TRANSFORMATION GROUND

CONTROL

3 Pillars to Your Digital Strategy in an Era

of Change

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

It was 2003 when Nike lost

hundreds of millions of dollars. They had
recently integrated a demand planning
software that fell flat, reflecting the
precise opposite of their market’s
demand. Their warehouse was stocked full
of Air Garnett sneakers collecting dust and
eating up warehouse space around the
country. Meanwhile, the product that
everyone wanted, Air Jordan sneakers,
was missing from inventory, with
production lead times spanning several
months. Nike found itself in a predicament
that kept them from accommodating its
customers and, in turn, losing millions of
dollars in sales. Nike stores across the
world scrambled to meet their customer’s
needs as people poured in to buy the
shoes glossed with Michael Jordan’s name.
Air Jordan sneakers were in high
demand, but the ‘glitch’ in Nike’s demand
planning software anticipated the demand
of thousands more Air Garnett sneakers
than Air Jordans. This miscalculation left a
gap in supply, costing Nike millions of
dollars in wasted inventory, lost sales, and
operational inefficiency. The mishap didn’t
stop there. That so-called ‘glitch’ in their
new demand planning software may have
been closely tied to their factory
productions overseas, but it had a residual
impact that caused a domino effect
spanning all aspects of the business. Such
a large, miscalculated projection left its
imprint on the balance sheet. The mark
was visible enough that the loss had to be
reported on their quarterly earnings call in
order to stay compliant with the U.S.
Securities and Exchange Commission and
maintain trust with shareholders. It was
after that conference call that Nike’s stock
price dropped by a whopping 20%.
As a leader at the company around
that time, it may have been hard to
understand how a once shiny, new
enterprise resource planning software,
otherwise known as ERP software, could
lead to such a catastrophic result. A 400-
million-dollar investment, a 20% dip in
stock price, and a 100 million dollar loss
between missed sales and over
expenditures on inventory was something
no executive at Nike would have ever
imagined. So, what went wrong?
Nike had done their due diligence in
implementation planning, but there were
deep holes in its overarching digital
strategy. Whether you’re a titan
corporation like Nike or a small business
working to automate your processes by
implementing new software, you are
gambling if you embark on a digital
transformation without an air-tight,
comprehensive digital strategy. This book
is intended to help business owners,
executives, and project leaders get a
holistic and full-scope grasp on the
foundational elements that hold up a
successful digital transformation. This
book is for business and project leaders
who do not want to make the same
mistake that Nike made.
 Many can count only on one hand
how many software implementation
projects they have been a part of, if any.
The reality is that implementing software
at one company looks completely different
than it does at another, even if you are
implementing the same software. The
nature of the company, the company
culture, the team’s skill level, the
processes, and the data management
practices are all different from one
company to the next. Unless you are
implementing new software on a regular
basis, it’s challenging to execute at a high
level on every component of a digital
transformation.
As you read through this book, you
will grasp the framework needed to
formulate and optimize your digital
strategy. In the famous words of David
Bowie, this is ground control, and you are
Major Tom. These best practices have
been tested across hundreds of industries
with countless different software solutions.
Each one has proven to help launch
organizations to orbit - where all processes
are streamlined, and operational synergies
are born. Only when a company reaches
orbit will it be able to truly foster and
develop its competitive advantage. These
keys will guide your rocket to the
stratosphere and enable your organization
to grow in new and exciting ways.
It’s important to note that the
solutions in this book are not one-size-fits-
all. These are not cookie-cutter solutions
that apply evenly to every company. I
encourage you to take each concept
discussed in this book and apply it with
the unique attributes of your company in
mind. At the end of each section, there will
be clearly defined steps that you can take
to implement the contents and ideas of
this book into your very own digital
strategy. So long as you read this text
through the lens of your own needs, it will
guide you on your journey to the
stratosphere.
The information in this book will
provide you with an unbiased and
unfiltered approach to building an
untouchable digital strategy. It will help
you define what a digital transformation
will mean for your team, your processes,
and your software solutions given your
distinct company culture, operations, and
system infrastructure. Your approach and
determination of the elements in this book
will be distinctive to your organization, so
lean into your own unique perspective as
it relates to these topics.
With over twenty-five years of
experience in helping organizations large
and small find, implement, and optimize
new enterprise software, I have garnered
the ideologies, tactics, and best practices
that my consulting group runs on. I am
going to give you the secrets to
formulating the blueprint that will lead to
your company’s ongoing success in
utilizing and leveraging new-age
technology. You will walk away with an
unfiltered and unbiased perspective of
what a digital strategy entails and be able
to make decisions more confidently to
keep your business competitive as
technology continuously evolves. You’ll
also understand and be wary of the
common causes that lead to ERP failure so
you don’t make expensive mistakes like
Nike once did.
Here, you will harvest the best
practices and key concepts that drive
successful digital strategy and will walk
away with a tangible action plan that can
be implemented directly into your own
business. Are you ready to strategically
and intentionally launch your company
into the dawn of a new digital era?

Let’s dive in.

Chapter 1 | Don’t Be a Case
Study
On average, a company spends between three and
four percent of annual revenue on a digital transformation
project to optimize operations and automate processes.
Nike’s digital transformation in 2003 had the same intent
and roughly the same budget. At the time, Nike was north of
a 10-billion-dollar company[1], so spending 400 million on
new software and everything that goes with it was fairly
intuitive. What was not intuitive was their approach to the
implementation.
If we were to ask Nike’s leadership, this was nothing
but a ‘glitch’ in their system. It was simply viewed as a
speed bump in the grand scheme of their billion-dollar
operation. The question here is, was it really a speed bump,
or could it have been avoided in its entirety?
The issues Nike ran into were based on its inability to
accurately forecast demand. They couldn't get the right
product mix to their character and were unable to fully
grasp the demand to produce the right amount of product in
each category. When they realized the fumble, long
production lead times kept them from adjusting in time to
mitigate the problem. Yes, it was the system that projected
inaccurately. The system they implemented may have been
too slow, maybe it didn’t integrate well, or potentially had
some bugs that needed to be worked through. However, at
its core, there were three holes in Nike’s approach during
this digital transformation:

1. Nike’s planners were inadequately trained on how

to use the system before it went live.
 2. Nike did not have a process in place for someone to
check and confirm demand projections before the
factory began production.
3. Nike missed the target in their testing efforts. A bug
of this size should have been caught during tests
prior to going live.
Although there were some issues with the system,
pinpointing the root cause of an ERP failure is done by
peeling back layers of the subject’s digital strategy. The
success or failure of a digital strategy can be rooted in three
pillars of a digital transformation: People, processes, and
technology. Nike made mistakes on one component within
each of these three pillars, and it was reflected as a $100
million loss. Opportunities were missed through a lack of
comprehensive training (People), failure to implement
revised workflows for newly launched software to keep
demand planning systems in check (Processes), and neglect
to run comprehensive, end-to-end testing to ensure glitches
were caught and addressed before going live with the new
software (Technology).

Three characteristics define failure when it comes to

implementing enterprise software:

1. It costs more time or more money than

originally expected.
2. It delivers considerably less business value
than anticipated.
3. It sees operational or material disruption that
affects your business.

Any of these three factors can be chalked up as an

ERP failure. Unfortunately, Nike fell prey to all three, and
they are still working to optimize their operations as a
result. It’s not just Nike. Believe it or not, over half of all
organizations fail based on these standards. It’s more
common than one would think, and most of the time, it’s
due to a subpar or complete lack of a digital strategy to
guide the transformation through common pitfalls every
company faces when implementing enterprise software.
If there is no digital strategy, there is no north star.
There are various common pitfalls that nearly all
organizations run into through transformation projects. It’s
these pitfalls that can make or break a company’s success.
Of course, we have instances such as Nike’s 2003 crash and
burn, but other pitfalls dance their way into a project and
leave project leaders scrambling to make up for lost time,
lost capital, and operational disruptions.
The most common culprit is a lack of alignment
across all executives in which direction the rocket is going.
Oftentimes, this lack of alignment can be rooted in either
miscommunication or more generically, in internal biases.
For example, a company’s objective may be to grow its
bottom line. We can get to that result in a few different
ways. If the CFO of the organization has their eye on cutting
costs while the COO has the intention of driving revenue,
there is a lack of alignment. Yes, each of these strategies
serves as a pathway to drive the bottom line, but they are
all unique pathways, nonetheless. The way we drive
revenue within a company looks different than the way we
cut costs. This misalignment in the how is the very thing
that many companies face. So, before implementing any
changes, we must ensure our team is aligned and facing the
north star as one, cohesive unit as we formulate our digital
strategy. That way, when it comes time for transformation,
our team can ensure all sails are set in the same direction.
The lack of project governance is another huge pitfall
that organizations run into. There are various, complex, and
expensive decisions one must make when considering
enterprise technology. While we are in the thick of a
transformation project, we need guardrails to guide the
challenges along the way. Formulating a comprehensive
digital strategy can act as just that – the guard rails. When it
comes time to determine which software to select or which
modules we’ll need to integrate, we can refer to our digital
strategy and recall what we initially set out to do. If it
supports our digital strategy and inches the company closer
to its overarching strategic objectives, then do it. If it
doesn’t, then don’t.
Without a digital strategy, we neither garner
executive alignment, nor will we have a means of
governance. Without a digital strategy, we will get to the
other side of the project and realize that we are no better off
than we were before. Whether we classify as a Fortune 500
entity or a small business, the level at which we are
prepared to launch a digital transformation is the level at
which we will succeed. More time should be spent in
planning and strategizing our roadmap than anywhere else
in a given implementation project. The lack of an all-
encompassing digital strategy guiding a software
implementation puts us at risk and may only drive a wider
gap between where we are today and where we want to go.
Each segment of this book will discuss various
considerations that can be used to integrate our
overarching corporate strategy into our digital strategy. That
digital strategy will be our roadmap to the execution of our
digital transformation. It will help drive the understanding of
how we can optimize current operations utilizing modern
technology. In today’s digitized world, our corporate
strategy and our digital strategy are nearly the same, and
we cannot define one without the other. Without a
synergistic vision and execution plan, it will be difficult to
garner buy-in from our team, make sound business
decisions, or stay relevant in the ever-changing digital world
we live in today.
Chapter 2 | Digital Strategy in
the Era of All Things Digital
Today’s world is driven by technology. Business
operations are now defined by the level of technology that
supplements the operating model. It’s our enterprise
software that helps track metrics, identify opportunities,
maintain organization, and ultimately inch us ahead of our
competition. Without a sound digital strategy in place,
competitors will overbear the market and our business will
dwindle. Without a clear vision of what we want our
company to be when it grows up and how we want the
organization to operate, it will be difficult to pinpoint
technologies that can be leveraged to help us get there. A
clear digital strategy should be the horse before the chariot
that powers our digital transformation. It will enable us to
maintain a competitive advantage as the world becomes
more and more technologically advanced. It has never been
more important to align our corporate and digital strategies
to reach our target operating model.
Now, what exactly is a digital strategy? Let’s simplify
the concept and take the word ‘digital’ out of the picture. As
an executive team, we likely have a strategy in place.
Maybe our overarching strategy is to lead our industry in
customer experience, or it could be that our company wants
to build a reputation of having the quickest turnaround time
in deliveries. This overarching business strategy is what will
help our organization stand out against the others, and it
will encompass the business aspects that our company is
best positioned to execute. A digital strategy is a plan that
an executive team must align on to determine how the
company will achieve its established business strategy. How
will we create a premier customer experience? How will we
be able to deliver packages the fastest out of all our
competitors? How will we increase the bottom line?
In the dark ages, or just fifty years ago, the how was
entirely dependent on the people and the processes in
place. Fast forward to the twenty-first century and
technology has developed as the third piece to the puzzle
that helps get organizations to their strategic goals. Our
technology, processes, and people within our organization
are married, with one unable to fully function without the
other. It’s the tripod to success, and the detailed
compilation of each of those elements is what formulates a
digital strategy.
Let’s run through an example. Say an executive team
has aligned on a strategic plan designed to drive revenue by
cross selling more products. They must take that specific
strategic goal and work backward to formulate a digital
strategy. To formulate the digital strategy, they must have a
stronghold on how adding cross-selling metrics will affect
their sales team, how the selling and closing processes will
be altered to get there, and ultimately, which CRM, or
customer relationship management tool, will help them
optimize their cross-selling and upselling efforts. Their
digital strategy will be the detailed roadmap that outlines
how they will manage the people, processes, and
technology to reach their company’s strategic goals.

Insert corporate, digital, and transformation strategy

hierarchy graphic from section III

Translating our corporate strategy to an aligned

digital strategy is called strategy articulation, and it requires
us to dig below the surface to understand the complexities
of the organizational, operational, and technological sides of
our business. It also guides in planning tactics and practices
that will optimize those elements. We do this through the
development of a digital strategy. One of the most
important things to understand is that an effective digital
strategy is tailored for and aligned with an organization’s
specific needs.
Every organization has a unique culture, distinct
operations, different competencies, and varying
technological needs. Each organization’s digital strategy
needs to reflect the differentiators within its business. So,
how do we do that for our business? The key is to envision
how technology will enable us to reach our greater goals
and objectives as an organization. If we have a clear
strategic plan on a corporate level, it becomes easier to
identify and outline the digital strategy that will pave the
path for us to get there. We can prime ourselves to start
constructing a cohesive digital strategy by pondering these
six considerations:

Define who we are and where we are going.

Alignment with corporate strategy and culture is the

most important aspect of an effective digital strategy.
Understanding who we are as an entity today and who we
want to be when our company matures is the single most
important step before formulating any digital strategy and
ultimately, implementing new software. If our digital
strategy is aligned with our corporate strategy, then we
have a high chance of success when we begin our digital
transformation execution.
Our first step is to define our core competencies and
overarching corporate strategy for the future. What is it we
are trying to accomplish as an organization? What is our
vision for how our operations will look in the future? Do we
have the best customer experience out of all our
competitors? Do we make deliveries to consumers in record
time? The answers to these and other questions will set us
on the path toward formulating the best digital strategy
possible.

Identify and improve processes and workstreams.

Once we understand where we are and where we are
going as an organization, we will be able to pinpoint and
prioritize the processes that need love. The processes that
have bottlenecks or are too manual for efficiency’s sake, the
ones that stand as the biggest barrier to where we are today
and where we want to be in the future – It’s these processes
that need to adapt and change. In chapter 5, we’ll walk
through the Hierarchy of Processes to help identify which
processes to improve and how to improve upon them.

Establish project governance.

It is important to define what success means to us. This

entails defining our key operational metrics, and those
metrics should always be tied to the greater processes and
results that move the needle toward our corporate strategy.
These metrics will also help establish and maintain project
governance and risk mitigation strategies. Above all else,
they will help us justify and optimize the benefits of our
potential digital strategies.

Build an organizational change management strategy

to support our digital strategy.

Our digital strategy won’t mean much without an

effective organizational change management strategy to
support it. After all, technology is just technology without a
team of people running the show and inputting effective
data. Strategizing the human component of a
transformation is one of the most important inputs and
determinants of success.
We’ll get into how to clearly define an organizational
change plan in Part II: People. To summarize, however, an
organizational change plan should address organizational
readiness, change impact, organizational design, and other
critical activities that most project teams and system
integrators don’t think about.

Objectively consider the pros and cons of our

potential software options.

An organization has several potential strategic

alternatives, each with its distinct tradeoffs. No one
alternative will be perfect, so we should never adopt the
mentality that upgraded technology or improved processes
will fix everything. There is no silver bullet that will solve all
a problem in one pull, so it is important to objectively
evaluate each avenue. The metrics and business case we
define will help to evaluate the strengths and weaknesses of
each route we could take.
For example, once we begin inching toward the
software selection phase of a digital transformation, we may
be weighing our options between SAP S/4HANA vs. Oracle
Cloud ERP vs. Microsoft Dynamics 365 as potential solutions.
Each will have different implementation costs, different
impacts on our organization, and different tradeoffs. Each
one will speak to the needs we have differently. The only
way to make the right selection is to first prioritize our
needs, our wants, and our expectations to evaluate each
option objectively. We will discuss this further in chapter 22.
Outline an implementation plan that is aligned with
our digital strategy.

After we do our due diligence in planning,

researching, surveying, and optimizing what is our current
state, we can pull everything together to create an
implementation plan that will guide our digital
transformation execution. Our implementation plan will
define how each technical element of our digital strategy
will unfold. We will marry our organizational change plan,
our business process improvement plans, and our system
implementation plan together as one. These facets of digital
transformation make up the formula for a cohesive digital
strategy, and only then are we ready to move forward with a
software implementation.

As we cover the three pillars of digital strategy in the

pages ahead, we will walk through each of the above
considerations in more detail. By the time we’ve gone
through all these concepts together, you’ll walk away with a
step-by-step action plan that will enable your organization
to reach new heights, so long as it’s used in synergy with
your corporate strategy.
The best digital strategy for our organization looks
unlike the best ones for most other companies. There are no
generic answers, so it’s important to objectively define what
works for us. Only when we take an aerial view of each path
will we understand which road is worth pursuing. Rather
than spending money on implementing software, invest in a
cohesive digital transformation strategy that will evolve and
grow the organization. After all, that’s what everyone is
after. Isn’t it?
Chapter 3 | Constructing a
Winning Digital Transformation
Strategy
Digital transformation is a lot less like rolling out
technology and a lot more like building a house. The
execution of every component of a digital transformation –
the process, the strategy, the implementation – entails
some level of key work streams that will set a project up for
success or failure. Similarly, the execution of every
component of building a home – the process, the materials,
the construction – entails some level of key work streams
that will set the project up for success or failure. There are
countless lessons we can learn from building a house and
we can apply those lessons to our digital transformation
journey.
One of the biggest pitfalls organizations trip on is the
motivation to jump straight into deploying technology. They
have identified their needs, defined what it is they want out
of technology and dialed in on the technology solution or
solutions that are the best fit for their organization. Since
they have done those few things, they believe they are
ready to jump straight into designing, building, and
deploying the new software. This mindset is exactly what
leads organizations into operational disruption, or worse,
litigation against a software vendor.
To avoid those worst-case scenarios, we need a
digital transformation blueprint. Rather than just defining
our high-level business requirements, picking software, and
then jumping straight into building stuff, we need to take
the time upfront to cover phase zero of digital
transformation – implementation readiness. We need to
become crystal clear about what our future state business
processes are going to be and what we want the future
state organization to look like. Once we know where we
want to be, we have to prepare our people and processes
for that change. Without covering the first two pillars, the
third pillar (technology) will fall flat.

