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Final Countdown - Strategies To Reach The Third Stage of Digital Transformation, The - Eric Kimberling
Final Countdown - Strategies To Reach The Third Stage of Digital Transformation, The - Eric Kimberling
CONTROL
By Eric Kimberling
Foreword
Chapter 1 | Don’t Be a Case Study
Chapter 2 | Digital Strategy in the Era of All Things
Digital
Chapter 3 | Constructing a Winning Digital
Transformation Strategy
Chapter 4 | Bridging the Gap
Chapter 5 | Process Improvements
Chapter 6 | Defining Performance Metrics
Chapter 7 | How do Processes Change People and
Technology
Chapter 8 | Next Steps: Perform an Operational
Assessment
Part II: People
Chapter 10 | Why Organizational Change Management
Matters
Chapter 11 | Understanding Resistance to Change
Chapter 12 | The Power of Company Culture
Chapter 13 | Organizational Alignment
Chapter 14 | Organizational Structure
Chapter 15 | Change Impact on People
Chapter 16 | How to Convey the Vision
Chapter 17 | Next Steps: Developing an Organizational
Change Plan
PART III | Technology
Chapter 18 | The Launching Pad
Chapter 19 | Visualizing The Future
Chapter 20 | The Guard Rails
Chapter 21 | Top Existing and Emerging Technologies in
the Digital Era
Chapter 22 | Which Software is Right for You?
Chapter 23 | Implementation Planning
Chapter 24 | Countdown to Launch
Chapter 25 | Next Steps: Get Started on Software
Implementation
Foreword
Are we aligned?
PART I | Processes
Chapter 4 | Bridging the Gap
Future State
Part II | People
Chapter 10 | Why Organizational
Change Management Matters
2. Operational Disruption
The second dimension of failure, which is even more
costly and more turbulent than the first, is the concept of
operational disruption. This is what happened to Nike. Their
operations became compromised, and in turn, they had to
deal with chaotic inventory displacement. Organizational
change management strategies mitigate risks to ensure that
our people, our operations, and our organization are all
operating in synergy. Without that synergy, it will be nearly
impossible to reach orbit in our future state, target
operating model. If our change management plan is strong,
then the transition to new processes and technology will be
so seamless that it’s more of a non-event rather than a
massive, chaotic affair.
Competency
There will always be a fringe group of employees that
will serve up intentional resistance. There are two
speculative groups that will have the hardest time
undergoing a change: The employees who are the most
educated and competent, and the employees who are not
confident in their abilities to master something new. It’s the
outliers within an employee base that will often have the
hardest time pivoting from their day-to-day, and they will be
the most obvious in their pushback to change.
Some of the biggest struggles in change
management come with the companies that employ PhD’s
or highly effective and competent individuals. These
individuals have so much faith in the way things work in the
current state that they often shy away from adapting to
something new. Unintentional resistance will be scattered
amongst the rest of the employee base, but this group will
typically be vocal.
Misunderstanding
Misalignment
Organizational change
management is far too often an
afterthought. That mindset breeds delays
in implementation, budget overruns, and
operational disruption – also known as ERP
failure.
This mindset is particularly
prominent with executives and leaders
that simply lack experience in
organizational change management or
complex business transformations. It’s not
every day that we are overhauling an
entire ERP system and replacing it with a
technology that will inevitably push new
processes and new organizational
structures. The truth is unless we have
successfully completed multiple business,
operational, or digital transformations, it’s
hard to grasp what drives success for each
unique organization. The landscape is so
different from company to company that
the overarching strategy must be
exclusive to each respective organization.
That exclusivity in company
persona is what requires a crystal-clear
sense of alignment across an organization.
We see it often, and it all starts at the top.
Executive misalignment is ever more
prevalent in today’s business
environment. While a company could
potentially survive for years with some
degree of misalignment at the top, the risk
increases with each strategic initiative,
such as a digital transformation. These
initiatives put strain on every nerve of an
organization, making executive alignment
a critical part of any successful digital
strategy.
Now, what does misalignment really
mean when it comes to digital strategy?
Misalignment can occur on several levels:
between divisions, between regions,
between departments, and across the
hierarchical layers of an organization. If
the leadership of an organization is
marching in unison, then it is possible to
fix any of these forms of misalignment. It’s
specifically when leadership is out of sync
when a company will live in a state of
misalignment. When the captains of the
ship are intrigued by even slightly
different treasures, the direction to the
crew will be clouded with a fog of
uncertainty.
