A recent study by Horváth & Partners showed that digital transformation in all corporate areas is at the top of the agenda for most CxOs, together with employee engagement, cost improvement and structural changes. The good news is that these four priorities are interlinked, as investments in digitalisation can serve as a lever for cost improvement, structural changes as well as employee engagement. The Corona crisis has proven to work as an accelerator for priorities that needed to be addressed anyway.
This brings us to the question;
- How do you ensure tangible value from your investments in digitalisation when external factors and a need for cost improvements challenge you to execute even faster?
Digitalisation is hardly breaking news, and you have probably been working with digitalisation initiatives for quite some time now. However, we still see that many digitalisation initiatives end up in the classical IT project pitfalls, such as endless backlogs, detailed and multiple change requests, workarounds and little buy-in from the organisation.
In our experience from executing small to large-scale digital transformations in both the private and public sectors – the way to success lies with the following steps:
- Prioritise and harmonise business needs
Even if it seems perfectly clear in the beginning, the value you wish to derive from investments tend to get lost in translation from project scope to actual deliverables from the projects. Many organisations still struggle with harmonising different stakeholders’ goals and needs.
An early sign that this is about to happen is when pre-studies result in long, sometimes inconsistent “wish lists” with unclear priorities, which can lead to expectations that projects struggle to meet.
One way to avoid this common pitfall is to have clear documentation of your expectations and priorities and how they fit with your overall strategy. The purpose is to ensure that the project team understand the business needs in depth, and equally, that the organisation understand the overall desired values, strategies and priorities very early on in the process.
When the project team present findings from initial phases, make a point of reiterating why priorities and value potential are important with both the project team and key stakeholders in the business. Establishing buy-in on both a logical and emotional level takes time, so be prepared to spend time on frequently communicating desired outcomes. This is one of those evergreens when it comes to success factors.
- Bridge the gap between technology and business processes
Go slow in order to go fast by putting a lot of thought into how to build and staff the project/programme organisation. Form the project teams with cross-functional expertise from both the IT and technology and the business side of the organisation. The key to success is creating a team that will acquire new perspectives other than those within their own specialised areas of expertise and to build a solid understanding of the overall priorities and possibilities. This also ensures that there are “champions” in all parts of the organisation when it is time for implementation.
- Create a coherent end-to-end process
Create a structured and cohesive process all the way from mapping the needs to implementing the end solutions. Communicate clearly what is expected of whom and when. Involve key stakeholders early on and appoint owners in the business for different parts of the digitalisation journey. Other hygiene factors in project execution involve risk and dependency management as well as a thorough and realistic business case. This will help you motivate and communicate decisions in the organisation while keeping your eyes on the prize.
- Do not allow digital hermits
You often hear real estate agents saying “Location, location, location”. Maybe it’s time to coin a saying in digitalisation on that same theme: “integration, integration, integration!” Artificial intelligence and machine learning are great, but many organisations still have a lot of manual processes and poor overview and quality of data. You need to get a detailed overview of your data situation (architecture, information flows, etc.) Your employees and customers will most likely judge your digital landscape on how well it all works together. And even if you have state-of the-art bits and pieces, as long as you have digital hermits (applications who don’t really talk to others), the desired business value will be difficult to obtain. It will also be an up-hill struggle to raise the necessary motivation among your employees for the new ways of working if the process is not regarded as smooth and seamless.
- Aim for vendor partnerships
When sourcing software, it is key to be open and transparent in the sourcing process. Firstly, it is important to help the vendors understand your business, pains and desired outcome early on to make the sourcing process as efficient as possible. Make sure the project team clearly communicate what the vendors need to offer in order to be successful, both in terms of their product’s features as well as vendor-related features. This will allow vendors that aren’t a good fit to make an informed decision to opt out of the process early on, ensuring neither time nor energy is wasted on either side. Secondly, aim for a partnership – not just focusing on how to find your preferred vendor, but also ensuring that you will be a preferred customer.
Encourage the project team to involve your vendors in the project planning phase and to be open to finding a solution that fits both parties. Be open to input and listen to the vendors’ expertise. Another way to strengthen the relationship with the vendor is to establish shared risks and upsides in both the project implementation and in the realisation of the desired business value.
- Make a plan for how to realise business value
Last but not least; you need to make a plan for how to realise the desired benefits from your digitalisation investments. It’s important to decide how, who and when to execute and communicate changes in the organisation.
In our experience, change leadership is key to achieving tangible business value. Some of the most important cornerstones in efficient change leadership is to be systematic and to ensure a solid understanding in the organisation. Both regarding the new ways of working and the reasons behind them. Start working with these topics early in the transformation by inviting both early adopters, naysayers and informal leaders to be a part of the journey.
The essence of the above recommendations is go slow to go fast. The new normal is constantly requiring us to adapt … fast. But if we want to realise the desired results of our initiatives, structure and engagement are essential. So the question that remains is: Are you going slow?