Many times, software vendors and system integrators

will suggest that we don't worry about the blueprint. “We'll
help you,” they say. Sure, they may help map out a
blueprint to some degree, but it will primarily be focused on
the technology pillar of the organization. They will help
define how the software should be built, but they often lack
the intricate details of managing people and optimizing
processes to help our organization reach our targeted future
state. A software vendor or integrator will be focused on
software rather than the bigger picture of how a business is
going to operate post-go-live.
Before we dive into the three pillars of digital
strategy, it’s important to be fully cognizant of the fact that
technology is just one piece of the puzzle. All three pillars of
digital transformation need to be incorporated into the
greater digital strategy in order to reach our target
operating model, or what we’ll refer to as orbit. A sound and
cohesive digital strategy will incorporate a blueprint for
processes, people, and technology. Furthermore, it will be
guided by the processes and people aspect of our
organization rather than the technical aspect.
The likelihood of a siloed, technology-focused
blueprint being aligned with an organization’s business
needs is very low. In fact, there is a higher chance of
misalignment and falling into the never-ending cycle of
playing catch up to reach the goals and objectives set forth
at the beginning of the project when we try to fit our people
and processes into technology rather than finding a
technology that fits our people and processes. This is why
we, as business and project leaders, need to take ownership
of crafting and designing our blueprint.
Think about it. An architect or home builder would
never come to the table with a blueprint that defines the
future home as a two-story, 2,000-square-foot, single-family
home. A new build construction would never start with
plumbing. An electrician would never show up, unbriefed, to
begin installing electrical outlets and running Cat5 cables as
the first step to building a home from the ground up. There
is not a single trade that would begin its work without first
addressing the blueprint. Moreover, there is an order of
operations that must be followed to ensure the structural
integrity of the new build. The blueprint will act as a guide,
a map. It will show how the house is to be built, in what
order, and how all the different pieces and trades will fit
together to reach a final product.
When we hire a software vendor or system integrator
to come in and start deploying technology straight out the
gate, we’re essentially hiring a plumber as the first step to
building a house. It's just something we don't do. If we were
to do that, chances are pretty high that the home will have
an unstable foundation and will not be built to code.
One of the most important things we can do as
project leaders and executive sponsors is to take note of the
timeless best practices that have worked for others. We
must do it right. There is too much money, time, and energy
poured into a digital transformation to skip certain elements
of the greater project. Regardless of if we believe we can
save time and money, or we simply are not aware of the
right thing to do, we cannot risk doing this wrong.
The blueprint for what our business is going to look
like in the future needs to be set in place before we select
and implement software. The processes in place need to be
adjusted, fine-tuned, and optimized before we select and
implement software. The plan for how our people will adapt
and acclimate to the new processes coming down the
pipeline needs to be in place before we select and
implement software. Only then will a software
implementation truly support our corporate strategy and
vision, and only then will it fall within the realm of what
we’re trying to accomplish – reaching orbit.
While the blueprint illustrates what the overall house
or the digital transformation is going to look like, we also
need a solid foundation. We don't start framing, flooring,
plumbing, or electrical until we've built the foundation. In
fact, building a foundation is one of the first things we do
when we build a house. The same is true for digital
transformation. We need a solid foundation before we start
building technology and other aspects of the transformation
on top of it.
To build the foundation of a digital transformation
project, we need a means of project governance. There
needs to be overarching project governance for how we
manage vendors, system integrators, consultants, and the
project team. We need to have a clear set of processes,
roles, and responsibilities, and an overall vision for how the
project will be managed. We need to understand the metrics
and key performance indicators, or KPIs, associated with our
transformation project. We must have a grasp on what
defines success.

Aside from project governance, we must also consider

our greater technical architecture. We might be deploying a
single ERP system, or we might be deploying human capital
management, customer relationship management, or supply
chain management technology. Whichever path we choose,
chances are that we are doing so in the context of other
systems that are already being utilized. We must integrate
all systems to function as one, and until we know the
current and future, desired state of our architecture, the
entire process will be clouded. Our data transfer could be at
risk, our cybersecurity could be compromised, and our
migration efforts will be tarnished if we don’t have a clear
view of our web of systems and integration points. These
elements will ensure that a digital transformation project
will be built on a strong foundation.
Another similarity to draw is that of general
contractors. When building a house there is a general
contractor that heads up the whole project. That general
contractor hires the electricians, the drywall team, the
people that do the flooring, plumbing, etc. We also need a
‘general contractor’ as we begin a digital transformation. We
need one party that can manage all the moving parts and
stakeholders that are involved in the transformation.
Now, the problem with our industry is that software
vendors and system integrators often sell themselves as
that general contractor, or they might argue that we don't
need the equivalent of a general contractor because they're
the ones providing the technology. That’s like a plumber
coming in and raising their hand to take on the role of the
general contractor.

Most people understand that the plumber is not the

general contractor. Those are two very different crafts. The
plumber is one of many subcontractors that need to be
managed throughout the process of building a home. Even if
we're deploying a single type of technology, the software
vendor that provides the nuts and bolts of how the software
is going to work is just one subcontractor. We also have to
address change management. We have to address
architecture, data migration, and integration between old
and new systems. We have to address the overall program
management that ties all the moving parts together.
When building a house, there are very clearly defined
roles. The plumber does the plumbing, the electrician does
the electrical, and the flooring guy or gal does the flooring.
It makes sense because we can see it, we can touch it, we
can feel it, and we can tie each aspect back to the blueprint
or the architectural work that was done early on.
The problem with digital transformation is that it can
be hard to see the different roles that the ‘subcontractors’
take and the different ‘trades’ that need to work on the
project to get the project to the finish line. Of course, when
we talk about subcontractors in this analogy, it doesn't
necessarily mean that all the resources we’re discussing in
regard to a digital transformation necessarily need to be
subcontractors. Some could be internal resources. Some
could be outside consulting firms. Some of these resources
can come from the software vendor or the system
integrator. Some multiple parties could provide resources to
help with a digital transformation.
However, the key here is to understand what all those
pieces are and that it will take more than one party and
perspective to drive our digital transformation into orbit. A
plumber can’t provide an estimate or a blueprint for a new
build, nor can a software vendor accurately tell how much
time or money it will require to undergo a digital
transformation. They're just one subcontractor. They can
provide an estimate on the cost and timeline of the software
implementation, but not of the rest of the project. When
considering a digital transformation, setting the budget, and
defining roles, we must make sure to have all those different
‘subcontractor’ roles defined as it relates to the digital
transformation.
Now, in most parts of the world, when a home or
building is under construction, there are extensive
government regulations on what qualifies as a finished
product and what will pass the regulatory compliance
measures in place. The problem with digital transformations,
on the other hand, is that there are minimal regulations or
oversight on how these projects are managed, if any.
If a new build house has a shaky foundation or certain
criteria aren't met, then it's not going to pass code and will
not achieve approval to move forward until it is fixed. If it’s
not fixed, the house won't reach completion. A digital
transformation, however, does not embody that compliance
or verification. The marketplace has no measure of success
and stability other than what the company puts forth itself.
We can't rely on the government to tell us how our
digital transformation should work. The questions then
become how do we validate that we're implementing
software the way it should be implemented? What are we
doing to mitigate the risk of cost overruns? We must
institute similar types of metrics and measurements for our
digital transformation on our own.
Our organization must provide the oversight and the
verification compliance of how the digital transformation is
going. This is a role that independent, third-party
consultants can provide. From quality assurance to
implementation program management, these consultancies
can help provide compliance metrics and milestones that
will validate whether a project is going to succeed.
When we get creative in our mindset and welcome
different perspectives on the black and white practices of
software implementation, we will be able to see things in full
color. These are general guidelines of how to think about a
digital transformation differently, and in a way that most of
us can relate to. As you read through the proceeding
sections and chapters, consider treating your digital
transformation more like building a house.

Before starting a digital transformation, we must be

able to answer some questions.

When starting on a digital transformation, people are

excited. There is momentum, people are ready to dive in,
and it’s exhilarating to think about operating at a higher
level and increasing revenue. Before we jump in, however,
consider answering these ten questions.
Why are we changing?

Oftentimes, organizations think they have a great

answer to this question. “We have to upgrade our
technology in order to grow” or, “our software vendor is
decommissioning an old legacy system and is basically
forcing us to move to a new system.” Sure, these are good
reasons, but it needs to be more comprehensive than ‘we
have to’ or ‘we have no choice.’

We must define what our future state is and what we

want our organization to be before we dive into the
transformation. Dig deeper into this question and find a
greater purpose in the project before diving in. We’ll discuss
how to define our future state in the next chapter.

What business value do we expect?

One way to unpack the why is to unpack the business

value. These should be elements that influence the
performance of our organization. Now is the time to define
the business benefits we expect, the impact on supply chain
and inventory levels, and what it looks like to improve
customer satisfaction.
Once we answer this question, we should quantify the
business value in the form of a business case. This is not
only to get alignment and approvals on the project, but to
set the project governance structure. If we do not set the
business value expectations, it will be harder to reach those
values.

What is our future state target operating model?

 When defining our future target operating model, we
should consider what we want to be when we grow up and
the target operating model once we get there. It’s important
to define this future state before we deploy technology.
This target operating model should drive the
technology rather than assuming the technology will
magically give us the answer of how we want the
technology to operate once we go forward. We must define
the business blueprint for change and identify how
technology will bring that blueprint to life.

What is our future organizational structure?

Just as we need to define our future state target

operating model, we also need to define our organizational
design. Are we going to restructure? How will technology
affect people’s jobs? Will certain department tasks become
automated, and if so, what will that team do to replace that
production time?
As we begin deploying technology, we will get more
granular in understanding how peoples’ roles will be
impacted. However, it’s a mistake to avoid the change
impact until we are implementing technology. This is an
area of focus we need to consider at the beginning to the
extent that we can and we can fine-tune the details as we
become more ingrained in the implementation.

What type of tech best fits our needs?

Once we have answered the prior questions, we need

to consider the type of technology that will help us realize
our desired future state. Selecting technology that best fits
the future state is critical. We don’t want to implement
technology that automates things the way we have always
done things, we want to focus on automating how we plan
to do things in the future state. This is critical if we want to
reach our target operating model.

What are the project roles?

Beyond implementation consultants and third party

vendors, we need to understand whom within our internal
team will be responsible for what. Consider who will be the
overall program manager who manages system integrators
and consultants, who will be a part of the organizational
change management, or OCM, team, who will be
responsible for signing off on business processes, and what
the roles and responsibilities of the executive steering
committee look like. To manage a project effectively,
everyone needs to know their roles and responsibilities in
order to move the project forward. Our internal team is
going to act as the general contractor.

What is our digital strategy and plan?

We need to define our strategy and bring in

consultants and vendors to execute upon that strategy. As
an organization, we can evaluate the best blueprint and
plan that will adhere to our greater company culture,
business processes, and system architecture to reach our
future state target operating model.

How do we augment the system integrator?

It’s important to recognize that our system integrator

will not be our silver bullet to success. We not only need our
internal team to oversee and lead the project, we also need
organizational change management practices and business
process improvement that needs to be managed by
something other than a system integrator. The system
integrator will help with one element of the digital
transformation, but they will not be much help in supporting
the overall digital and corporate strategy.

Are we aligned?

This is a very important question to ask. Is our team

aligned internally when it comes to expectations of the
project. Are we aligned around decision-making and project
governance, are we aligned on the corporate strategy, and
are we aligned on the expectations of the project and the
overarching path to reaching our goals? The headwinds of
misalignment act as one of the biggest risks of a digital
transformation, and it has cost many organizations
thousands, if not millions of dollars throughout their digital
transformation project.

How will we hold ourselves accountable?

No one person can be the single hand of

accountability. Yes, the project rolls up to an executive
sponsor, but there are countless other elements that need
to be accounted for as well. Other stakeholders need to take
ownership in delivering the business values that are
expected and that there is minimal operational disruption.

Throughout this book, we are going to walk through the

detailed framework needed to outline a winning digital
strategy. We will break down the complexities of each pillar
that holds up the foundation of the digital strategies of the
most efficient and effective organizations. With this
information, it will become clear how organizations
successfully implement new software, adopt new processes,
and keep their teams engaged as they transition from their
current state to their future state. It will become clear how
organizations reach operational orbit. By following these
tactics, you’ll be able to position your company in a way
that adapts as new technologies emerge, as markets shift,
and as new products and services rise to the brim of the
well.

PART I | Processes
Chapter 4 | Bridging the Gap

In the fast-paced world that we live in today, it’s easy

for a company to jump into implementing a new strategy
without fully understanding its starting point. Diving straight
into the tactics and operations of one’s future state without
a comprehensive grasp of the existing state will introduce
many challenges that would otherwise be avoidable. At a
high level, we should think of the future state of our
company as the vision. What do we want to be when we
grow up? What do we want to be known for? How do we
want to operate? What are the differentiators of our
processes?
For example, our target future state could be crafted
around optimizing our customer service efforts. To get there,
we must dial in on our current state of customer service
quality and processes and identify areas that can be
automated so our customer service representatives make
better use of their time. Maybe we aim to have better
processes in place pertaining to escalations. If we were to
integrate an AI chatbot with conversational capabilities to
field the most common customer service inquiries, we would
only need customer service representatives for escalations.
This would drive efficiencies and eventually save money on
payroll. However, we can’t just plug in an artificial
intelligence tool. We need a thorough understanding of the
current customer service practices to craft and implement
the most efficient and effective plans to optimize our
current state. An ideal future strategy in this scenario would
alleviate the existing customer service shortfalls. Without
understanding the current shortfalls, we won’t be able to
identify the optimal solutions that would bridge the gap
between today and tomorrow’s customer service practices.
 Too often, the intricacies of a company’s current state
are overlooked due to the idea that the current state will
become obsolete once the new processes and procedures
are in place. This false ideation is a pitfall that crushes
businesses large and small. We cannot reach point B until
we know where point A is, otherwise, we are simply floating
through space trying to land a rocket with a faulty GPS. It’s
pivotal that we first understand the ins and outs of our
current process. Without a full scope view of our current
state, it becomes an overwhelming and daunting task to
figure out how to reach our future state. Rather than
building processes from scratch as if we were launching a
new business, we need to build on what we already have
and leverage the clues within our current state processes.
Understanding our company’s current state gives us
focus and direction. It grounds the greater team in being
able to map out how to reach the destination, or the future
state. Even if our current state seems broken or inefficient,
it’s still a starting point. It is nearly impossible to define the
future state of an organization unless we can define where
we are starting. Asking questions about our priorities,
differentiators and unique approach to business will help
guide our attention. Asking questions about current
processes, current bottlenecks, and the current
organizational design will help us create a roadmap that will
optimize the priorities, differentiators, and unique
characteristics that define our future state. The two
perspectives go hand in hand. Performing an organizational
assessment to determine these elements before fully
flushing out a future state will help us step in the right
direction as we formulate a cohesive digital strategy.
A key element to building a sound digital strategy is
the concept of proper change management – how to
manage change for the people in our organization. It
doesn’t matter if it’s a process change, a change in
leadership, a change in technology, or all three. No matter
the magnitude or the transformation type, a sound change
management strategy will get a team to adopt the new
normal with ease. In today’s digital era, a transformation in
business will almost always be linear with a digital
transformation. In the world we live in today, there is no
change in business operations without there also being a
change in technology. There is no change in business
operations without there being a change in the dynamics of
a team. There is no change in team dynamics without
proper change management.
All efforts to optimize our businesses come down to
our processes, and it’s the people and technology behind
those processes that bring our operations to life. The key is
to preserve the processes, technology, and cultural norms
that are serving our company in its current state, and work
to mold the rest into an improved and ideal self.

Future State

Technology is moving, and it’s moving fast. The future

of our industries will come quicker than we realize, and it’s
up to us to keep up. Changes to processes are essentially
forced upon businesses if businesses aren’t on the offense,
continuously evolving with the times. It all comes down to
whether the leadership of a company is proactive or
reactive. What once were prominent businesses have fallen
to the wayside as technology has evolved. Think of
Blockbuster, and the evolution of the at-home movie
industry. Think of taxis and driving services, and the
evolution of the rideshare industry. Businesses, better yet
industries, are evolving just as quickly as the technology
leveraged within them, and it’s those who have a vision who
will prosper in this fast-paced world we live in today. Change
is the only constant.
 We have an opportunity to look at the changing
landscapes within our industries and forecast what the
future will look like. The key is understanding and redefining
our processes to ensure they are robust enough to adapt
when changes arise. Change is all around us, and we can
either let change control us or be able to appropriately
respond to and, thus, control change. By being on top of our
processes and continually reevaluating them, we enable
ourselves to adapt to changes more quickly. It’s important
to be disciplined in maintaining a cultural mindset around
continuous improvement. Defining our future state with this
notion in mind is imperative to staying competitive and
keeping our business alive as things evolve.
Leaders often make the mistake of thinking
technology will solve the problems of their current state.
Maybe there are broken processes or discreet bottlenecks
slowing down a production line – those processes and
bottlenecks will linger even if they are plugged into
computer software. The real solution depends on fully
understanding the current state and solving existing
problems through prioritizing processes, reworking and
redesigning said processes, ensuring buy-in from the people
responsible for those processes, and lastly, finding software
that will optimize the new processes to the greatest extent
possible. That is the only way to a sound future state, and
our digital strategy should frame that roadmap.
Going straight to our company’s future state under
the misguided belief that technology will mend weakness
will lead us astray. By incorporating our existing, faulty
processes into new technology, we will not only continue to
run into the same operational challenges that we had in our
current state, but we will also lose our competitive edge.
Technology is a tool to help execute on the processes we put
in place, but it should never define our processes. We
determine our processes. We determine our future state. If
we let technology and software determine our workflows
and process patterns, then we are essentially squeezing our
business into the same cookie-cutter that thousands of
other businesses use as well.
On the other end of the sky is the stratosphere, and
that is where we will orbit. We are on earth, preparing to
launch from our current state to our future state. Our
company’s future state is ultimately defined as the greater
vision for the business, and it is where our operations will
fall into orbit. It’s where we want to be in five, ten, twenty
years. It’s our long-term goal in terms of the ever-changing
state of technology and how that applies to our present-day
business. Without a definitive future state, our company will
often find itself lacking direction. The lack, thereof, will lead
to challenges when making pivotal decisions, misalignment
amongst executives, and, ultimately, the hindrance to the
progression and growth of our company's mission.
For our company to define and reach its future state,
it will undergo a series of process mapping exercises of both
the current state of business and what it will look like in the
future. Let’s dive into the details on how to clearly define
and reach our company’s future state and dial in on a
premier, competitive, and distinct target operating model
for our business.

Target Operating Model

To design and compose an original target operating

model that leads to attaining a future state unique to our
company, we must take a step back and look at the various
elements that play into a cohesive operating model. The
biggest inputs are our organizational goals and objectives,
processes, and the systems and system architectures in
place. These areas will help guide us in crafting our future
state and we will break down and optimize each segment to
build our target operating model.
Through this assessment, we will build a target
operating model upon qualitative and quantitative
assessments. Qualitative assessments consist of the
analytical findings from the company’s current state.
Through a proper assessment of our current state, we will
recognize what is working and what is not working.
Once all the qualitative information is gathered, we
leverage a business process mining software to validate and
augment the data to figure out exactly where the
breakdown within a given process is happening. Process
mining uses data science to identify and optimize
workflows. This type of software combines log files from
information systems with analytics regarding those
processes to make improvements on our current state.
Typically, information systems, such as ERP or CRM
software, provide an audit trail of processes with their
respective log data.
Business process mining utilizes this data to create a
process model that displays the end-to-end flow for any
given system in detail. It provides insight into whether
deviations from the normal operation may be occurring at
each point during the workflow. Specialized algorithms can
also identify root causes when something goes wrong by
automatically tracking changes over time and highlighting
areas where problems exist so they're easier to detect than
ever before.2 With this tool, we better understand how
workflows are unfolding, how many variations there are in
across our many processes, and where the processes slow
down or overcompensate. It shines a light on the processes
that need improvement.
This makes it easy. When we leverage business
process mining tools, we practically have the next steps laid
out in front of us. All we must do is figure out how to
optimize the processes that need TLC. By understanding the
subpar workflows in our current operating model, we can
more seamlessly decide how many employees should be
allocated towards certain tasks at one time, how they
should do it, and when. Furthermore, it will give us a
starting point in painting our vision for the future. We can
better determine which processes and operational areas to
focus on as we map out our target operating model.

After business process mining is complete, we must

ask ourselves a few more questions. Which processes that
need TLC are processes that are moving us toward or away
from our corporate strategy? Which processes impact the
most people in our organization? Which processes are
working with our current system architecture, and which
ones are the most manual? Performing a high-level
evaluation of our processes will show us point A, and from
there, we need to step into our visionary mindset to
determine point B. Point A is our current state, and point B is
our future state.