Sure, this executive misalignment
can live in day-to-day operations, but it’s
when processes, technology, and people
are put under stress that the weakness
will show. This weakness has the power to
derail business and digital
transformations, throw off strategic
investments, and even cause a hostile
work environment. The tricky part is that
executive misalignment can come in many
shapes and sizes and it’s often hard to
identify when looking at it internally. It’s
the subtle differences between leaders
that drive colossal impact in a company’s
direction.
In order to compile a strong digital
strategy, we must address misalignment
at an executive level, at the root. As we
explore the nuances and silos creeping in
the background of our board meetings,
make sure to look at the concept through
an aerial lens. This misalignment can be
hiding between different executives,
between executives and the overarching
business strategy, or even in the
unconscious and conscious biases each
person sitting at the table holds true.
Regardless of what shape the
misalignment takes, it’s important we
keep the following red flags top of mind at
every digital transformation meeting.
Communication Planning
Dialing in on an effective
communication plan requires us to dig
below the surface. Of course, we must
communicate the progress of a project,
maybe even timelines and goals.
However, we need to do this in a very
intentional way. When discussing a
communication plan, we must think of
why we will communicate, how we will
communicate, and what we will
communicate.
Step 1
Map out a timeline of the project and pair
it with a timeline of communications. Plan
out the general timeframe in which you
will send out announcements, key
milestones, status updates, seminars and
training schedules, and any other
information that is helpful to the
transformation project.
Step 2
Write, create, and schedule the
distribution of videos, emails, seminars,
training, and even flyers to be posted
around the building so they are ready to
go come distribution time. Ensure flyers
can be updated as needed as you
progress through the project.
Step 3
Craft the core of the message around
what’s in it for me, but try to customize
every message, especially at the forefront
of the project, for each department. The
reason? Each department will likely have
varying motivations. Sales will be money
motivated whereas accounting might be
efficiency motivated. Express how the
change will make a department’s efforts
more efficient. Talk about how roles and
responsibilities will become less occupied
with busy work, allowing for more time to
create and produce results?
Step 4
Create an open communication forum and
round tables where people can ask
questions and play a role in the
development of the change. Consider a
team forum where the employees can
make the choice of if they want to
communicate as themselves or remain
anonymous. That ambiguity and
empowerment will help drive
conversation.
Step 5
Continue to communicate long after going
live to check in with the team members
and make sure everyone has acclimated
to the new way of working.
Training
Training is the easy part of an
organizational change management plan.
The biggest piece is making sure that the
training is not held at the very last minute
before going live with the new processes
and technologies. This is a pitfall that
many organizations trip on, and it
sabotages all efforts to mitigate
resistance. The goal is to pair training and
communications like a fine wine and an
aged cheese. The two should be planned
and operating in harmony so that
communications T-up successful training.
If communications are planned and
distributed appropriately, then the natural
resistance will happen long before any
training begins. This should always be the
goal. The last thing anyone wants is to
have heavy realizations about the shift in
their job role in the middle of a training.
Rather, those freakouts need to happen
and be addressed months before through
strategic and targeted communications.
We want people to walk into
training knowing how their role will
change so the training can focus on how
to execute upon their new role and
facilitate new processes. In addition to
training earlier, consider training in
segments. An influencer on a smaller
team is typically an individual contributor
who has a great reputation among their
peers. They seem to get along well with
others and have the trust of their fellow
coworkers. Have managers identify these
people and make them their team’s
designated subject matter experts. Bring
these subject matter experts into the
training earlier than others to ensure that
they can understand the new processes
and technologies well enough to act as a
resource for their immediate team and
peers. By incorporating influencers in our
training strategy, we will further help
mitigate resistance.
● Video Conferences
● Live Meetings
● Phone Conferences
● Video
● Email
● Events
● Flyers
System Architecture
Business Processes
It’s essential to have clear visibility – from end-to-end
– of business processes. There must be consistency in
mapping those processes to identify opportunities or
understand flaws that will hinder the impact that emerging
tech can have on operations.
If we don’t have a clear understanding of business
processes within our organization, then implementing an
emerging technology can be completely irrelevant. The
technology won’t be able to function correctly, and it will
create technical debt from a lack of business value for our
investment.
