of the market.
Contact us today to find out how we can help guide your digital transformation initiative. Also, be sure to register for our webinar on September 6th: Ten Steps to an Effective Digital Transformation.