Beyond business process mining and general process

evaluations, we also must explore other elements of the
organization as well. Defining a future state and building
both a corporate and digital strategy around how to reach
that point takes a joint effort. It cannot be done by a board;
it cannot be done by executives leading from their corner
office. It can only be done through the collaboration of all
stakeholders. First, we must get ahead of the game by
pulling cross-departmental team members together into one
room and picking their brains. The people selected should
be people who are familiar with the end-to-end processes in
consideration of change and evolution toward the future
state. After all, a business process mining tool can only tell
us so much. It’s the people behind the processes and
engrained in the workflows that can add color.
Think of this collaboration as a mastermind. Hold a
session or a workshop led by an experienced facilitator to
dissect what is working and what is not, and discuss which
components of the current processes can be improved upon.
The facilitator will guide the group toward laying out the
steps needed to reach the company’s future state based on
everyone’s input.
Let’s talk about a big piece to this puzzle – the
facilitator. The individual or individuals chosen to lead these
discussions can help document the current state and
pinpoint the areas of opportunity holding the organization
from operating at a high level. They can ask the right
questions that will drill down on necessary process
improvements and steer the cross-functional team in the
right direction. It’s important that the facilitator selected to
guide this group is experienced in such a workshop because
some employees may find it difficult to think beyond current
processes. The right facilitator will inspire ideas and create a
safe space for those at the table to voice their concerns with
confidence and explore all possible changes that would
improve their current operations. Many organizations lean
on third-party, independent consultants to facilitate this
conversation and optimize the brainstorming process from
an objective stance.
 As the team goes through this initial brainstorming
session and the identification of strengths and weaknesses,
it will become easier to paint the picture of what the new
normal, or the future state, should entail. The one thing to
keep in mind is that even as teams venture into drafting
new processes and editing old ones, there may be some
colleagues who push back. This can occur at the origination
of a new process, or it can occur down the line once the new
process is implemented. Regardless of when, it’s important
that we understand that resistance is a natural part of any
transformation. It is often tied to a lack of engagement
throughout the planning and implementation phase of a
new process. Although we can’t fully eliminate resistance as
we progress to our future state, we can certainly mitigate it
by involving the ideas and concerns of those executing the
processes. Not only will this allow for a more cohesive and
effective future state vision, but it will decrease the
resistance that employees and colleagues experience
through the transformation process. We’ll discuss resistance
more in Part II, but it’s a concept that should be considered
in every instance of strategy formulation and digital
transformations in general.
Sure, we can always look to our neighbors and see
what processes are working for them, but this comes with
inherent risk. By adopting a blanketed copy of another
organization’s best practices, we are becoming clones of
another organization rather than doing something unique
and competitive. Identifying the proper approach for our
business depends fully on how well we, as leaders, know our
current organization and drive alignment regarding our
corporate strategy.
It all starts with the corporate strategy – the
overarching mission and roadmap of our business. Our
digital strategy aligns with our corporate strategy, and it all
cascades into the future state of our business. Too often,
businesses separate digital strategy and corporate strategy,
and they do not speak of the two in the same breath. The
misalignment and the lack of connection between the two is
what clouds an organization’s future state and inhibits
progression toward the greater goals and objectives we set
for ourselves. Both our corporate and digital strategy should
feed into our future state to give us the best chance at
attaining it.
With our own unique mission and values guiding us, it
becomes apparent why copying other processes will never
be in our best interest. Of course, the black and white
practices, such as those in accounting and finance that all
businesses need to perform are a bit different. In those
scenarios, a copy-cat, plug-and-play approach won’t be the
end of the world. However, it becomes debilitating when
forward-facing practices, like customer service and
production, take a plug-and-play approach. As a business,
we must build and grow on an understanding of who we are
and what makes us special. Specifically, we should work
with the people on our team that have the expertise around
the processes that separate us from our competitors.
Identifying the areas of our business in which we are
unique begins with a strategic discussion with leaders and
executives about where we land in the marketplace, what
our competitors are doing, and the nature of customer
feedback. Customer feedback is a particularly critical
aspect, which includes understanding why customers are
seeking us out and why they continue to return. This is what
we must build on. If, rather, we start with a blanketed copy
of someone else’s best practices, we could be leaving out
the things that make our business different and unique,
neglecting the very pieces of our business that hold our
competitive advantage and attract customers. If we think
the cookie-cutter approach is right for us, we must approach
it with a strategic eye. For example, consider copying just
certain processes, selecting which ones are most critical to
our business, and altering them to meet our unique needs.
Another way to lose a competitive edge is to rely fully
on technology to help us reach our goals. Rather than
relying on a new, shiny ERP software to help us improve our
operating model, we first must clearly define our goals and
objectives. In this conversation, our goals and objectives are
our future state. The clearer the vision for what we want the
transformation to be and what we want to be when we grow
up, the better outcome we’ll have. We’re going to find a
better solution for our organization if we’ve defined what we
want the future state to look like and have worked backward
to map out how to get there. Enter, process improvements.
Once we have fully grasped the peaks and valleys of
our current state, we can begin to make changes and
improvements. Some changes can be made independently
of technology and others can be highlighted as a prioritized
need that new technology will need to accommodate.
Whichever avenue we choose, it all starts with taking our
learnings from our current state evaluations and improving
upon them to move the needle closer to our future state.
Chapter 5 | Process Improvements

Once a business walks the reflective and visionary

journey, they are then able to act. The question is, what
should be acted upon? There are countless processes in
every business. In order to move forward, we need to
pinpoint the processes, or pool of processes, that overlap
with our corporate strategy. What facets of the business will
move the needle toward the future state?
Well, once we have fully understood our current state
and have painted the picture of our future state, we build
the bridge out of the processes that carry the most weight.
As we consider the different process improvements we
should invest our time, energy, and resources into, we must
always keep the overarching goals and objectives as our
compass.
The process of proper business process management
is not only a mouth full, but also a clearly defined path that
helps prioritize the elements of the business that will move
us forward. Every business wants to drive growth and help
the bottom line, but the true corporate strategy will always
be rooted in how to do that. Maybe Joe’s T-Shirts is planning
to drive growth based on the notion that they make the
softest, most comfortable t-shirts in all the land. If we were
Joe, the processes we would likely want to examine further
are in manufacturing and product sourcing. Maybe Annie’s
TV & Company wants to focus on high quality customer
service to encourage customer retention month over month.
If we’re Annie, the processes we will likely want to examine
revolve around all that is front facing. From user interface
design to customer escalations, each process should be
evaluated from an end-to-end level to find areas of
opportunity. Regardless of the industry, business process
management should be an ongoing and integral part of
management's role, and it becomes even more important
when formulating a digital strategy.
The reality is, if we are involved and engaged in the
day to day of a business, then we should have a decent
grasp of our organization's current state. We know the high-
level, end-to-end processes for the big-ticket items, and we
have been managing processes from a top-down approach
each day we come into the office. These day-to-day
activities make up the core of our company’s operations,
and all we need to do is look a bit deeper.
To manage a business process is to continually
optimize a business process. Many times, a current state
analysis will point to a need for the automation of manual
processes. Often, manual processes are the culprits of
common operational bottle necks. By breaking down
processes and prioritizing those that are most impactful in
driving results, we pour our energy into the big-ticket items
that keep us aligned with our overarching corporate
strategy.
This current state assessment becomes our starting
point, and it enables us to build a future state as efficiently
as possible through the tweaks and adjustments of our
processes. Once we clearly identify the full scope of our
current state, we then pave the paths that will lead us to our
company’s future state operations. This is business process
management at its finest, and it’s the first step to fully
understanding our needs when it comes to finding the
software solution that will best help us toward our target
operating model.
Depending on the situation, business process
management becomes more prevalent at different points
along the formation of a digital strategy. However,
regardless of the timeline, it will always play a vital role in
the success of software implementation and business
transformation. The understanding of our current business
processes will help us identify the opportunities for
improvement that can be resolved by anything from simple
workflow adjustments to robust system automations.

The Roadmap to Business Process Management

Evaluate the Current State Through Process Mapping
The unfortunate reality is that many organizations
don’t necessarily have the budget, time, or resources to
spend redefining business processes. They tend to skip this
evaluation phase altogether. However, it is important to
review what is working today and where there is room for
improvement. As we get started, we should revisit our
general corporate strategy. Identify the processes in place
that drive the business toward that overarching strategy
and prioritize them as we begin our management and
optimization efforts.
First, walk through the processes that are meant to
move the needle toward our corporate strategy. Look at
them from an end-to-end perspective and map out the
blueprint that outlines the state of the current processes.
This is called process mapping.
Process mapping can vary depending on the
organization, but at the core, it’s a web that outlines our
current state processes from beginning to end and the
people or positions involved in that workflow. A process map
will help identify opportunities for improvement and ways to
change how we’re doing business. This could include
anything from shifting the way we’re communicating, to
restructuring teams, or to finding opportunities to improve
our automation and technology.
 A process map might stop us in the middle of a digital
transformation initiative and make us reassess the direction
we’re moving in. It might make us rethink how we’re
prioritizing processes and help more effectively define the
best-fit software through our software selection process.
Some organizations may need to get more in-depth in
determining what their steps are, while others may find that
it’s enough to have just a high-level framework in order to
have people on the same page.
Either way, having a workflow illustrated from where
it begins to where it ends is helpful when evaluating where
improvements can and should be made. This will allow us to
keep what works and change what needs evolution with
more accuracy and higher-level awareness. From here, we
can move to designing business processes as we see them
in the future state.

Design Business Processes

Once we’ve mapped out all the prioritized processes

from end-to-end and understand their workflows, it’s time to
classify them and put them in the Hierarchy of Business
Processes. Evaluate each process and categorize them into
the two following buckets:
● Core Competencies: These are the things that
make us who we are as an organization. It’s why
we win against the competition, what we do well
and what we want to continue to do well. It’s our
organization’s ‘secret sauce,’ and it usually has to
do with aspects of our business that are either
 customer-facing, employee experience-based, or
product-based. It’s the things that we tailor and
customize to make our organization unique.
Without them, we’d lose our edge, and our brand
would fall flat.
● Commodity Processes: These are things like
accounts payable or purchase order processing.
It’s what all organizations must do, and there are
similar processes in place from company to
company. These are the processes that don’t need
customization because they’re meant to be
generic, and they’re efficient being so.
Once the business processes are defined, it’s time to
drill down even further on existing processes to find the pain
points. A pain point can be masked in various ways, and our
job is to be cognizant of the different personas those pain
points can take. The key is to look for tension and
hindrance. Consider the following questions:

● Where is there tension in communication or

collaboration?
● Where does the wheel slow down?
● Are there certain tasks within a given process that
need to be completed quicker or more efficiently?
● Are there certain data elements that could help
someone do their job a bit better than they are
currently doing it?

Uncovering the answers to these questions is often

done through process mining. The quantitative data from
process mining helps us better understand what we can do
to improve without losing the unique differentiators that set
us apart from our competitors. With that, it’s also helpful to
understand what other companies are doing that works and
does not work.

Define Your Strategy

Sometimes, we must incorporate Once the pain

points are recognized and understood, we can go one of two
ways. here are two paths we can take.

Path 1. Evaluate what we could do today to improve

existing processes.

Comb through existing processes. What is working

well, and what do we need to fix? Before making any other
high-level shifts or changes across the organization, it’s
critical to fix the fixable prior to implementing any new
technology. It’s possible that all that needs to be done is an
increase in communication, so a weekly status meeting
could be beneficial. It may be that there are redundancies
that could be shaved down to allow for increased
turnaround times. Either way, begin by optimizing
operations, and consider technology once operations are
optimized. Depending on which pillar the problem process
resides, our response could vary. If it’s a problem with
people, then it’s often something that can rarely be resolved
with technology. If it’s a problem with the process itself or
the existing technology, that may be a different story.
Take the example of a team that isn’t collaborating.
How do we get them to collaborate? Some say implement
new technology to enable more seamless communication
and workflows. Sure, that’s an option, but the reality is that
the technology will not be able to alleviate the cultural
challenges that sit at the root of the issue. Before shopping
for software that could help, we must start with the culture
and behavior of the team, department, and even the
organization.
 Maybe we focus on creating process owners or
process centers of excellence. By doing so, we would enable
the team to work together in figuring out how end-to-end
processes work. Maybe we adjust compensation and the
way we measure and reward the team to enable less
competition and more collaboration. These elements will
move the needle more when the issue stems from a people
perspective. Once these preliminary adjustments are made,
then we can consider technology tools down the line to help
fuel the fire and build momentum in collaborations.
If the problem process is primarily operational, there
are a few levers to pull to ensure processes are optimized
and clean. Many times, technology can, indeed, serve as a
means of optimization in a given operational process.
However, until the groundwork is laid out to determine the
most seamless end-to-end process, technology won’t be as
effective as it can be. The processes that are in question of
automation should be as clean and lean as possible before
pursuing a technology. This means all extra, unnecessary
steps should be removed, any redundancies should be
consolidated, and the process should be crisp enough to
insert into a software. Once our processes are mapped out
with intention, it is a good time to consider the technologies
that will automate processes and further drive efficiencies.
Sometimes, non-technological investments will drive
the greatest results. Whether the problem processes are
related to operations or the people on the team, we must
start by doing our due diligence. If things work from our
initial, non-technological optimizations, then great! If not,
consider the Path 2.

Path 2. Determine the pain points that can be alleviated

with software.

Many times, we can optimize our processes without

implementing software. Other times, the only way to
optimize a process is by incorporating some level of
technology to enable automation. If we get our organization
to its most optimized state, as-is, on an operational and
people level, then we should consider the third pillar:
technology. So long as we shape up and optimize before we
invest in technology, technology may be the very element
keeping us from scaling.
This is where our digital strategies begin to take
shape. The whole point of implementing a new enterprise
software is to help drive efficiencies. Go back to the
prioritized processes that still have underlying pain points or
have room for further improvement, even after the initial
effort made to optimize. Focus on key competitive
differentiators that make our business superior in our
industry and take note of which processes could use a more
standardized approach and which ones need to remain
flexible. Take note of the processes that are of the utmost
importance and rank them based on how important they are
in achieving the corporate goals and objectives. By doing
so, we are making a ‘must-have list’ to take with us as we
begin considering our software options. In Part III, we will
uncover the best practices behind software selection and
integration. However, there are still key factors that need
consideration before getting to that point in our digital
strategy.

It all starts with our processes. Processes are the

moving parts of the machine that keeps our organization
trekking forward. The effectiveness and efficiency to each
part either encourages or hinders operational excellence.
The goal throughout our business process management
initiatives should be to understand the current workflows,
identify areas of improvement within those workflows, and
design a new workflow that best supports our overarching
corporate strategy. Once we feel confident in our business
process management, we have the green light to dial in on
the key performance indicators that will help us measure
success.
Chapter 6 | Defining Performance
Metrics

Seth Godin once said, “Measurement is

fabulous. Unless you're busy measuring
what's easy to measure as opposed to
what's important.” As with anything in life,
the value that comes with measuring
one’s performance is what can and will
drive success. Without notable metrics in
place, it’s easy to get lost. Without notable
metrics for tasks that truly move the
needle, there will be no progress.
Take a car, for instance. We look at
the dashboard, and we see gauges that
tell us everything from how fast we are
driving to how much gas is left in the tank.
We know how hot or cool the temperature
of our car is, and we know when it needs
an oil change. Would it be helpful to track
the weight of the passengers and cargo in
the vehicle? Sure, it could provide some
useful information about how much
energy the car will expend, but it won’t
make a difference in the grand scheme of
our trip from point A to B. A car
manufacturer would never replace the fuel
gauge with a light that detects whether or
not the taillight is intact. Again, these
would be helpful pieces of information to
know so you can avoid getting a ticket for
a taillight outage or using too much
energy, but it’s not critical to the
functionality of the car. If the taillight is
out, the car can still drive, but if the gas
tank is empty, we’re stuck.
The same thought process occurs
when defining the metrics we should
evaluate regularly throughout our digital
transformation. The key question to ask is
are these metrics going to paint a picture
of how close we are to our target
operating model and our future state? If
not, then we need to deprioritize those
metrics and fine tune our measurements
to reflect the overarching goals and
objectives of the company.
Oftentimes the metrics used in the
current state of the business will differ
from those used in the future state. The
difference is rooted in the fact that there
may be data limitations in place in the
current state, and it’s not a concept that
meets the eye quite yet. This could be a
factor that drives the implementation of a
new software. Some metrics are core
operational metrics that will remain
constant as we venture from our current
to future state. Other metrics are out of
reach in the current state and would
provide key insights that would catapult
an organization into its future state.
Knowing this, the key to defining
metrics is defining the ones we need.
Many times, we know the metrics that are
needed to perform at an optimal level, but
it’s done manually. A sound digital
strategy will help automate reporting on
the metrics that we need to operate at a
high level, or at the level of our future
state. As we build out digital strategy, it’s
important to know that as organizations
evolve, key performance indicators will
evolve as well.
 It’s hard to argue with numbers,
and the right numbers will help shine a
light on areas of opportunity. If we, as a
team, are not reaching the competitive
benchmarks within our industry, we know
that pouring into that lagging bucket will
help us improve and grow the business. At
any point in time, we can dial in on the
average inventory carrying cost for a
manufacturing organization. Where do we
stand in comparison? If we are way off,
then we know we are spending too much,
and we can put new strategies in place to
improve upon the existing numbers. As
more and more useful data is uncovered,
we can craft new processes, new
management practices, and even entirely
new operations to hit targets that will help
our organizations evolve into our desired
future state.
Most of the time, businesses look at
cost reductions and technical debt. On the
surface, that’s what seems important, and
it is indeed important. The problem is that
metrics are misconstrued as only numbers
to many. Rather, it should be a holistic
analysis. Qualitative elements like user
adoption or behavior within the
organization are also critical metrics that
should be measured as well. A sound
digital strategy will entail a cocktail of
metrics that measure both quantity and
quality. It’s not just defining our high-level
KPI of increasing revenue by 5% per year.
Dig deeper.
How can each department within
the organization help the company reach
its future state? The overarching, big
picture metric is the north star, and our
digital strategy needs to paint the
granular steps we should take to get
there. Those steps are what we need to
measure. Each metric, each step, and KPI
should roll up into our digital strategy, and
our digital strategy should roll up into our
overarching corporate strategy.
If we begin with our future state, or
the result rooted in our corporate strategy,
we can work backward to determine the
appropriate metrics we should focus on as
an organization. The defined targets will
tell us the data we need to collect. If our
target is to be number one in customer
experience, then our metrics should all
pour into how we can optimize customer
workflows. This includes front-end and
back-end order processing, production
lead times, customer satisfaction, etc.
Once we determine what to measure, we
can then determine how we will collect the
data and ultimately draw upon the right
software and digital solutions that will
automate the processes. At its core, a
digital strategy will define how to reach
our corporate goals and will utilize
technology to make it simple, clean and
automated.
Peeling back another layer to this
discussion, we need to look at exactly how
to drive improvement. Say we measured
it, and we’re off target, whatever it is. How
exactly do we improve it? How do we
improve our customer satisfaction survey
results? How exactly do we drive topline
revenue growth? How do we do a better
job at managing our assets? It doesn’t just
happen because we have the data, we
need to go a level deeper pull the story
and science out from the data. This is
where we analyze all aspects of the data
we are collecting in relation to all three
pillars of our digital strategy: Processes,
people, and technology.
For example, say we come to
realize there are gaps and silos between
teams and departments. Processes don't
flow, there are system limitations in our
existing systems, and people who don’t
work together regularly are not pursuing
each other to bridge the gap. People have
lost their way in the organization due to a
lack of collaboration and communication,
and it’s starting to show in our production
efforts. What do we do?
The first step is to perform an
organizational assessment to quantify
where we are versus where we need to be.
From there, we outline the ways we need
to improve, and ultimately, how we can
improve. Yes, it’s technology and tools,
but it’s also managing and driving cultural
changes, setting expectations, managing
people in an empathetic way, and helping
employees grow personally. This analysis
will birth a change management action
plan for the leading indicator of the silos
keeping our organization from fully
embracing and optimizing any new
processes or technology that we
implement.
A similar analysis might point to the
biggest operational issues present in our
warehouse operations, or maybe our
manufacturing processes. It may shine a
light on bottlenecks in our sales processes
or our customer service initiatives. When
we look, we shall seek. When we ask, we
shall receive. We can’t close our minds
into a corner thinking we already know
what is wrong. Follow the data to get the
whole picture, and move forward from
there.
At the end of the day, organizations
should take time to find the metrics that
are meaningful to them and help them
quantify their goals. Whatever we
measure will grow. Pick measurements
that will move operations and production
toward an optimal future state. The ability
to measure our processes and data will
highlight areas of opportunity and point us
in the right direction.
Chapter 7 | How do Processes
Change People and Technology