Business Culture
Communication
IT Capabilities
Operational Readiness
Organizational Readiness
Operational Risk
Cultural Alignment
One of the greatest, yet overlooked, aspects of
software during an evaluation is the cultural alignment
between the software’s functionalities and our company’s
culture. If one of the pillars to a company’s success comes
by quickly adapting to meet customer demand, then the
selected software should also mirror that cultural nuance.
An example of this would be a company that thrives on
implementing rigid changes that hold across its global
locations, or even having the autonomy for localized
departments to set their own processes. These are
examples of cultural specifications that can either be
amplified or dimmed depending on the type of technology
selected.
This specification can be challenging to measure and
outline, but it is an area of opportunity that all executives
are, or should be, mindful of. The existing landscape of an
organization may have a manipulated system in place to
work as needed, but there could be benefits in acquiring a
system that accepts the level of adaptability that fits and
expands on the company’s culture.
Market Image
Oracle NetSuite
SAP S/4HANA
Oracle ERP Cloud
Microsoft Dynamics 365
Infor M3 and CloudSuite
Salesforce
Workday
Sage X3
Service Now
IFS
Odoo
Microsoft Dynamics Business Central
Oracle NetSuite
Deacom
Epicor
QuickBooks
Salesforce / Financial Force
SAP Business One
Priority Software
Sage ERP
IFS
QAD
IQMS
SAP S/4HANA
Oracle ERP Cloud
Microsoft Dynamics 365
Infor CloudSuite
Epicor
Plex Systems
Deacom
Acumatica
DelTek
Netsuite
Oracle PeopleSoft
WorkDay
Oracle ERP Cloud
Sage Intacct
Infor Lawson
SAP S/4HANA
Microsoft Dynamics 365
Unit4
Emerging Technologies
Hyper-Focused Best of Breed Supply Chain Management
Solutions
● Marketing efforts
● Market reviews
● User feedback
● Substance behind the brand’s messaging
Case Study: Great & Co. INSERT GRAPHIC - Case Study Icon
● Infor
● MS Dynamics
● IFS
Get references.
Great & Co should ask to speak to references of other
companies who use the same version they are planning to
deploy. Preferably, these references should be within the
same industry and size, and they should have some of the
same challenges Great & Co. is working to solve.
Probe beyond the surface.
Do due diligence.
Great & Co. should check the forums and real user
feedback about how good their technical support and
service teams are – SLAs, response times on service tickets,
etc. There are many resources out there. They should
consider looking at places like Gartner and Software Advice.
Negotiate.
Processes
People
It’s only human nature that executives pull in
different, and sometimes conflicting, directions. The head of
sales will often have different goals and priorities than the
head of procurement. A cohesive implementation plan will
include a consensus using proven methodology and
techniques to get executives to interact and commit to the
same vision and the same priorities.
It’s not an exaggeration to say that solid executive
alignment is the exception rather than the norm. If
misalignment is suspected, it’s in our best interest to bring
in an objective third-party consultant to help dial down on
the root of the problem and drive everyone back to the
same playing field. Whether it’s done internally or
externally, we must facilitate strategic orientation,
engagement, and discussion where team members are
forced to come out of their silos and collaboratively inch
towards alignment. Knowing how to build successful
outcomes and facilitate contentious faceoffs are some of the
traits of an experienced strategy-based independent ERP
consultant. That’s what we should look for if we consider
bringing in a third-party expert to help point all sails in the
right direction.
Note that just because an executive approves the
project does not necessarily mean all parties are aligned.
The future state vision starts at the top, and that vision
serves as the foundation of any digital transformation.
Executives should be crystal clear on the business goals and
objectives of the company, and ultimately the purpose of
implementing new software, and communicate that clearly
with the project team. The executive and project team must
consider what the end game looks like to ensure we are all
acting and leading with the same intention.
Misalignment is far too often the culprit of trailing
performance when it comes to new software
implementation. With that said, executives should focus on
the following three things to keep from falling prey to
misalignment amongst themselves, and ultimately amongst
their greater team.
● Executives should educate themselves to fully
understand what the implementation means and what
to expect. The more realistic the view executives can
grasp, the better off they will be. This often comes with
the feedback and insights garnered through the various
organizational and procedural assessments.