Changing a process has a ripple effect. That wave

rolls through even the most distanced elements of the
business, and although a person or technology may be
distant from the actual change, they are bound to feel the
impact. If we think of our organization as a machine, it
becomes clear why even a small optimization in accounting
may be felt all the way in sales and marketing. This ripple
effect moves through the entire organization, and the level
at which it’s felt increases in correlation to the size of the
change.
If Jill in accounting can operate her accounts
receivables in a more efficient way, the company will
indirectly be able to optimize cash flow. If cash flow is
optimized, there will be more opportunities for last-minute
sponsorship at pop-up events to drive sales because there
will be money on hand to pay the sponsorship fee. If funds
were tied up, there would be an opportunity cost associated
with lost sales from missing the event. There is a connection
in every facet of our business. Each process carries weight,
and users are connected and dependent on other team
members. For that reason, managing change in processes is
pivotal to the success of an overall transformation.
Typically, most transformations involve both
operational process improvements and technological
optimizations. There is a lot of value that we can unlock in
those two areas. However, none of that happens until we
close the circuit with proper organizational change
management. Processes affect people in a lot of ways. The
most apparent way is the impact on one's day-to-day
activities; It’s learning how to use a new tool and getting
acclimated to new operations. One of the easiest ways to
think about the conceptual value of organizational change is
to think about the major components of any sort of
transformation and how change management fits. Without
efficient change management in the middle to connect the
dots between operational improvements and technology,
the change simply isn’t going to happen.
Even when change seems small or incremental, it will
always be larger and carry more significant impacts than an
organization may think. If the impact of a change in process
is underestimated from the start, then the efforts to improve
and optimize that process are subject to creating
operational disruption. In addition to the impact process
changes have on the people of an organization, they also
impact technology in a definitive way.
Processes should drive technology; they should drive
the design of our systems and construction of our system
architecture. There comes inherent conflict when we have a
need for a process change that our technology cannot
accommodate. This, often, is where an idea is sparked for a
company to pursue some form of digital transformation. One
of the most concerning setbacks in a business or digital
transformation is the material factor. The material factor
could be, for example, reallocated work that now sits in the
hands of a different department that doesn’t have the skills
or experience to be successful in managing these new
processes. This material threat could funnel into
performance disruptions and ultimately translate into a
decline in employee morale.
In Part III: Technology, we will walk through the
delicacies of technology and the considerations for software
selection, but it is all born here. The technology we seek
should always speak to the processes we create, improve,
and replace. The impact of a process change on the
organization and its people should be considered when
selecting the perfect software solution. As we work through
optimizing our processes, we must have clarity on where it's
acceptable to water down our processes, customize
processes, or bolt-on another application that will help us
facilitate reaching our desired future state.
As we’ll discuss in Part II, resistance to change should
be expected no matter how large or small the change is.
The word ‘resistance’ often sparks a fear that our people will
flat out reject the initiative. But 99% of the time, people
want change. They understand the need, they become
excited at the idea of progress and growth. It’s the things
you can’t see that present the greatest problems. Most
executives do not anticipate what may be below the
surface. People who are on board with a project in the
beginning may become subconsciously threatened when the
change impact starts to settle in. When the new job
functions replace the old, when the old responsibilities fizzle
and the free time is unfilled, people come to question their
role. They come to question their value when the process
they personally created is replaced with a new system. The
unintentional resistance to change often reveals itself once
everything has gone live and seems to be going well, and it
can be an expensive issue to resolve if not addressed up
front.
The key to overcoming resistance when it comes to
implementing a process change lies in the way it’s
addressed. It should, first and foremost be understood.
What is the root of resistance? If it’s a lack of understanding
of how to operate the new processes, then we’d use a
different approach than if it’s a lack of agreement with the
need to step away from existing processes. A proper change
management strategy that accommodates a shift in
processes will be designed and crafted in a way that frames
out the benefits of the change. At the end of the day, all
humans are seeking progress and growth, and it’s up to us
as leaders to frame the change as such.
Chapter 8 | Next Steps: Perform an
Operational Assessment

Now that we’ve dug through the different elements of

the first pillar of our digital strategy, Processes, it’s time to
build. As you sit in the conference room with a clean slate
whiteboard and talk about business processes with your
team, utilize the tools at your disposal to help you get
started. For example, APQC is a non-profit organization that
provides a technology agnostic business process framework
for several industries in a few different functions. They
provide benchmarks related to your industry processes that
you can use as a reference point. There are other resources
that can aid you in the same breath, but they only provide a
framework.
You and your employees know your business inside
and out. Before you start, think about who should be
involved in the conversation. Who are the stakeholders that
are going to be involved in defining the current state vs. the
future state? It is important to make sure that the key
stakeholders, such as mid-level management, as well as
frontline employees, are involved in these discussions. It’s
not necessary to include every single person within the
organization, but solidifying an effective cross-functional
representation will help in the development of future state
business processes based on the knowledge they have of
the current state.
As we approach next steps, try not to overanalyze
business processes. Focus on where the processes depend
on people and where they depend on technology. If the
evaluation is bumping up against the point where it really
depends on the technology and how it’s deployed, stop and
assess the rest of the details after the technology
deployment takes place. At the end of this assessment,
you’ll have a strong checklist of needs from a prospective
technology, you’ll develop a clear strategy for how to deploy
the technology, and you’ll dial down on the change
management strategy you’d like to use. These elements will
come together to create our overarching digital strategy
and the roadmap to a successful digital transformation
execution.

Step 1: Assess the current state and map out current

processes.

The future state cannot be achieved without

understanding the current state. It is about understanding
the current business processes, what’s working well, and
identifying inefficiencies or breaking points throughout our
existing processes. The retainable processes can be built on,
and any breaks can help target areas that need
improvement.
The first thing to when it comes time to map out our
processes and perform a gap analysis is to create a
Hierarchy of Business Processes. As a refresher, it’s all
about process mapping and prioritizing our processes by
placing them within a hierarchy. The hierarchy has five
levels, with commodity processes landing at level 1 and
core competencies landing at a level 5. After levels 2 and 3
are when the type of technology we leverage starts to
matter.

Insert Graphic to Show Levels of Processes:

Define your core competencies, or the processes that

differentiate your organization from competitors. The define
your commodity processes, or the processes that are similar
from company to company (such as accounts payable, order
processing, etc.) Rank each of the processes to help you dial
in on the processes that need to be further evaluated.
Do not overanalyze the current state operations down
to the transactional level of which buttons get pushed and
what fields are entered. A simple, clear overview of an end-
to-end business process is enough. Evaluate how the
current technologies function, map out existing processes
and define people’s roles and responsibilities as it relates to
those processes to provide valuable insight that will set the
stage for achieving our desired future state of business
processes.

Insert a sample process diagram.

Step 2: Incorporate business process

mining

Business process mining is a fantastic method to

further understand the current state. With this tool, you will
be able to not only understand the qualitative conversation
around what processes exist, but we’ll also discover a
quantitative discussion regarding the actual metrics around
those business processes. It paints a visual picture of how
business processes work in our current state business.
This tool will highlight where processes slow down or
show variances. Focus your time and energy on those
processes ranked between 3 and 5. With the data you find
through process mining, you’ll be able to lay down the
foundation for a future state based on actionable, focused
data.
Step 3: Define the future state.

At this point, the current state has been evaluated,

opportunities for improvement and standardization have
been identified, and successful processes have been
retained.
After all that is complete, it’s time to define the future state
target operating model and end-to-end process flows that
will inch our organization toward our ultimate vision. This is
the capstone exercise. Starting with the current state, or as-
is processes, and evolving to the future state, to-be process.

This should not only look at what the business

processes are going to be, but what the roles and
responsibilities are going to be within the future state.
Ultimately that’s going to drive the organizational change
management plan, which we will get to in detail in Part II.
Another product of defining the future state is a solid set of
requirements that will help define, evaluate, and select the
best technologies for our organization. These same
requirements will also become the foundation for deploying
the technology. The upfront work on business process
definition for the future state is not only going to ensure our
business selects the right software, but also that we deploy
the software in a way that enables the right process
improvements and supports people along the way.

Step 4: Outline process

improvements.
 Within the exercise of understanding the current
state, you will inevitably identify areas of potential
improvement. Bottlenecks will become clear, pain points will
find their voice, inefficiencies will be uncovered, manual
entry of data will show itself, and quality issues will become
apparent. All the issues hindering our business operations
will bubble to the surface within the assessment and
evaluation of the current state business processes.
Along with the tainted processes, you’ll also be able
to see the golden processes. Through the initial assessment,
processes that are strong and intact will also rise to the
surface and show us what is working. These are key parts of
the business and operating models that should be retained.
These processes are the deal breakers in that replacing
these successful processes within the operating model will
cause problems. That’s why the current state enables you to
identify what those future state potential improvements are.
A common exercise that happens in defining future
state improvements in the identification of variations in the
business processes. If our organization has undergone
evolution such as mergers or rapid growth, we likely house a
variety of business processes that have been patched
together. Let this exercise act as a time to identify
opportunities that create a common operating model that
will standardize processes to some degree.
Again, this discovery process does not need to be
completed for every function and all processes. There may,
however, be low-hanging fruits, or areas already targeted
for improvement. Always refer to the Hierarchy of Business
Processes and rank processes on a scale of 1 to 5 to
determine their priority level. Focus on the high priority
processes that truly align with the company’s overarching
business strategy.
Standardization will help, but it is important to look at
all areas that need to retain a certain amount of flexibility,
decentralization, and localization as well. Each business is
different. As you go through this step, remember that there
is not a one-size-fits-all answer for an entire organization.
Consider making only the business process improvements
that make the most sense for the desired future state.

With the information and plans garnered from a

operational assessment, you will be able to bring everything
full circle. These insights will unlock the door to who will be
impacted by the changes and to what extent. This will give
you a starting point to drafting an organizational change
management strategy that would best fit your company
culture.
It will also lay the groundwork and a ‘must haves list’
that will assist in dialing in on a short-list of viable
technology solutions. You’ll understand process
prioritization, the sequence that everything must be rolled
out in, what the interim system architecture entails, and
business intelligence and reporting needs. Take everything
we defined in the assessment and use it as the start of a
business roadmap that leads to our optimal future state in
today’s digital era. This is part one of your implementation
plan. Save this, and you will revisit it and comb through it
once more toward the end of the book.

Part II | People
Chapter 10 | Why Organizational
Change Management Matters

"It is not the strongest or the most intelligent who will

survive but those who can best manage change." - Charles
Darwin.

This holds true in every aspect of life, regardless of

whether it’s personal or professional. There’s a reason why
organizations like Weight Watchers or Alcoholics Anonymous
exist. They are, essentially, organizations that help people
through personal transformations of their own. They help
people manage change and get past the discomfort of
finding a new normal using specific goals and processes.
The thought of positive changes initially gets people
excited. Maybe it’s the thought of finally being able to run a
marathon or being substance-free and living a more fulfilled
life. Maybe it’s automating our warehouse operations to
drive efficiencies in our processes. Whatever the change,
it’s often perceived with excitement to think about potential
improvements at the other side of the finish line. However,
when it comes down to it, most people will regress into old
habits and revert into their comfort zone if they are not able
to effectively manage change and sustain a new normal. All
the effort, time, and money spent trying to improve a
situation will be pointless, and in some cases, detrimental,
without the right change management strategy.
An organizational change management plan is one of
the primary aspects of formulating a sound, overarching
digital strategy. As an organization gets ready to undergo a
transformation as large as implementing new enterprise
technology, it cannot afford to let organizational change
management, or OCM, be an afterthought. Many companies
make the mistake of neglecting OCM until the middle or end
of a project, leading to gaping operational holes once it’s
time to go live. After all, technology is only a machine until
it’s powered by people. Without the support, understanding,
and buy in of those who power the technology and operate
the processes, these high-capital projects may flat line.
Now, why is it that many organizations keep OCM by
the wayside until they’re deep into the project? It’s simple:
Misalignment. Many times, those in charge are more
focused on capital expenditures and meeting deadlines than
they are ensuring their team will successfully adapt. They
are simply not aligned on the significance of organizational
change management.
Change management is one of the most critical
success factors for digital transformation, and yet, it can be
very difficult to sell an entire executive team and other key
stakeholders on the concept of managing change as a part
of a greater digital strategy. This is particularly true with
executives and people that don’t have a lot of experience
with organizational change management, or with complex
digital transformations in general. The following key points
can help companies attain buy-in from stakeholders and
executives and enable their recognition of the need for a
strong OCM strategy. If we take these points to the board
room with us, we will better acquire buy-in from decision
makers to pour into change management just as they do
into process management and software implementation.

Define Organizational Change Management

To understand what change management is, it often

helps to start with what it’s not. Change management is not
a soft, intangible concept that will have the team sitting in a
circle singing “Kumbaya” and making each other feel good.
There is a lot more to change management beyond just
training people on how to use the new system or follow a
new process. In fact, we can argue that the success or
failure of an organization depends entirely on how well the
people behind the day-to-day processes acclimate to new
terrain.
Organizational change management is about tangible
business results. It’s about the impact that a given change
will have on our employees and team members, and
ultimately understanding how individuals and workgroups
within our organization are going to be affected. Once we
understand what the change impact is and, more
specifically, who will be impacted, we can craft targeted
communications, training, and change efforts to fit the
need. To keep it simple, organizational change management
relates to any aspect of our business strategy that will take
our company from where it is today to where it will be in
five, ten, maybe twenty years. It will always be people that
drive processes and technology. Without people, we simply
have a process map and a machine.

Change Management Prevents Failure

During my career, I’ve had the honor of serving as an

expert witness in high-profile lawsuits involving the largest
software vendors in the world and entities that lost capital
because of implementing their well-known software. Believe
it or not, there is one common theme across all
implementations that go to litigation: A lack of
organizational change management. Oftentimes, it helps to
share that exact sentiment with stakeholders to help them
understand that change management is an absolute driver
of success vs. failure. As we discussed at the beginning of
this book, there are two common layers that define success
versus failure when it comes to a digital transformation.
1. Implementing On-Time and On-Budget
Companies that don’t invest appropriately in
organizational change management will ultimately find that
they will spend more time and more money on their
implementation than they would have if they had invested
appropriately in organizational change management.
Investing time and energy into a strategic organizational
change plan is critical to ensure that we’re successful in our
implementation.

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.

Change Management Optimizes Business Value

If we shift gears away from preventing failure and

focus more on optimizing the investment, then the value in
organizational change management will become even more
apparent. There’s a reason that most organizations don’t
manifest the full business benefits they expected out of
their technology, and nine times out of ten, it’s because the
people utilizing the new technology are resisting the
change. We’ll dive into the different types of resistance and
how to get around that resistance in the next chapter.
 However, before we dive into the premise and the
solutions of change resistance, it is important to tie our OCM
plan to the business value that will come from implementing
the new technology. An elevated or maximized return on
investment is one of the most powerful concepts to use
when selling the importance of change management to our
stakeholders, especially at the executive level. To explain
how a return on investment will be maximized by
incorporating a change management strategy, paint this
picture at the conference table:

Imagine a scenario where every single front-line

manager and employee is using the new software in
harmony. Everyone is inputting data accurately, referencing
the data as needed, and in turn, spending less time trying to
solve problems in their day-to-day tasks. By driving those
efficiencies for everyone involved, employees have more
time to focus on other tasks, they will feel less stressed, and
ultimately, bottom-line productivity will increase. As a result,
we’ll see a direct increase in our return on investment.
Now imagine a scenario where there is a fraction of
employees that are not utilizing the software at its full
capacity. Maybe they weren’t trained properly, maybe they
don’t think the transformation is necessary, or maybe they
are married to an old spreadsheet or process they created
to get the job done and they are now having a hard time
pivoting away from it. Whatever the reason may be, we
have some employees and managers utilizing the software
to gather and track data and some employees who do not.
This could lead to holes in the data, inaccurate
information being pulled across teams, and functionalities
on the new software that are not being utilized as they
should be. In this situation, productivity will be bruised as
efficiencies are halted because of skewed data. There could
be multiple streams of data and reporting attributed to the
fact that some people are getting numbers from the new
software while others are getting information from an offline
spreadsheet. There is no single source of truth in this
situation, and it holds the power to cause operational
disruption, delays in the transformation project, and
ultimately a loss on our capital investment.

Those scenario comparisons ought to help get people

on the change management wagon to some degree or
another.

Change Management Reduces Disarray

One of the intangible benefits of dialing in on a

change management plan as part of our digital strategy is
the simple fact that it will make our software rollout
incredibly easier. It will make it simple to integrate new
processes because we’ll have alignment and everyone
spearheading the change, or a part of the change, is ready
to adopt the new day-to-day. No one likes going cold turkey.
People need to be eased in. As a leadership team, we need
to hold their hands as they walk from one side of the bridge
to the other. Creating a plan for how and when to announce
the change is coming, how to train accordingly to ensure
everyone knows the game-plan, how to get everyone
excited, and even fine-tuning everyone’s acclimation post-
go-live will drive the most seamless and effective digital
transformation.

At the end of the day, we’re essentially creating an

environment within our business that can scale. An
organization grows faster than it would otherwise if it has a
culture of elasticity and is ready to pivot with the company’s
processes and technologies. It is critical that a business has
a sound organizational change plan to tie together all the
different components of a digital strategy. Without it, it’s
difficult to craft a solid foundation for growth. In addition, a
comprehensive change plan will also help us navigate the
waters of inevitable resistance that we will experience from
our team.
No matter what our culture is, how big or small our
company is, or how much a software implementation will
support our organization’s growth, there will always be
people who will resist change. The problem is, it’s this group
of people reluctant to adopt a new way of doing things that
have the power to completely derail a digital
transformation’s success. So, how can we identify and win
over the people who don’t want to change?
Chapter 11 | Understanding
Resistance to Change

Change is the world’s only constant. We live in a

world that is ever evolving. Not one thing in life will stay
constant through time. Yet, even with that promise, humans
still face challenges when it comes to withstanding change.
Take Fred, for instance. He’s a guy who loves cheeseburgers
and milkshakes. Year after year, his wife tells him to opt-in
for more vegetables to help him slim down and get
healthier. When Fred thinks about it, he gets excited. Who
doesn’t want to have more energy and feel more confident,
why wouldn’t I want to be healthy? He’s on board for a
couple of days, but then Fred drives past his favorite burger
joint on his way home from work. He says to himself, “One
more burger won’t hurt.” His wife isn’t here to give him a
hard time, it will be fine. The next thing you know, he’s
eating burgers and milkshakes regularly again. It’s his habit,
it’s his feel-good food, it’s his comfort zone.
This continues until Fred goes in for his annual check-
up and is told by his doctor that he is at risk for a major
heart attack, and the only way he’ll turn it around is if he
adjusts his diet. Things suddenly become more serious for
Fred, and he finally cuts down on the cheeseburgers. He
realizes that to stay alive and be here for the people he
loves, he needs to push past the discomfort and build new
habits and new likings. For Fred, the decision to adopt a
change in his day-to-day is rooted in the deep, psychiatric
motivator that his life literally depends on making a change
and getting used to a new normal.
It’s hard to get behind changing a habit that is easy,
familiar, or enjoyable. It’s the comfort zone that cripples
people in moving forward, and it’s the comfort zone that
drives resistance to change. Yet, the comfort zone is where
a vast majority of the world’s population likes to live. People
often experience a feeling of comfort in their environment
when they are familiar with them. A person's stress level
and anxiety levels are relatively low when things feel safe
and when there is a sense of control in their activities. To
step out of this mindset is a challenge.
The psychological toll that change will bring to those
who will endure it is too often an afterthought of those who
are leading the change. The irony is that this lack of
consideration is oftentimes the leadership team slipping into
a comfortable thought of their own that technology and
processes will be the silver bullet that solves everything.
Sorry to break it to you, but there is no such thing as a silver
bullet when it comes to creating a digital strategy.
It’s time to shift that paradigm as a leader. It’s time to
stretch our mindsets. It’s time to understand that the
concept of change is easier discussed than implemented,
and when it comes time for Phil in accounting to change his
entire process when running through accounts receivable,
there might be pushback. It’s as true as the sky is blue. The
question is, how much pushback? Mastering perseverance
through resistance to change is what will set apart the good
from the great.
To get past resistance to change, we first need to
know how to identify resistance. Think of the concept of
resistance as the iceberg that brought down the Titanic.
Only the tip of the iceberg was apparent to the human eye,
but it was the giant mass beneath the surface that cause
the most damage and ultimately sunk the ship. Every story
of resistance to change mirrors an iceberg.
There will always be a small group of people that
express or have expressed resistance, making it apparent to
the naked eye. Maybe they’re vocal about it to their
management team or through a survey, expressing that
there is no need for change, and everything is functioning
well as is. Maybe it’s people who have shown resistance to
different types of change in the past. Regardless of how it’s
realized, it’s the employees that are intentional and obvious
about their resistance to change that are the tip of the
iceberg.
The struggle comes when employee resistance is
unrealized and unintentional. Let’s look back, again, at
Fred’s story. The thought of change excited him. He wanted
to feel good and look good, but when it came down to it, he
would revert to his comfort zone. A parallel story can be told
about some of the employees on our team that will undergo
a change in their duties, whether it’s in their day-to-day
processes or the technology implemented to streamline
their responsibilities within the company. This is
unintentional resistance, and it makes up for a vast majority
of the resistance to change we will experience through our
digital transformation project.
When an organization initially announces a change,
excitement is typically at its peak. Nearly everyone will buy
into the dream – the promise of more seamless operations,
the potential of higher revenues, increased commissions,
less busywork, etc. – the possibilities are endless. It creates
momentum that gets nearly everyone in the organization
excited about what’s to come. However, as the
implementation progresses, some who were once excited
will become threatened. Many times, automating an
employee’s responsibilities will make them question what
their role will look like once the implementation is
completed. Questions will begin running through their mind
that turn their excitement sour. They’ll wonder, Will I still
have a job?
What about the spreadsheet I made that has been a hub for
my team all these years?
Am I going to need to learn a new skill?
Before we know it, their perspective swiftly shifts into
a fear mindset that drives resistance. It’s these individuals
who resist the change more than anyone else. It’s those
who unintentionally resist that have the power to hinder a
digital transformation and deflate the potential of a
successful software implementation.
When we begin crafting a digital strategy, it’s
important to be mindful that these two types of resistance
will always present themselves when implementing any
type of change. The tip of the iceberg, intentional
resistance, is visible to all who pass by. However, the
unintentional resistance that lies below the surface is far
greater in magnitude than what appears to the eye, and it
poses a much larger threat to the success of the
implementation.

Insert Image of Iceberg, unintentional resistance is

sublevel, intentional resistance is at the tip of the iceberg.

Example of Intentional Resistance

The Head of Sales of an organization decides it’s time

to implement a CRM that will help his sales team keep track
of all their leads and walk new clients through the sales
process in an efficient and effective manner. His star
salesman, however, is used to simply going to events,
networking with prospects, and connecting leads to the
business development team via email or text. It’s quick and
simple, and he’s seen great success with it.
During a meeting to discuss the concept of
incorporating a new CRM, the salesman states his
hesitations. He believes adding a CRM will only create busy
work since he would need to enter in all the lead data rather
than just connecting people via email.

Example of Unintentional Resistance

 Phil in accounting has a beautiful spreadsheet he
created that has helped him track his work for the past few
years. He has grown accustomed to entering data on his
spreadsheet, he knows where all his numbers are and where
to find information, and it’s something he was recognized
for last year when he took the initiative to create it for his
team. It’s safe to assume that Phil is going to have a hard
time when a new ERP system overhauls his spreadsheet,
making his hard work and regular processes irrelevant.

The element that challenges most companies when it

comes to improperly managing change is improperly
managing the resistance that comes with change. A
company can spend millions of dollars implementing new
technology, but when the transformation is complete, there
will always be a group of employees that becomes proficient
at finding workarounds to the new processes in place. They
will continue utilizing their tried-and-true spreadsheets and
documents that they utilized prior to the transformation,
they will skip the data entry process and just forward
information on as they always have. Whatever their comfort
zone, they will find a way back to it until they have a reason
not to, a reason that deeply motivates them to move
forward and stay in that newly produce territory.
There are so many variables that can cause both
intentional and unintentional resistance that it makes
uncovering the root cause of resistance a seemingly
daunting task. However, to craft a strategy around how to
overcome resistance, we need to understand the root cause
of resistance. There are three common root causes of
resistance, and once we are aware of them, we can better
spot the inherent risk of resistance to change.

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.

INSERT Inverted BELL CURVE GRAPHIC

X Axis - Competence and Education - add some
outlier points on both sides of the curve
Y Axis - Resistance level

Misunderstanding

If people do not understand what they are being

asked to do or why they are being asked to do it, they will
likely resist. When there is not a clearly defined and
positioned explanation of what’s next, or if there is any fog
surrounding how the future state will support those who will
be losing their sacred spreadsheet, they will likely resist.
This is where generic communications can derail a project.
We cannot approach a change with a uniform, blanket
message to cover every team the same way.
 Change affects different departments, functional
areas, geographies, and even individuals differently. The
communication to each channel should have a cohesive
message, but the carrot will likely need to be different for
each department. Each department is motivated by
something different. For example, those in sales are more
money motivated, and those in accounting are more
motivated by efficiencies and the decline of ‘busy-work’.
Having a clear, distinct message that is communicated
properly is the first step to tackling any resistance that
might come up during a change, if for nothing else, to
ensure everyone is on the same page and understand
what’s happening, when it’s happening, and why.

Misalignment

We often talk about how misalignment can destroy

implementation efforts. The threat of misalignment also
extends into the workforce and the teams that will utilize
the technology. Often tied with misunderstanding, if a user
senses that an upcoming software initiative may impede
what they know has worked in the past, resistance will
emerge.
Consider the recent case of a consumer goods
distributor who was directed by their parent company to
implement SAP across all divisions. Prior to this
implementation, the small distributor had run a very
successful business by creating a niche for their product and
maintaining an entrepreneurial spirit in getting things done.
It did not take long for users to realize that the procedural
mandates that were coming as part of the SAP
implementation and standardization efforts of their parent
organization would put that entrepreneurial spirit at risk. If
things were to become more standardized, then the once
flexible and empowering company culture would be
compromised to fit the new system that was coming into
play.
In this scenario, there was misalignment in not only
their understanding of the change but there was
misalignment between their culture and their chosen
technology. The system they chose did not support their
team’s entrepreneurial mindset that helped the company
thrive and empowered employees to do things in their own
way (to a certain degree), and it clashed when it came time
to go live with the new software.
The purpose of initially identifying the causes and
forms of resistance is to help build a successful
organizational change management, or OCM, plan as a part
of our greater digital strategy. Therefore most change
management efforts fail, because most people assume that
the same change methodology that worked for one
organization will work for another. Each company, each
department, each team, and each individual have a varying
appetite for change. It is the responsibility of the project
leadership and the executives leading the project to be
mindful of how the change will impact everything from
company culture to specific job roles and responsibilities of
those on the team. Once we have a grasp on that insight,
we can craft a message that will alleviate the root causes of
resistance.

Regardless of the source, it’s apparent that

intentional and unintentional resistance to change is
inevitable no matter the organization. Beyond these initial
root causes, resistance can also sprout from cultural issues
within the organization as well. Many times, it’s the
company culture that determines the level of resistance that
will play into the organization’s push toward change. Some
organizations have cultivated a culture of adapting well to
change, while others have the opposite reaction. Regardless
of where a business falls on the spectrum, gauging the level
and rate of resistance we will experience in tandem with our
kick-off to any digital transformation is a very important
piece of the puzzle. To build an organizational change
management strategy that will alleviate resistance head-on,
it’s important to perform an organizational assessment that
will highlight the challenges we’ll face along the way.
A great place to start an organizational assessment is
to send a survey to the greater team. Surveying our team is
a critical piece in mapping out our organizational change
management strategy. To acquire employee feedback on the
current gaps and holes within the current system is to dial in
on the true needs of the organization. In every organization,
it’s a promise that employees have gotten used to current
processes and have developed their own approach to
completing their daily tasks. To survey our team is to
measure their mindset. It’s to understand what is going well
for them and what is giving them a hard time. It will provide
a new lens into the day-to-day of each team’s
responsibilities. When done correctly, a survey could also
shine a light on both intentional and unintentional
resistance that will appear once the transformation
commences, and it will give us a starting point in building
out our organizational change management strategy.
The way the survey is presented is what could
differentiate fabricated answers about the gaps in the
system and authentic and true answers that reflect the
good, the bad, and the ugly that each employee must deal
with each day. Let’s face it, if we are going to allocate mass
amounts of capital toward a digital transformation project,
we want to get a lens into the good, the bad, and the ugly
so we can find the right solution. However, if an employee
thinks they will personally be judged for their answers, they
will not give us the truth. They will only tell us the good, and
that’s only a part of what we are looking for. Rather, here
are a few ways we can induce authentic survey responses
from our team.
Have a third-party host and deliver the survey.

This will create a sense of separation between the

employee and their company, making them slightly more
transparent in their answers. We must put ourselves in their
shoes. Employees will often sugarcoat their answers if they
are aware that their management team will review their
survey answers. It’s far too common that the filtered
perspective shared by front-line employees misleads
leadership teams to focus on solving the wrong issues. We
can’t let that happen.
Take management out of the picture and enable a
third party to facilitate the survey. If we are planning to
undergo a digital transformation, we’re likely working with
an independent, third-party consultant anyway. It’s helpful
to lean on them and ask them to facilitate the survey to
ensure we are getting the most clear-cut, unfiltered
feedback.

Make the survey anonymous.

If employees know their answers cannot be traced

back to them specifically, they will be more vocal about
their concerns. At the end of the day, we’re after their
concerns and the areas of improvement. By making known
that each employee’s response will be anonymous, that is
one more wall they will put down while they are delivering
their answers.

Ask the right questions.

To set our digital strategy on the right course, it’s

important to ask all-encompassing questions that will help
illustrate the current state of processes. By digging deeper
into the specifics, we will be able to identify efficiencies and
source bottlenecks in different workflows. We can ask
questions like:

● How do you like your current technology?

● How do you feel other department software
compares to yours?
● Do you have any spreadsheets that you utilize to
complete tasks in your day to day?
● Have you created any specific processes that
personally help you or your team succeed?

Throughout the survey, it’s also an opportunity to

garner feedback regarding our company culture. Include
scaled or rating questions that will frame the organization’s
understanding and perspective of the company culture to
help determine the team’s appetite for change. Have
employees score different attributes of the organization
around team dynamics, trust between team members and
leadership, and what they believe the company values in
their culture.
Once we have this information, not only will we have
better insight into the needs of the organization, but we will
also shine a light on the tip of the iceberg. We will get a feel
for what might come up unintentionally as well. Resistance,
both intentional and unintentional, will become fairly
apparent after a proper survey is completed. Once the
substance below the surface is measured and analyzed, it
becomes more intuitive to dial in on an effective
organizational change management plan.
Chapter 12 | The Power of Company
Culture

There are 195 countries across the

globe. Each one has its own distinct
language or dialect, its own unique
cuisine, even its own mannerisms. From
the way we greet each other to the way
we treat each other; cultures vary from
one to the next. There is not one country
in the world whose culture completely
mirrors that of another. They may try to
adopt attributes, but at their core, each
culture is and always will be rich in its own
unique way.
As we kicked off a new decade in
2020, there were an estimated 214 million
companies operating across the globe[2].
The same distinctions that make countries
unique are true of companies as well.
There is not one company in the world
that's culture is the same as the next.
There will always be different dynamics of
leadership, of collaboration, and of
operation that distinguish one company
from another.
With this understanding, it makes
sense why each company needs a
customized organizational change
management strategy to help guide a
seamless transformation. The reality is
that we can only get to where we’re going
if there is an understanding of where we
are today. In this chapter, we’re going to
walk through how to clearly identify and
define what our company culture is and
how to mold a culture that can launch a
company leaps and bounds ahead of
competitors.
The concept of company culture is
often undervalued due to its intangibility.
Some believe that culture is built on its
own through the natural dynamics across
and throughout teams. Although this is
true, letting a culture grow and establish
without any intention behind it is like
letting a runaway freight train out the
gate. We would be playing the lottery to
host a positive company culture when
there is no strategy or intention behind
building one. Once a company culture is
established, changing it is like trying to
move a twenty-ton boulder – it’s not
impossible, but it would require special
tools and equipment to get the job
done.
On the other hand, if we’ve
intentionally built a strong company
culture and promoted our core values
through every new hire, every team event,
and every action we take as a leadership
team, it makes a difference. However, the
perspective of company culture will vary
from a manager or executive to a front-
line employee. For that reason, we need to
step out of our own perspective and think
about how the day-to-day is for Bob in the
warehouse or Jill in marketing. Is it the
same culture on the sales team as it is in
the warehouse? What are the differences
and what are the similarities?

What is company culture?

 Company culture is often
considered the feel of a company. It’s the
intangible element of a business that
frames how people feel when they come
to work each day. It’s the dynamic
between team members and between
management and employees. Is there an
open and honest dynamic between
leadership and individual contributors? Do
employees trust the management and
executive team? Is the team excited about
the projects they are working on or do
they feel like they need to come to work
each day simply to cash out and go home?
These are all questions that will help us
understand how our existing company
culture has been established.

ADD CULTURE GRAPHIC HERE[1]

As we begin to ask ourselves these

questions as it relates to our specific
company, we must look at it from the
viewpoint of the various teams that work
together throughout the company.
Consider these questions from all
perspectives to help move the needle in
day-to-day operations. The perspective of
Bob in the warehouse or Jill in marketing
will be different from those sitting in the
boardroom, but it’s Bob and Jill’s
perspectives that ultimately form the
greater cultural norms of the company. As
we formulate our surveys, we must add
questions regarding the company’s
perceived existing culture, otherwise, the
viewpoint of those on the front lines could
be missed.
The questions sprinkled throughout
this chapter are the specific questions we
can ask employees via an anonymous
survey to gauge how they feel each day
when they come to work. As leaders,
however, we will need to look under the
hood to see what’s causing these
perspectives. Consider things like
incentives, recognition, and the work
environment. Are we promoting flexibility
and work-from-home options, or does our
company value in-person collaboration
and host a badging system to make sure
people hit their hours? What do we favor
as a leadership team, and could it be
creating a more political environment than
we intend it to? Do we recognize the
assist, or only the points scored? How
many new employees do we have versus
tenured employees? To truly identify and
understand the root of our employees’
perspectives, we’ll need to evaluate these
questions thoughtfully and honestly to
dissect employee perspectives that serve
and harm our company culture.
Besides the fact that having a pulse
on our current company culture benefits
the greater good of an organization, it’s
also important to realize that the current
culture will either enable a digital
transformation or undermine it. Let’s take,
for example, a company with very siloed
operations, no cross-functional synergy,
and a sense of competition rather than
collaboration from team to team. It would
be safe to assume that a transformation
would be more of a challenge for such a
company than one with an opposing
culture. Implementing new software that
touches various departments will require
those teams to become more collaborative
and understand the impacts of their
approach on daily tasks. In other words,
the company would have to undergo a
complete cultural overhaul for a new,
collaborative digital transformation to
work. Without that cultural evaluation and
adjustment, a software implementation is
at risk of adding little value to the greater
organization because it will not be utilized
as it should be.
Anytime we begin a digital
transformation, an organizational
assessment should be performed to fully
understand our starting point. In the
previous section, we discussed how to
identify and address resistance to change
in an organizational assessment. We will
also leverage an organizational
assessment to identify and address our
company culture, or at least how it’s
perceived by those working the day-to-day
operations.
Let’s revisit the reasoning behind
bringing a third-party organization to drive
authentic and honest feedback from our
team. The thought of submitting answers
anonymously without having any negative
comments tied back to the person
submitting them will enable a better
feedback loop. It will not only unveil the
elements of resistance and determine
silos and holes within the organization, but
it will also open the door to honest
feedback about management and team
dynamics. We will be able to weave in
questions surrounding the company
culture to fully understand and nail down
how employees operate on an intangible
level in and out of the office. There are a
handful of questions we can add to the
survey to help dial in on the current
company culture.

● Do you trust your managers?

● How would you describe the
collaborative culture within your team?
How about the greater company?
● Do you feel comfortable asking
questions or asking for help when you
need it?
● Do you feel comfortable reaching out
to others in a different department to
collaborate on new ideas? If not,
what’s holding you back?
● Is there open communication amongst
your team?
● What are you excited about within your
role at the company?

There are also questions that we

can consider as a management team. For
example, is the team made up of people
who have been there for a long time? If so,
this may cause some obstacles when
creating change. Or, how can we build
trust between leadership and employees?
An assessment will uncover the gaps that
could come up during a transformation.
Without a thorough organizational
assessment, we will struggle to
understand the current company culture
and may hinder the team’s ability to
transition to a new technology. At the end
of the day, our goal in formulating a sound
digital strategy is to tie in all the
components of processes, people, and
technology. It’s mission critical to
understand the essence of both the
culture of the organization and and the
essence of the software.

To illustrate the importance of tying

the three pillars together, let’s take a
closer look at the role company culture
can play in a digital strategy with the
following example.