Technology
We are now arriving in uncharted territory concerning
what we’ve discussed in this book. The technology arm of
our implementation includes everything that it takes to
integrate and implement the software we have selected. We
must now consider data migration, system architecture, and
integration between systems as we enter this phase of the
project. Let’s dive a bit deeper.
Technical Readiness
The capacity to which our IT team is ready will define
our company’s next step toward adopting new software. If
we are going from a cloud solution to a more customizable
system, then the transition will require more due diligence.
Think about it – when leveraging a standard cloud system,
we are heavily dependent on the software vendor to push
out updates and provide strong cybersecurity measures. All
we would be doing, in theory, is fitting our processes into a
structured platform. We will have different needs as we
upgrade our software systems, and we must consider
whether our team is ready and capable of handling the new
normal. It comes down to three things: talent, system
architecture, and data flow.
When evaluating our technical readiness, we must
determine if our existing IT department has the right skills
to accommodate the technicalities we are migrating to.
Maybe they do, maybe they don’t. If they don’t, we need to
pinpoint the training and certifications the team will need in
order to be ready for the shift. Another option is to hire new
talent altogether. In either scenario, these things take time
and resources and we must act on them now.
In addition to the readiness of our IT talent, our digital
infrastructure will also play a big role in implementing a new
system. Are our internal IT department and system
architecture ready for a change? Better yet, are they
equipped to handle the new needs of the chosen software?
Agile
Waterfall
Change Management
This methodology comes to the forefront for
organizations that value the human factor of a
transformation. When considering methods like ADKAR,
KODAR, or any other change management methodology, we
easily notice the misalignment between the traditional
methods, such as Agile. Change management
methodologies focus on the people element of
implementation rather than processes or technology.
Instead of leveraging speed and efficiency, this method
prioritizes impacts of the organization, proper organizational
design, and tactics to deploy a change management
strategy that ensures people come along for the ride. This
approach is often an add-on to other methodologies on this
list, and it's incorporated to create a cohesive
implementation plan that covers all three pillars of digital
strategy.
Customer Experience
Software Methodologies
Phase #1 | Building
Phase #2 | Testing
2. 3x3 Rule
Phase #3 | Go Live
● Organizational readiness
● Communications
● Organizational design
● Training
● Executive and stakeholder alignment
● Benefits realization
● Workforce transition
● Cultural transformation
Corporate Strategy
^
Digital Strategy
^
Digital Transformation Execution
You orbit.
Citations
1. “Top 10 Digital Transformation Failures of All Time, Selected by an
ERP Expert Witness”, Third Stage Consulting Group, April 8, 2021, Top
10 Digital Transformation Failures of All Time, Selected by an ERP
Expert Witness - Third Stage Consulting (thirdstage-consulting.com)
2. “Estimated Number of Companies Worldwide from 2000 to 2021”,
Statista, August 15, 2022, • Global companies 2021 | Statista
3. “What is SAP?”, SAP.com website, accessed August 2022,
https://www.sap.com/about/company/what-is-sap.html
4. “How Long Does It Take for an Architect to Draw Up Plans?” Denny +
Gardner Remodeling Building Design Website, November 20, 2021,
https://www.dennyandgardner.com/blog/how-long-architect-plans
5. “6 Steps to Building a Center of Excellence”, Bizagi, June 10 2020, 6
Steps to Building a Center of Excellence (bizagi.com)
6. “Mars Exploration Rovers Overview.” NASA. NASA. Accessed August
30, 2022. https://mars.nasa.gov/mer/mission/overview/.
[1]
“Top 10 Digital Transformation Failures of All Time, Selected by an ERP Expert
Witness”, Third Stage Consulting Group, April 8, 2021, Top 10 Digital
Transformation Failures of All Time, Selected by an ERP Expert Witness - Third
Stage Consulting (thirdstage-consulting.com)
[2] “Estimated Number of Companies Worldwide from 2000 to 2021”, Statista,
August 15, 2022, • Global companies 2021 | Statista
[3] “What is SAP?”, SAP.com website, accessed August 2022,
https://www.sap.com/about/company/what-is-sap.html
[4]
“How Long Does It Take for an Architect to Draw Up Plans?” Denny + Gardner
Remodeling Building Design Website, November 20, 2021,
https://www.dennyandgardner.com/blog/how-long-architect-plans
[5] “6 Steps to Building a Center of Excellence”, Bizagi, June 10 2020, 6 Steps to
https://mars.nasa.gov/mer/mission/overview/.