CASE STUDY GRAPHIC:

Colorado Rocket Launchers

Colorado Rocket Launchers is a

make-believe company that launches
rockets into space from the summit of
Mount Evans. It started as a small family
business in 1980 and has grown into a
large corporation since. On the surface, all
the employees support each other in their
projects. They are kind at the table and
keep up with small talk and engaging
banter, but under the hood, the
organization has grown to become very
political and cut-throat. People go about
projects with an overconfident demeanor
because it is often those who speak the
loudest that are noticed. Over-promising
and under-delivering have become
acceptable. It’s no surprise that the same
dynamic holds true when Colorado Rocket
Launchers initiates a digital
transformation project.
Those leading the digital
transformation are overconfident in their
abilities to manage the transformation
internally and are not fully transparent
with their leadership team about their
management capabilities. Their flaws
eventually become exposed halfway
through the transformation as the wheels
start to fall off. Deadlines were missed,
key elements of the implementation were
overlooked, and most importantly, the
revolving door begins to turn. Their digital
transformation exposed the negative
attributes lurking deep in the dynamics of
their company culture, and they bubbled
up to the surface through their digital
transformation. The result? Tons of
turnover on the transformation team.
People were either cracking under
pressure or realized they were too far in
over their heads to carry the weight of the
project.
The reality is, Colorado Rocket
Launchers is not alone. Every organization
has flaws that need to be address when it
comes to building a strong company
culture. The need to address those
cultural deficiencies is more prominent
when considerations for digital
transformations start to take shape. If
cultural issues are not addressed prior to
embarking on a transformation journey,
then those very issues will rise to the
surface and create road bumps along the
way. For that reason, performing an
organizational assessment will help
identify pain points that could disrupt a
digital transformation.

The question remains: how can we

identify our company’s cultural issues?
Across the sea of answers, we’ll receive
from our organizational assessment, there
will be telling responses that will point to
certain red flags and specific issues with
the potential to impact a digital
transformation project. Some red flags
may include the following:

● Lack of coordination and

communication between departments
● Lack of communication between
executives
● Lack of vision
● Unclear roles and responsibilities
● Lack of distrust in leadership
● Tribal knowledge is held by employees
who have been with the organization
 for a long time and has not been
passed on or fully understood by newer
employees

If survey answers point to any of

the warning signs listed above, it’s critical
to address issues straight out the gate
prior to investing time, money, and
resources into implementing a new
technology. Addressing existing flaws to
create a more sound foundation for a big
shift in company dynamics will help ease
the transition to a future state. Let’s talk
about how to change or adjust our culture,
and what it means to do so.

Cultural Change Dynamics

When organizations go through a

digital transformation, they typically are
also transforming their culture. Now, what
exactly is cultural change and how do we
enable it? Cultural change is often a key
component of any sort of transformation,
whether we’re talking about a business
transformation, digital transformation, or
even process changes alone. All elements
of change are linked to a change in
cultural dynamics and it’s important to be
mindful of that as tides shift. Oftentimes,
organizations are using technology and
business processes to fuel and to bend
their culture in a way that meets the
future strategic objectives of the
organization. Let’s take a deep dive into
the components of cultural change, and
how we enable change in a way that
compliments the overarching business
strategy.
The first step in any sort of cultural
transformation is to define the mindset
that we want the organization to represent
in the future. For example, typically
organizations start out small and become
larger over time. During that journey of
growth and maturing, the organizational
culture must evolve to meet the new
needs of the business. The culture itself
needs to transition and shift and bend to
keep up with the changes of the
organization.
Let’s take a large organization, for
instance, that found its success by
encouraging an entrepreneurial mindset
across the company. As they scale and hit
new milestones as an organization, they
may find that they need to start adopting
more corporate, structured tendencies to
keep things efficient and optimize their
operations. By standardizing processes
and driving those specific efficiencies, the
organization is going to inevitably
experience a shift in their cultural
mindset. The team will pivot from that
entrepreneurial environment to more of a
structured, predictable environment.
At the end of the day, this sort of
shift isn’t going to happen overnight, nor
should it. However, it can, and should, be
top of mind. Start thinking about ways to
deliberately bend the culture to migrate in
the given direction that resembles the
future state and what we want the
company to be in five to ten years. As
other parts of the transformation are
enabled, such as process improvements or
technology enablement, the culture will
also be a means of further fueling and
enabling those changes that we envision.
Other examples of potential cultural
mindset shifts that may apply during a
transformation may include driving
innovation within our organization, fueling
better collaboration, greater transparency
and better data-driven decision-making.
These are all cultural nuances that need to
be deliberate and planned as part of our
cultural change strategy, otherwise, they
will not be achieved. We either steer the
ship or the tide will take us somewhere we
didn’t plan to go.

Business Process Changes

The second part of any sort of

cultural transformation is the business
process changes or improvements. As
we’re thinking about what types of
business process improvements our
company needs in regard to
transformation, we should also be thinking
about the way that those changes in the
workflow may affect company culture. We
could even consider the inverse, framing
the question around how our company
culture can be the very thing that drives
or encourages process improvements.
Whatever angle we look at it from,
think about our business process
adjustments through a cultural lens. At the
core, business processes can either
become more standardized or more
flexible. Some organizations will find that
earlier in their lifecycle, a certain amount
of flexibility is important. Then, as they
scale, standardization begins to trump
that which came before it. However, in
some cases, a company can become so
big, and so standardized, that they find
that they need more flexibility again. The
cycle continues, and every organization
falls at a different point on that spectrum.
As we start thinking about the
attributes of business processes discussed
in Part I of this book, we’re going to find
our organization leaning either toward
integrating more flexibility, more
standardization, or maybe adopting a
hybrid of the two. As we design said
processes, we can dig deep into how each
scenario would affect our company’s
culture. Is there a way to bend the existing
culture to support whatever process
improvements we’re driving towards? If
so, do it.

General Organizational Competencies

Another great aspect of cultural

change is the general organizational
competency a company has. As a
company grows, evolves, enters new
markets, takes on new customers, and
brings on new employees, the need for
different organizational capabilities and
skills will also grow. When we think about
the company culture, we must think about
what kind of skills and competencies are
needed and just how we can construct a
successful culture around those new
competencies.
We often find that organizations
that are trying to use technology to enable
better decision-making or better business
processes will find that they need new skill
sets within their IT organization (we’ll dive
deeper into this in Part III). We also have
situations where a customer-driven focus
of an organization may require new
customer service skill sets, processes, and
technologies to support that. This all
requires organizational design, hiring, and
recruiting processes that support that
entire organizational shift. When we’re
thinking about our culture, we need to be
thinking about those competencies and
capabilities that already exist. With that,
what is it we need going forward to pivot
the culture in the right direction?

Changing Company Culture

We now need to look at this from

the lens of processes, people, and
technology. We can begin by pondering
the question of which technologies will
support the type of culture we’re trying to
create. Often, we fail to consider the
impact software can have on a company’s
culture simply because the two seem
distant at first glance. It’s easy to let
technology do what it does best – sort,
organize, and deliver data – without
considering the larger cultural
implications.
The reality is that technology holds
tremendous power in shifting a company’s
culture, for better or for worse. If we want
to be intentional about our company
cultures, it’s important that we consider
how our business processes will touch the
company’s culture and the greater team
dynamic. If we are an entrepreneurial
company but opt-in for standardized
processes, our entrepreneurial light will be
dimmed. If we have a very structured
organization dedicated to a plug and play
approach, then implementing a system
with flexible modules and ever-evolving
processes will skew our day to day.
With that in mind, it all starts with
an assessment of our company culture.
Dig into the people side of the existing
process and technology trifecta. This is
where we will find the right messaging
and communications, training, and
organizational design that will support our
digital transformation launch. More
specifically, we will understand how to
support collaboration, identify talent
needs, further build on our strengths, and
tend to our weaknesses as an entity.
Where are we today in the sense of our
employee dynamic? Do employees feel
comfortable sharing new ideas with their
leadership? What do we value in our
organization and how is that recognized
when employees embrace those values?
Ask the difficult questions that will help
gauge the organization’s current culture in
its current state. If we can grasp our
company culture on a scientific level
before any changes are made, we have a
better chance of leading that change in an
effective and efficient manner.
The goal is to view cultural change
through various lenses. This will ensure
that cultural change permeates everything
we do throughout the rest of our
transformation. Once we know where we
are, we can begin to craft where we are
going. What do we want our future state
to look like, specifically when it comes to
culture?
At a high level, our future state is
ultimately what we want to be when we
grow up. It’s the detailed vision leadership
has in mind when they picture the
company in five to ten years. As we define
what we want to be when we grow up,
from a cultural perspective, it’s important
to also consider how we are going to get
there. Depending on how we bend our
company culture walking into a
transformation, we can inch ourselves
from where we are today to where we
want to be down the line. Again, it’s not as
simple as just putting in new processes
and new technology and hoping for the
best. We need to be more deliberate
about the direction we are steering the
ship. This requires us to be intricately
intentional about change management
efforts and understand how each element
of the greater transformation will create a
cultural change.
Once we can piece together a
cultural roadmap as part of our overall
organizational change plan, we can move
on to the next step. Without the cultural
and organizational intention behind a
business and digital transformation, the
project will be moving without a targeted
destination. It would be as if we’re on a
trip headed to Spain rather than to
Barcelona, Spain. Without that pinpointed
target, we may end up in Madrid or even
in the middle of the Mediterranean Sea.
We must be intentional and specific about
our destination in order to see the magic
unfold as we begin our journey toward
orbit.
Chapter 13 | Organizational
Alignment

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.

Red Flags That Point to Misalignment

A lack of clear-cut governance processes

guiding the transformation.

If our company has an ‘open door’

policy but employees are unsure where to
funnel a question or concern, then
employees will decide for themselves
whose door they want to knock on. When
given the opportunity to choose,
employees will likely reach out to the
executive that allows the most flexibility,
even if that executive is not the most
qualified to address the issue. This
scenario also poses the potential of
getting different responses depending on
which executive is asked.
Imagine that during a software
implementation, a department identifies a
critical need for new functionality and
wants to purchase a different system to
handle their needs in the interim. This
type of decision should follow a prescribed
process with a clear and distinct sequence
of actions. The steps a department or
employee should take when purchasing
and implementing a new software
program should be specific and consistent.
If direction is vague and users are
instructed to go “ask the executive team”
in general, there can be two different
responses. The COO, for example, may
immediately state, “Yes, we cannot hinder
operations.” The CFO may say, “Absolutely
not, we have a fixed budget that this does
not fit in.” Where do you think the process
owner will go?

Leaders’ financial interests are

imbalanced during the transformation

Take the previous example. Let’s

say in this case, however, that the COO is
designated as the executive sponsor
responsible for approving customizations
and disparate products. He is also
guaranteed a $10,000 bonus if the
implementation is delivered on-budget. In
this case, the COO will be incentivized to
deny any modifications to the budget,
regardless of the potential benefit to the
organization. Even though this approach
may be based on good intentions, it is a
recipe for ERP failure.

Executive technology bias in influencing

the transformation
 Executives are placed in leadership
roles because they have ‘been there’ and
‘done that’. In many instances, their past
experiences include ERP implementation
or a digital transformation. Often times, if
an executive leader had a bad experience
with a specific technology in the past, they
would carry that bias against the same
technology products in the future. They
can either veto the pursuit of a system
that would otherwise be the best fit for
their new organization, or they could bring
a heavy load of negative energy to the
project. On the other hand, if they had a
good experience, they might assume it
will all go without a hitch without realizing
they may have been one of the lucky
ones. Some of the worst ERP failures were
due to leaders deciding to purchase a
technology platform simply because it
worked in their previous organization.

Undefined corporate strategy

 Ultimately, all companies are in
business for a reason. Whether they are
out to maximize shareholder profit or
make the world a better place, their
mission was hopefully clearly defined from
the start. Following this mission is the
basic strategy needed to accomplish
established company goals and
objectives. If this stated strategy is
missing or not clearly defined, then
executives will fill in the blanks on their
own, resulting in each executive focusing
on relevant, yet different, strategies.
Without a defined, overarching
mission, a digital transformation initiative
will be subjected to the various
perspectives of this misaligned executive
team. One leader may be targeting simply
to replace outdated technology with little
disruption, another may be looking to
reduce waste, expenses, and headcount,
another may be looking to enable growth
while another to enable use of data and
emerging technologies. Two plus two
equals four, but so does three plus one.
There are different strategies to get to the
same place, and that could be the very
cause of the silos between executives. An
executive team pursuing different
approaches to solve the same problem
has the power to derail a project, keeping
an organization from arriving at its
destination at all.

These high-level examples of

misalignment will trickle down as mixed
messages to the greater team. When it
comes time to execute an organizational
change management strategy and
communicate the changes coming down
the pipeline, a company will struggle
without synergy from above. With that
said, before we get to the point of
mapping out our communication plans
and training formats, we need to nip any
misalignment in the bud from the very
start.
The first step is accepting
misalignment. Executive teams rarely
believe they are misaligned. It is often
middle management that feels the push
and pull, identifying issues and concerns
at the top of the organization. The
problem with this is that mid-level
managers are rarely given an opportunity
to share their perspectives. If they do,
they may not be taken seriously, and in
some cases, they’re given a pink slip when
they share their views on issues related to
the executive leadership.
The smartest way to handle
apparent executive misalignment, or even
assess if there is executive misalignment,
is to outsource. Do not perform this
exercise internally. Tap on a trusted
consultant that will be able to help gauge
this level of understanding and shine a
light on potential misalignment issues
without having to navigate difficult
internal biases and egos. Hiring an
objective third party can help smooth the
edges of a potentially jagged situation.
Whatever we do, it should be our goal
to ensure clear alignment across all
aspects of our organizations. We must
move forward as one, unified front if we
hope to reach orbit. Any opposing or
adjacent winds will deter our progress and
result in our launch being off target. From
the moment we begin discussing digital
transformation goals to long after go-live,
we should commit to being intentional
about minimizing gaps, curbing silos, and
bringing all stakeholders together as one.
Chapter 14 | Organizational
Structure

How do we know what works? More

importantly, how do we make sure we
keep what’s working? It is apparent in our
company data and procedures what is not
working and what is ultimately hindering
operational efficiencies. It is often easier
to recognize the trouble spots with our
teams and our procedures simply because
flaws stick out like a sore thumb. However,
in an age of shifting business models,
rapidly evolving technology, and shifts in
market and consumer habits, figuring out
what is going right with our team may be
one of the tougher challenges we face.
Let’s drill down into organizational
structure and how it plays into building a
sound digital strategy. Think of an
effective organizational structure as a
snowball rolling down a hill. Yes, the
snowball will continue to grow larger as it
descends the slope, but that’s not our
focus. Our focus should be on the snow
that doesn’t quite latch on, enabling the
snowball to form into a round, smooth ball
of ice as it picks up speed. Some snow just
isn’t meant to become a true part of the
whole, even if that snow sits in the path of
the descending snowball. The snowball
will fling away pieces that don’t fit into
place and will pick up the freshest powder
to mold into its surface. Organizational
structure should be addressed like this
snowball. One can only get the cleanest,
strongest, best result when the
organizational structure is molded using
only the pieces that fit best.
Let’s look at an accounting team
that’s been successfully cranking out
deliverables for their company for a fair
number of years. They hum along with
minimal oversight because they’ve
become a cohesive, goal-oriented, and
progressive team. Even so, change
lingers. A new artificial intelligence (AI)
technology has been introduced to their
CFO, and the leadership team knows the
same work can be done much faster and
more efficiently if the AI technology is
integrated into the mix.
What has made the accounting
team successful thus far is that each
member relishes their role and has been
excelling at what they do. However, they
are now facing structural change rooted in
the overhaul of their day-to-day practices.
To modernize and prepare for new projects
to come, the executive team agrees to
integrate this new technology into the
accounting team's operations.
Right out of the gate, the team
discovers that digital means something
different today than it did five or six years
ago. Machine learning and AI have grown
as tools in the organizational toolbox,
pushing their way into the realm of
business intelligence (BI). The accounting
team has been tasked to get trained and
become well versed on the new AI system
immediately.
By nature, this shift in operations
will shift the accounting team’s
organizational structure. The AI system is
added to the team’s skill set, but it is
automating many parts of team members'
roles. Phil in accounting may have been
the point person to process accounts
receivables, but that entire task is now
automated. What does that mean for Phil?
What will that mean for Phil’s
management team? Will Phil be a spec of
snow that is flung off the greater, rolling
snowball, or is there still a place for him
with redefined responsibility?
While building our digital strategy,
this restructuring of roles and
responsibilities should play into our
thought process. Once we implement new
technology, what will that do to our
organizational structure? We need to think
about which roles will be impacted, and
more importantly, how those roles will be
impacted. The natural fear that drives
resistance to change is entrenched in the
thought of losing what one has. To
mitigate resistance, we must think about
this scenario in advance and manage the
expectations around it.
Maybe it’s a message to the greater
team that although job functions may
shift, there will be new opportunities for
everyone impacted. We could reassure the
team that there will be no layoffs, or that
if there will be changes in team structure,
there are resources available to grow
one’s skill sets and adjust to the needed
changes.
As leaders, we need to be
comfortable with the idea that it’s okay for
things within our organizational structure
to change if we approach it with empathy
and intention. If it works and the snowball
rolls faster and smoother as it grows,
that’s just fine, so long as it continues to
roll in the right direction. The parts that
aren’t working effectively will be shed
along the way and used to water the grass
beneath it.
Let’s take another example of a
company that has scaled through multiple
acquisitions, consistently buying up
smaller competitors with similar services.
This company has expanded dramatically
and has kept each acquired entity
operating effectively as it holds onto its
original processes and technologies.
Although the business continues to
function, the independent systems and
cultures that have come with each
company acquisition have created silos.
There are culture gaps, and even process
gaps between departments within this
ever-growing company. After some time,
the company begins to feel the weight of
the various processes, technologies, and
cultures under one roof. The snowball rolls
downhill, but it labors now. There’s not as
much inertia, not as much good energy,
and many bumps that slow it down along
its path. Rather, there is wasted effort and
the company may only be able to sustain
its size for so long. The only way the
company can function optimally is if the
various departments find synergy.
Finally, the COO decides to
transform the disparate parts into a single
unit, crafting a digital strategy that will
ultimately bring the entire organization
onto one software platform. By doing so,
common grounds of practices and
communication will be born. The move will
reverberate all the way down to new roles
and responsibilities amongst managers
and peers. There will be new team-to-
team collaborations, there will be teams
and departments that consolidate efforts
under one leader, there will be new roles
and positions created, and some existing
roles will be redefined. This level of
change will drive a shift in the foundation
of the organization’s structure.
It’s imperative that the leaders of
this organization think through the new
structure clearly before moving forward in
selecting software or adjusting processes.
Of course, the final organizational
structure will shift through the digital
transformation, but it’s important to walk
into a project with a vision of what that
new structure could look like.
 To keep the company moving
forward efficiently is to keep the snowball
rolling. This brings us back to figuring out
what is right with our company and
enhancing the synergies and processes
that enable us to succeed. Our digital
strategy should be integrated into the
forefront of our business, as it affects
every element of a company. Most
importantly, it impacts people, and it will
enable our organization to operate in its
most efficient state. Many times, it’s the
emerging technologies of the world that
will push our organizations to perform
optimally, but our perspectives will vary
depending on which side of the table we
sit.
Employees, more often than not,
are the ones that jump to the big question
of the twenty-first century: Will robots take
my job? It’s not as far-fetched as some
might think. Honestly, it’s not far-fetched
at all. A company might need to integrate
new technologies to stay relevant in the
marketplace, and that will inherently shift
its organizational structure to better
incorporate components, such as AI, to
keep at the top of its game.
The reality is, many existing jobs
can and will be automated. Whether it be
by robotics process automation, AI, or any
other emerging technology that has yet to
be developed. It’s inevitable. However,
what will come of it will be far greater.
New roles and responsibilities will be born
as a by-product of advancing our
technologies. It was in the 1970’s and
1980’s when society feared computers.
People thought the world was going to be
taken over by computers and that their
jobs (punching numbers into a calculator
and crunching numbers with a pen and
paper) were done for. They thought their
careers would be gone and their livelihood
destroyed. But what actually happened?
The profession of information
technology was created. Universities
began teaching students how to develop,
how to code, the ins and outs of process
automation. Newer, higher-paying jobs in
technology filled the market. Those who
ran the numbers with a pen and paper or
managed files began to do the same, just
in a cleaner, more efficient way. It was
quite the opposite of peoples’ initial fear
that occurred. Rather than losing their
jobs to computers, they got better jobs
managing the computers. The shift
pushed society forward, pushed the
human mind to higher levels in
understanding, and ultimately enabled us
to get much more done as a species than
we could have before.
The same will be true for artificial
intelligence, robotics process automation,
and all other emerging technologies that
are currently viewed as a ‘threat’. Sure,
many roles and job duties will indeed
become automated, and maybe the need
for a person on the packaging assembly
line will dwindle. However, with it will
come the opportunity to learn how to
operate, maintain and optimize the robot
that will now package the products on the
assembly line. The only element that
leaders and developers alike need to be
mindful of is putting good people in
charge of the technologies that will soon
dominate the marketplace. Technology will
always be submissive to the people
managing, maintaining, and developing it.
The power will sit with the people that
know how to operate technology.
Whomever we select to sit in that chair,
we must make sure we trust and support
them in their approach.
A leader within an organization
shifting to new technologies must
strategize and communicate what the new
organizational structure will look like.
Team members will inevitably get bumped
from their existing roles into a new role as
a result of a robotics process automation
or an AI integration. Maybe there are
advantages to taking someone off the
accounts payable focus and putting them
into a role where they can assist the
team’s new system. Either way, having a
smoothly operating organizational
structure will help a business with the
following:
● Quicker decision-making
● Improved operating efficiency
● Enhanced employee performance
● Decreased duplication of work
● Less employee conflicts
● Better communication

Our company will inevitably

diversify its goals and perhaps even its
products or services, and the
organizational structure will change, then
change again, and then change yet again.
Our change management strategy should
focus on this, as should our organizational
structure and our ERP systems. A focused,
synergetic digital strategy helps us weave
all these facets together, like a solid,
smooth snowball rolling along despite all
the persistent changes in technologies,
markets, and consumer needs. This will
allow for a swift adoption of emerging
technologies to become a major part of
our success.
 A shift toward new technologies will
result in a shift in organizational structure.
Old departments will become stakeholders
in new technologies and machines, and
old employees will begin focusing on new
tasks. Departments will shift and turn, and
hierarchies will pivot and change. Even so,
one thing remains true: It is up to each
person to rise to the occasion and learn a
new skill to stay relevant in the workforce
and evolve as organizational structures
evolve. Some people will jump on board,
others will resist the change. A good
leader will approach digital transformation
with this in mind and speak to the
concerns holding people back in moving
forward.
Chapter 15 | Change Impact on
People

Processes, people, and technology

are all connected by change. There is no
change within one pillar of an organization
that will not impact another, and it’s safe
to say that any shift in processes or
technology will impact the people behind
the operation. It’s critical to think through
the cohesive, downstream impact any
adjustments to people, processes, or
technology might have. We must dig
below the surface. By doing so, we’ll have
a better understanding of how team
dynamics and specific responsibilities
within impact roles will be affected.
Say we’ve recently gone through an
assessment of our manufacturing
processes for our best-selling product.
After going through this exercise, we
determined that a small adjustment in the
way we meld plastic will drive efficiencies
in our operations. It will allow us to meet
demand in a more practical manner,
making it the most optimal solution to
shorten production times and eliminate
bottlenecks within the manufacturing line.
Joe, a tenured employee responsible for
the melding process, will just need to be
trained on the new workflow, and we
should be good to go, right? This is where
a lot of executives trip up.
It is not just one, small change. It’s
not just one employee who will be
impacted. Sure, it’s only one piece of a
greater manufacturing process, but we
must open our eyes to how that pivot will
impact others up and downstream.
On the surface, it may appear as
though Joe will simply need to learn the
new process of melding the plastic.
However, it’s only when we take a step
back that the greater impact becomes
apparent. Joe is going to have to change
multiple elements of how he does his job.
Everything from the materials ordered to
how he enters production data in the
system will shift. Beyond that, Roger in
procurement will need to understand the
different quantities or supplies needed to
accommodate the change. There may be
new parts that need to be ordered or a
new material that might cost a bit more
than the original. If the new materials cost
more, the price we charge the end-user
may increase. If that’s the case, it would
affect Lisa on the web development team
to update the website accordingly, and it
will require Francisco in sales to shift his
sales approach to accommodate a higher
price point. It may even impact Sarah on
the fulfillment team if the weight of the
product varies from what it was prior to
the change, or the production time is
much shorter so her team could get the
product into shipping quicker than they
had before.
It goes beyond one small change. It
goes beyond Joe. In fact, it touches
multiple levels of the organization, and
unless we are aware of that impact, we
will likely run into some level of
operational disruption. This example
illustrates the trickle-down effect of one,
seemingly small process change. It’s no
wonder that many overlook the concept of
organizational change management,
especially when a change seems
insignificant at first. The impact of change
is often diluted and difficult to visualize at
first glance. How hard could it really be for
Joe to apply one additional step in a
process he already knows? A change that
impacts only Joe at first glance can turn
out to be a change that impacts multiple
people, teams, and maybe even multiple
departments across the workflow.
Joe’s example is a relatively easy
one to understand as far as change
impact goes. However, it becomes much
more complex when it comes to pivoting
core processes and technologies through a
digital transformation. Regardless of the
size of the change, the same stands true –
managing the human aspect of a
transformation can make or break the
success of our overarching digital strategy.
 There are several critical work streams
within change management, such as
organizational design and the redefinition
of employee roles and responsibilities as
we discussed in previous chapters. If we
plan to completely automate the plastic
melding process and implement robotics
to get the job done, it’s important to
define and communicate the change to
Joe and the surrounding touch points of his
role early on. Prior to making a change,
we should first consider the impact that
implementation will have and understand
how individuals and workgroups within our
organization are going to be affected by
the transformation. With that, we can craft
our communications, training, and change
efforts around the needs of the people
who will be overseeing and executing the
new process.
Without this intentional effort,
people will succumb to an apprehensive
mindset and think that robots will take
over their jobs. They may become hesitant
to adopt new processes that support the
transformation, causing both intentional
and unintentional resistance to change. An
intentional approach to communicating
and training employees is the foundation
of appropriate and effective change
management.
Chapter 16 | How to Convey the
Vision

Up to this point, we’ve discussed

the importance of organizational change
management, how it impacts business
transformation success and the
repercussions of neglecting it through the
formulation of a digital strategy. Now that
we know how important it is to the launch,
we now need to talk about just how to do
it. Where do we start when formulating an
organizational change management plan?
When should the planning begin? What
are the key elements that need to be
included in the plan? When do we start
communicating with employees, and what
do we say?
The key to successful organizational
change management is to initiate
communications and training with the
greater team straight out of the gate. As a
matter of fact, we can never start the
process too early. Far too many
organizations wait until the end of a digital
transformation to address the change with
their greater team, leaving employees
with doubts all too close to go live.
Understand that there will be
resistance, and there will be hesitation.
It’s inevitable, and the goal of a change
management plan should be to mitigate
that resistance and ensure everyone feels
as comfortable as possible with the new
normal by the time it launches. As soon as
we set foot on the journey of piecing
together a digital strategy and executing a
digital transformation, it’s time to outline
a change management strategy. It starts
at the beginning, and the
conceptualization and execution of change
management will intertwine with the
overall digital strategy from start to finish.
Let’s unravel the five components of
initiating a strong organizational change
management strategy that gets
organizations from their current state to
their future state.
5 steps to jump-starting change
management efforts.

1. Perform an organizational readiness

assessment.

Even in a scenario where all our

employees are excited to utilize new, up-
to-date technology, we will always
experience some degree of pushback.
Many times, leaders think that everyone
across the organization is tired of their
system from the early 2000s and can’t
wait for an upgrade. That may be the
case, but even so, resistance rarely
manifests itself upfront.
Resistance to change comes once
the change approaches and begins to
impact someone’s day-to-day. The
purpose of performing an organizational
readiness assessment is to uncover the
level at which people will resist change,
what the root causes of resistance are,
and what pockets of the organization will
push back on the changes coming down
the pipeline. In this phase, we will be able
to shine a light on obstacles such as
perceived misalignment, communication
breakdowns from department to
department, and even a negative
perception of top-down management – all
components that can hinder the success
of a digital transformation.

2. Perform a change impact

assessment.

This assessment differs from an

organizational readiness assessment in
the sense that it looks more closely at the
tangible changes that will hit the existing
organizational structure. It digs deeper
into the departments, teams, and
individual roles and responsibilities that
will evolve because of the transformation.
This step is imperative to the overarching
digital strategy as it plays into mapping
out the new processes that come with a
transformation, and ultimately the
software that will best help our
organizations fulfill those new processes.
By understanding how jobs will be
impacted and what new roles will look like
with new technology, a natural sense of
alignment and buy-in is born. When
people are in the loop, they feel like they
are a part of the change. When there is
inconsistency or a lack of transparency,
the opposite is true, and resistance takes
the lead. Those who will be impacted by a
given change need to understand how
their roles will be redefined, how teams
will work together, and how their relevant
organizational structure will shift. This
information will help craft communication
and training plans to better prepare
people for the changes to come.

3. Assess and ensure internal

alignment.

Alignment on the trajectory of the

company needs to be crystal clear. From
executives down to mid-level
management, everyone needs to be
moving at the same stroke toward the
same future state. If the mission and
journey are clearly outlined, all sails will
point in the same direction. Are we looking
to make quantum leap changes in our
operations, or are we simply trying to
improve efficiencies? Are we trying to
increase revenue by cutting costs or
driving more sales? Our organizational
assessment in step one will help identify
these slight nuances, but it’s integral that
a third party is introduced to address any
potential misalignment. Hire an
independent consultant that can assess
the team’s greater perceptions and
identify any silos in alignment. If they
identify silos, it’s best that a third party
addresses them to help get everyone on
the same page without ruffled feathers.

4. Assemble your change team

There should be a team of people

that spearhead all change management
efforts – the change team. This should be
an internal group of employees that leads
all communication, training, and strategic
change management efforts. Yes, external
resources can also be used here, but be
careful. A system integrator will sell
themselves on the fact that they can also
assist with change management. Don’t fall
for it. A system integrator’s focus is on
how to enable new technologies, they are
not focused on change and the internal
team. Again, that’s like a plumber coming
in to tell us that they can also do dry
walling. It just doesn’t work that way. The
best external resource available to support
the change team would be a technology-
agnostic consultant. This is especially true
if no one on the internal change team has
experience with change management.
Another thing to note is that
stakeholders should be spread out across
different focuses of the digital
transformation. Although we have a
change team that’s particularly
responsible for change management, the
best approach to a successful operational
change management strategy is to share
the weight. The change team will
spearhead most of the work, but everyone
on the project team should have some
type of change management
responsibility. Consider looking further
beyond a designated project and change
team and bring on influencers within the
organization to help the cause. Train the
influencers before the general team, and
they will act as a dedicated resource for
their more granular teams and peers. With
this approach, everyone on the project
team will have skin in the game and know
who to go to with any questions,
improving the odds of implementing a
more successful operational change
management strategy.

5. Create your change strategy.

This is it. Once we’ve checked off

the first four steps, it’s time to use the
information we’ve acquired and the teams
we’ve created to craft our overall change
management strategy. As we map out this
plan, we must keep in mind that there is
no such thing as an out-of-the-box, cookie-
cutter change management strategy.
There is no silver bullet in alleviating
change struggles for a company or a
team. Each strategy needs to be tailored
to the unique characteristics of the
company, such as its culture, its projected
resistance, its alignment status, and its
overall attitude toward change.
Change management consists
primarily of two components –
communication and training. With that
said, each of these components consists
of multiple tactics that must be adhered to
to drive an effective change strategy.
Let’s, break down how we formulate
change strategy and plan our
communication and training initiatives.

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.

Why are we communicating?

This question will be answered the
same every time. All communications that
go out to the organization need to be
spoken through the lens of what’s in it for
me. The person on the other end of the
communication needs to understand how
this will impact them specifically. It’s
important to make sure we’re not only
focusing on project-specific information.
Communicate milestones and what’s next
in the project through a targeted approach
for each group in the organization. Think
of how different teams and departments
will be impacted, as that will likely shift
communications from group to group. Be
intentional and tailor communications to
address any resistance that may have
been identified during the organizational
assessment.
Again, it’s important to share how
the new process and technology will
enable the company to reach its goals, but
that is never going to be the main
message. The main message must revolve
around how the individual's role will
become easier in some way or another.
Think about how the new way of operating
will bring less stress to their day-to-day
life by alleviating pain points they may
have dealt with in the past. When we
approach communications from this angle,
resistance will dwindle and buy-in will
increase.

How will we communicate?

Some people check their email
consistently. Some may communicate
more effectively via phone or video calls.
Others may take more kindly to live, in-
person interactions, or maybe on-demand
content that they can refer to when they
have time. Create a diverse
communication plan that lays out
messages through various communication
channels. When creating a communication
plan, incorporate email as a baseline, and
sprinkle in seminars. Put up flyers around
the office that outline the benefits of the
change, almost like an advertisement for
the new normal to come. Schedule
ongoing webinars and conference calls
and encourage mid-level management to
facilitate meetings. An organizational
assessment should identify the preferred
means of communication by the greater
team, so utilize that information when
determining where to focus
communication efforts. No matter the
communication medium, the goal should
be to deliver a uniform message crafted
around the ‘why’.
What?

While crafting a communication

plan, it doesn’t hurt to draft what each
communication looks like across the
different phases of the project. Create a
timeline of communications that will be
followed as the project progresses. If we
stay flexible in our communications and
add or adjust messaging as the nature of
the project changes, we will benefit from
planning the specific messaging in
advance.

The anatomy of a communication

plan should always enable a two-way
conversation. In addition to sharing
information on the new technology, it’s
critical to get information from the
recipients of the change as well. Gauge
how people are responding by keeping a
supervised forum for people to discuss
concerns and ideas anonymously. Enable
question-and-answer sessions to answer
open-ended questions as the change
approaches. When a two-way
conversation is enabled, people feel more
a part of the shift rather than a byproduct
of the shift.
Listening is critical to the success of
a digital transformation. The perspective
of a project team is often completely
wrong when they are assessing the
strengths and weaknesses of the front
lines. Those sitting in an ivory tower do
not know the intricacies of a given
warehouse role. They do not fully grasp
the bottlenecks and friction points of a
manufacturing line. If we are sitting in a
conference room laying out what a
business process should entail, but the
people who really know how processes
work (those on the floor) are not in the
room, there will be holes in the outlined
process. Rather than asking what they
think of a process change, get into the
weeds with them. Layout the new
proposed process and ask them how it
compares to the old process. Ask them
how they think their job will be impacted
by the given process change. The goal is
to understand the full scope of their
feedback, and that can be done by
creating formal and informal feedback
centers for frontline workers to share their
perspectives.
On the other end of the two-way
communication plan, it’s critical to
understand our audience. A lot of
organizations have people working on
shop floors or in the warehouse, so it
requires a bit of creativity in how to get a
hold of them. These workers are not
checking emails, and they’re unlikely to
get on a conference call. Sometimes, we
must climb out of our ivory tower and find
a different way to communicate. At the
end of the day, these people are the ones
who have the most power in the success
or failure of a new process or technology
implementation.
Communicating anticipated
changes in roles and responsibilities could
be something that ignites fear and
resistance in those very people who hold
the power to make things work. It can be a
scary conversation for people on both
ends of the communication. So, how do
we broach it? First, it’s important to fully
recognize and appreciate how things are
in their current state. Many people jump
ahead to talking about the company’s
future state – the mission and vision for
the future and the goals and objectives
that sparked the change. However, the
business, as it is today, was built around
the existing processes and culture. Once
we understand and embrace the current
state of business in our messaging and
general digital transformation, we can
paint a better picture of where the
company plans to go in five to ten years.

Now that we know the foundational

elements to a communication plan, let’s
look at an example of a large gas and
electric firm. This industry has always
dealt with constantly shifting regulations
as the political climate changed over time.
These shifts in the industry environment
led to a need for change that would push
the company to a more modernized state.
On one hand, they had a vision for the
future of where they wanted to be, but on
the other hand, they had a very tenured
team of employees who had been there
for years and were hesitant to change.
If this was our company’s landscape
for a digital transformation, we would
need to create a detailed plan with people
in the organization that would outline all
communication efforts. We would involve
different stakeholders, from executives to
frontline employees, to help dial in on the
entire transformation. Once we mapped
out our general digital transformation
plan, we would begin our communication
efforts. We can follow this step-by-step
approach when developing a
communication plan.

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.

Another key element to crafting a

sound communication plan is to be aware
of the red flags that point to faulty
communications. When objectively looking
at a communication plan, it’s important to
keep an eye out for certain warning signs.
This is such a pivotal component of our
overarching strategy that if there is even a
whiff of subpar communication efforts
from the project and/or change team, then
it needs to be addressed immediately. The
red flags to look for may include the
following:

- A project team does not fully

understand the level of awareness
across the rest of the organization.
- Focusing solely on project updates.
- Project communication teams that
focus too much on project updates
only.
- Communications around solely how the
company will benefit and grow from
the new changes.

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.

It’s easy to get caught up in the

training portion of a change plan but
understand that this is truly the easiest
part. Don’t get too caught up on this
portion. Simply schedule the training and
move along. Focus more on the processes
and the people before focusing on how to
operate new technology. Let the strategy
lead the technology, the training, and the
communications.
At the end of the day, 95% of
people want to change. Employees only
start to resist when they don’t fully
understand what a change means for
them. By integrating these tactics into our
organizational change management
strategy, we will open the door for great
technologies and new processes that
could launch our operations into orbit.
Chapter 17 | Next Steps: Developing
an Organizational Change Plan

Let’s take a reflective look at our

organization, specifically. This chapter will
provide the framework needed to perform
an organizational assessment of the
People side of our business that will funnel
into our overarching digital strategy. This
assessment should capture information
about peoples’ communication
preferences, their motivations, their
current trust in leadership, and their
appetite for change.
It’s more than email
communications. It’s more than trainings
held once a week. It’s more than just
sharing information. We need to peel back
the layers of each chapter as it relates to
our business and formulate a strategy. To
get started on your organizational change
management strategy, follow these steps:
Step 1 | Facilitate a survey to assess
the organization's appetite for
change.

Create and facilitate an online survey to

uncover some of the root causes of
resistance that may occur. The survey
should:
● Allow surveyors to answer questions
anonymously.
● Take about 10-15 minutes to complete.
● Be structured to uncover possible
resistance in a quantitative way (this is
the overarching goal of the
assessment). For example, ask pointed
questions to gauge trust in leadership,
motivations for performance, and
belief levels in company mission
statements.

Step 2 | Define qualitative and

quantitative data that points to
resistance.
Create focus groups to define the
qualitative reasons behind the
quantitative data of resistance found in
the survey. Who is resistant to change?
Why are they resistant? What are the
attributes of their current comfort zones?
What do they like about their job, and
what are they proud of?

Step 3 | Craft communications.

Take this information and map out a

content-based communication strategy.
What are we going to say to people, and
when? Outline the message first, then
schedule it.

Step 4 | Evolve communications into

various mediums.

Once we have the message or messages,

create a communication timeline that
includes the various channels of
communication we will use to deliver our
different messages. Repurpose the same
message into different delivery methods
such as:

● Video Conferences
● Live Meetings
● Phone Conferences
● Video
● Email
● Events
● Flyers

Step 5 | Map out training efforts.

Plan out a training timeline and define

strategies our team will use to facilitate
those pieces of training. Keep the
following in mind:

● Once we select a software and begin

getting acquainted, select influencers
and subject matter experts to include
in the first wave of trainings.
● Once the influencers and subject
matter experts are trained, enable
 them to lead their peers in adopting
the new processes and technologies.
○ General trainings begin thereafter
and should be held in various
formats such as seminars, live
coaching sessions, videos, or text.

Step 6 | Define a change management

sustainability plan.

Just because it seems everyone is

excited to implement new technology and
everything seems to be going well, it
doesn’t mean our change management
efforts can stop. Continuously check in
with mid-level managers and the greater
team to gauge the success rate of the
adoption of the new processes and
technology. Consider the following:

● Is there anyone struggling?

● Is anyone using their old spreadsheet
on the side, or reverting to old
processes?
● Take satisfaction surveys.
From here, create a plan for those who
may not be fully onboard and reward
those who have fully embraced the new
changes.

Throughout the journey in building

a future state, never forget that the
people factor is the most important
element to seeing success in any digital
and corporate strategy. The support we
provide to our employees on their journey
is pivotal to the success of our
overarching transformation. If there is any
section to come back to or do more
research on, let it be the art of managing
change in people.
PART III | Technology
Chapter 18 | The Launching Pad

From the inception of server-based

enterprise resource planning to the
countless cloud solutions available on the
market, the journey of advancing
technology has been one that has forever
changed the way companies operate. It’s
incredible looking at where the world of
enterprise technology began and what it
has become. Today’s world of best-of-
breed options and full-scope ERP solutions
stand on the shoulders of the founding
fathers of enterprise technology, and it’s
evolved rather quickly within the past few
decades.
It was in the 1960s when the
concept of utilizing a system to manage
processes came to fruition. As a joint
effort between a large construction
machinery manufacturer and IBM, the
venture to create software that would help
in the manufacturing process commenced.
This project led to the creation of a
software known as Materials Requirements
Planning, or an MRP software.
As time went on, MRP systems
helped plan raw material requirements for
manufacturing, purchasing, and delivery.
The system caught wind in the 1970s and
led to new developments in the years to
come. It was in 1972 that the firm, SAP,
launched in Germany. SAP, short for
Systemanalyse Programmentwicklung,
which translates to System Analysis
Program Development, was an absolute
breakthrough in a world of punch cards.
They developed the world’s first, real-time
computing software that could collect and
process data. A year later, in 1973, SAP
launched its first financial accounting
system that opened the door for more
focused software developments to hit the
market.[3]
In 1977, both JD Edwards and
Oracle were born. One by one, the big
players entered the market, offering
business solutions to organizations locally.
As the companies grew, they began to
provide services to both domestic and
international organizations. It began with
on-premise solutions that ran off of
company servers. This novel approach at
the time improved efficiency and data
management enabling companies to grow
further within each industry that
leveraged them. With more tech-induced
opportunities, society slowly advanced
further and further as a result.
Of course, systems such as SAP and
Oracle had hefty server requirements,
meaning that only the big-hitters and
larger organizations had access to utilizing
enterprise software at that point. It wasn’t
until the 1990s when the term ‘ERP’ first
came to light and automating more
focused business functions such as
engineering, finance, accounting, HR, and
project management began. It was barely
just a decade later that NetSuite paved
the way for cloud-based ERP systems.
NetSuite became the first company to
provide business application solutions
over the internet, and they started a wave
that has become today’s norm: Cloud
Computing.
It was in the early 2000s that the
consolidations began. The big players
began acquiring the little players. Mergers
and acquisitions within the industry are
still going strong today. Fast forward to the
21st century and all enterprise software is
migrating to the cloud, delivering both full
scope ERP solutions and focused, best of
breed solutions.
The market has become diversified
and nearly overwhelming. With new and
emerging technologies flooding the
innovations of this technology-driven era,
it can be hard to keep up with which
software is the right fit for our
organization. Should we harness the
power of AI and robotics into our
operations, or are we in a position that
would most benefit from a simple upgrade
in our inventory management system?
By understanding the current
landscape of the technology market and
comparing it with where our company’s
existing technology landscape sits, we can
better gauge how much room there is to
grow. It starts with getting a clear clutch
on the current capabilities, skills, and
functionalities of our existing systems. If
we have the bare minimum systems in
place, it will be a much bigger leap to
implement emerging technologies. That’s
not to say it’s not doable, but the change
impact will be much greater, and it will
require a more thorough assessment of all
aspects of our organization’s people,
processes, and technologies.
Dive into the gap. How big is the gap
between where we are today and where
we want to go in regard to the available
technologies on the market? The reality of
digital transformation is that we can’t fully
grasp the potential we hold until we know
where we currently stand. Before we jump
into the technical elements of a digital
strategy, such as software selections and
implementation planning, let’s first start
with the current technology landscape our
organization lives in.
 When it comes to digital
transformation, the main points to
consider are who and what will be up for a
change. Typically, a project will be
initiated to solve a problem or to introduce
a new function within the business. The
usual approach is to understand and
capture the business and systems
requirements and align them to the
business objectives outlined in the
business case. Sounds easy, but it isn’t
always so simple. We must be crystal clear
on which technologies, which processes,
and which people will be affected by the
digital transformation initiative. Often
companies want to throw out the current
state, and dive directly into the future
state (if you’ve been paying attention up
to this point, you know that that is not
going to work). We will get to the future
state at some point, but to get there, we
have to know where we are starting.
In order to get a solid grip on where we
are today, we must perform (you guessed
it) an assessment focused on the IT sector
of our organization. To do this, we must
dial down on three factors that serve as
the foundation to our organization’s
technological capabilities.
1. Systems and Applications
2. System Architecture
3. Data Management
At the end of Part III, I will walk you
through the steps of performing your own
organizational assessment, but here are
some high-level thoughts to let marinade
until we get there.
Systems and Applications
In this part of the assessment, we
will dissect the current systems in place
keeping in mind the context of our general
IT infrastructure. We must gauge the
various aspects of our current digital
model that are working. What processes
are currently being optimized that we
would like to hold on to or mirror in our
future state operating model?
Even in the scenario that we are
overhauling our entire enterprise resource
planning software for a new, cleaner
system, there are likely still components
of the existing model that work well with
current operations. The question becomes,
will those processes stick around as we
evolve to the future state? If the answer is
yes, write those processes and IT
functionalities down, and prioritize them
to stand as a deciding factor throughout
software evaluations.
On the other side of the coin, there
are likely bottlenecks and hurdles in the
current technology that we’re excited to
replace with something more effective and
efficient. We should take inventory of
those needs as well. This will help us build
and improve on some of the best practices
in the marketplace that we have yet to
capitalize on.

System Architecture

When we consider our existing tech

landscape beyond the individual systems,
we see a big web of computers and
software that communicate with each
other. We should evaluate those webs and
become very familiar with our existing
integrations. By understanding how each
system is connected to the next, we’ll be
able to identify synergies and silos that
exist across our current IT landscape.
Just like we took inventory with our
independent applications and systems, we
must take inventory of the way the
applications and systems communicate
with each other. There will be good things
that we’ll want to take with us, such as an
unquestionable connection between two
systems that work closely together. For
example, does our CRM connect with our
accounting software, and if so, what does
that process look like? Maybe it’s the way
that a closed sale translates into revenue
listed on the balance sheet. Maybe it’s a
process that tracks sales rep’s
commissions and funnels them into
payroll. Whatever that process may be, we
must identify it as it relates to our existing
systems so that we can easily transfer
that process into a new system.
In this day and age, functionality is
a must have for a business and that
functionality should stay intact as we
venture toward our future state. In
another instance, we may find that our
CRM is not allowing for specifications to be
included in a new order that is then
passed to manufacturing. Maybe sales
representatives have to update
manufacturing with the specifications of a
new project each time a new client is
closed. This is not sustainable, and it’s a
big opportunity to streamline workflows as
our organization dials in on a new software
solution. In this scenario, the technology
we are looking for would have the
expanded functionality to customize each
sale before it goes to accounting. This
way, accounting gets the full scope of
accurate data points while manufacturing
gets the full scope order details and
customizations straight out of the gate.
Hello, scalability.
 In general, system design is an
important step to execute before jumping
straight into ERP implementation. Our goal
is to map this out just as we mapped out
our processes, and we should understand
the integration points that exist in our
current system architecture. Once we
have that understanding in our back
pocket, it’s time to jump into the
integrations and connections we’d like our
system to have in the future state. What
components of our organization should
speak to each other through the utilization
of technology? Going through this exercise
will allow us to think about how the
components of our business relate to one
another in the grand scheme of things.
Due to the fact that an ERP system
connects to accounting, warehouse
management, logistics, etc., laying out a
system that allows us to quickly
understand the relationship between
these components can be incredibly
valuable.
Data Management
 To take it one step further, we need
to analyze how data flows through these
integration points from system to system.
Siloed operations are the biggest villain
here because they can result in multiple
data sets. Through this assessment, we’ll
be able to get a clear grasp on where the
data currently resides. We’ll be able to dial
in on the one source with the most
accurate data so that the data migration
efforts will be more seamless and efficient.
Many times, organizations need to
do ample pre-work as it relates to
cleansing and scrubbing data to ensure
only accurate data enters the new system.
By addressing this component at the
forefront of a digital transformation, we're
able to knock out two birds with one
stone: assessing our current digital
landscape while also preparing to migrate
to a new landscape.
Once we have a clear vision of
our business strategy and we dial in on
where we want our organization to go, we
begin doubling down on the enterprise
applications that can help us get there.
This is where it can be helpful to look to
the market to see what new modern
technologies could help us take that
quantum leap to get to where our
business wants to go.
There is always an opportunity to
improve, but the reality is there are
always different risk profiles. By looking at
the current state of these three sections of
our IT landscape, we can determine the
next step. We’ll get a glimpse into
whether it makes the most sense to jump
in and make one big change all at once, or
if we should solely focus on improving our
processes and stop there.
It comes down to identifying the
roadmap that makes the most sense for
our organization. No organization should
ever jump on new technology because
they think it’ll solve all their problems. We
must implement technology that we know
will streamline and address efficiencies
that are needed to intentionally grow and
scale.
 Let’s take Joe as an example. Joe
has been tasked with replacing his current
minivan with a new vehicle to help get
him and his family from point A to point B.
He has a big budget, so he runs out and
buys a red Ferrari. Why? Because it not
only satisfies the requirement of going
from point A to point B, but it’ll get him to
point B faster. It also has all the bells and
whistles, and he will look super cool. Bob
at the dealership said it would make him
look like he’ll mean business.
What Joe overlooked was a handful
of other factors outside of said
requirements. His wife and kids that would
also need to ride in the car, the various
car seats he would have to fit in the
backseat, the fact that his local mechanic
has no idea how to do an oil change on a
Ferrari, the daily and weekly errands he
would have to run in this car to keep life
moving at the right pace – the list goes on.
If Joe did an assessment of his
current state to become clearer on what
was and wasn’t working and ultimately
understand the true needs he’d have to
meet, he would have made a better
decision on which car to get. He may have
even found that he just needed new tires
and an oil change on the minivan in order
for it to meet the need. The bottom line is,
Joe didn’t do his due diligence to make the
Ferrari a viable, functional option.
When we begin looking at digital
transformation projects, it’s easy to get
distracted by all the shiny functionalities
that come with the innovative systems on
the market. A higher budget comes with
shinier options and a riskier investment.
Shiny-object syndrome almost always
leads to blurred vision when the vision
isn’t rooted in purpose and strategy. Stay
focused. Don’t get distracted by the bells
and whistles and overlook the assessment
phase of our current landscape, its needs,
and its limits.
Chapter 19 | Visualizing the Future

When I was a kid, I thought that 2020 was the year we

would have flying cars and robots making us breakfast. The
visionaries behind the global tech had different plans.
Although our cars still have wheels, it’s no question about
just how far technology has come within the past 20 years.
As we look at the trajectories of where technology is
headed, we must first be considerate of our organizations’
future state. By discussing both in the same breath, we
enable ourselves to find the best-fit technology that we can
leverage over the next several years without falling behind
as new innovations hit the market.
The technologies we invest in today will likely be with
us over the next five to ten years. During that time,
technology will evolve tenfold. To stay competitive, we want
to select processes and technologies now that will keep our
organization relevant and differentiated even as others
adopt new technologies over the next several years.
In addition to that awareness of constantly evolving
technology comes the vision we paint for ourselves that will
guide us into the future. Yes, maybe technology will unlock
the possibility of robot chefs making breakfast in the
morning over the next five years, but what will our company
be doing? Where will it be in the next five, ten, fifteen
years? What will we be known for? The bridge to getting
there stands on the three pillars of digital transformation:
Processes, people, and technology.
We discussed the concept of our future state in Part I,
but I want to touch on it once more as it relates to the future
state of our in-house technology. In the tech-driven world we
live in today, our enterprise technology (paired with strong
strategies behind our people and processes) has the
potential to differentiate our level of service and our brand.
It’s the efficiencies that come with finding the best fit
software that can unlock doors to a new or refined
competitive edge.
In order to attain that, we must first know what we
want that competitive edge to look like. A company’s future
state translates to a greater vision for the business. For a
company to truly reach its potential, it must understand and
harness its superpowers, envisioning what it would look like
if those superpowers reached their full potential. By dialing
in on the elements of our business that set us apart, we can
more effectively prioritize the capabilities of the future
software that could streamline our journey to our future
state.
So, what are those elements that set our organization
apart from the competition? Do we have stellar customer
service? What about our customer service makes us so
great? Maybe we have the highest quality product on the
market in our industry. If so, what part of the production
process leads to that level of quality?
The first step to the entire digital transformation
process is painting that vivid illustration for our
organization’s leadership team that explains what our
business will be known in five to ten years. It’s our corporate
strategy, it’s point A, the starting point, in all that we do
through our technology initiatives. From there, it takes
drilling down to the processes that make our company
unique and prioritizing those processes as we explore
software options.
When focusing on the technology pillar of our digital
transformation, our attention should be on the technologies
that could best accommodate our prioritized processes – the
processes that set our organization apart from the rest. In
the current digital climate, many companies think that to
stay ahead in their industry, they need to stay ahead in the
technological functionalities of their organization as well.
While there is a level of truth to this, this isn’t always the
case. Going from A to C is a much more manageable journey
than going from A to Z. It’s doable, it will just require a
greater deal of preparation before the actual
implementation begins.
Too often, organizations jump into adopting robotics,
artificial intelligence, and other modern technologies for
their operations when they simply aren’t ready. Just because
these technologies are proving to drive efficiencies and
scalability doesn’t mean it’s the right technology for our
unique operations.
Although emerging technologies such as AI and RPA
are at the forefront of scaling businesses into high-volume
growth, not all organizations are ready to take the plunge.
Many technology innovation journeys fail to meet
expectations when it comes to time and budget. Rarely is
failure a result of technical issues, but rather organizational
issues. Problems with integrating people with the
technology, appropriate data management strategies, and
having clear business processes can all lead to major delays
and cost overruns. Without proper preparation and planning,
even the most sophisticated technology can quickly become
a costly white elephant. This is especially true when it
comes to implementing emerging technologies.
Is our business ready to embrace the new wave of
emerging technologies? We should right size our
organization before we even consider implementing
emerging and modern technologies as a part of our digital
strategy. Here are a handful of hindrances that could be
holding our company back from adopting modern
technologies into our operations.

Poor Data Management

When we notice things like dirty data, a lack of

consensus around where the data is stored, or find repeated
or unmatched data, we know there are issues with the data
structure and how the company is utilizing and strategizing
data management tactics. The problem is, it happens more
often than we think, and the mountains of big data can
easily fly off the rails if there isn't intention put behind it.
A lack of clean data can lead to things like
unanswered insights or even a misunderstanding of
business processes. For example, if we’re going to
implement new software that’s built on automation, we
should make sure the data is actionable to create business
value. Without the storytelling aspect of data, it's just a
bunch of units of information. We also need to understand
where the data is housed and be able to make sense of it.

Ask questions like:

● Is there a data warehouse?

● Are there other systems in which there might be
unmined data, like a financial system, an additional
application, or a CRM system that is not integrated with
our data management structure?
● What are the reporting capabilities around that data?
● How is the data consumed?
● How can we create actionable strategies from the data
we have now?

Any strong operational strategy must have a master

data management plan. It’s important to have a centralized
and organized process around data management before we
look at technologies that utilize it to enhance our processes.
This is the foundational to technology. By doing ensuring our
data is ready for migration, we can ensure that our business
is ready to leap from technology on the market ten years
ago to technology on the market today.

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

It’s important to evaluate our business culture and

understand the infrastructure of our organization. There are
certain factors related to our company culture that will help
us measure our team’s appetite for emerging technologies.

Ask questions like:

● Do you have siloed departments or are there

processes that other departments might not
understand?
● Is there a culture of cross-collaboration within your
organization?
● Will your organization’s culture allow you to take data
from one department and integrate it into another? Will
it allow you to utilize something like AI or predictive
analytics to create strategies?
● Do your people have a misperception of what AI is? Do
they have a “robots take over” approach in creating
fear around their job function?
● Are there any other misperceptions within your
organization around what the technology is used for?
 Each element listed above can create fear and
disruption among our employees when implementing any
new technology, better yet advanced technology, such as AI
and robotics, that has been demonized through pop culture
films and media. Understanding those areas of resistance
will help us craft a strong and strategic organizational
change management strategy that is customized to our
specific team.

Communication

If we have trouble communicating as an organization,

then we should evaluate why there is a breakage. If there is
a lack of trust between leadership and employees, then we
should evaluate the current rhetoric that could be causing
the lack of trust. We should formulate communications that
can patch the hole before embarking on a digital
transformation journey.
Whether it’s a specific employee engagement
platform that manages mass communications or sending
direct emails to each department and team,
communications need to be evaluated and prioritized. If we
don’t have a productive communication strategy in place,
implementing new technology could turn out to be
dangerous. Ultimately, the investment could fall flat without
proper communication strategies that hold up our
overarching organizational change management strategy.
Without a proper plan in place, there will be an inability to
centralize the communications around the project.
A lack of transparency alone has the power to kill our
investment in a digital transformation. If people on our team
are not aware of the plan to integrate emerging technology
in some capacity, we risk a lack of user adoption come go
live. This is especially true if our team is naturally hesitant
toward emerging technologies and doesn’t welcome the
idea of robots making breakfast in the morning.

Organizational Change Management

Having a clear organizational change management,

or OCM, plan is critical to being able to communicate and
identify areas in which the new technology might affect
someone’s experience in the organization, their roles, or
their responsibilities. OCM, or a lack thereof, is the number
one failure point for a rather simple reason: Businesses get
ahead of themselves and implement this new technology,
but they forget the human factor that’s ultimately critical to
successful implementation and user adoption.
It’s easy to overlook the human element of any
emerging technology simply because these new
technologies are so good at doing the tactical elements of
our current jobs. But, if we fall blind to the empathy that
makes up our human DNA, the one piece that no robot or
computer can embody on a genuine level, then we are
destined to lose in the long run. Whether it be the support of
our employee base or the buy-in from our consumers.
People want to interact with people to one extent or
another. Losing sight of that will actually put us at a
disadvantage when it comes to crafting a strong
competitive advantage.

IT Capabilities

Our IT capabilities and systems architecture should

also be a consideration when determining whether or not
emerging technology is the right fit. If our IT team is not
familiar with managing robotics, we either need to hire new
talent or invest in equipping the team to rise to the
occasion. Again, it’s doable, but it will likely take more time,
money, and resources to get to the finish line. The bridge
from A to B only needs a handful of bricks and labor, the
bridge from A to Z needs much more.
As discussed in the previous chapter, our first step
before jumping into any technology, emerging or not, is to
perform an organizational assessment. We should evaluate
where we are today and what our current resources can
handle. If it’s out of the ballpark, we need a thorough plan in
place to help bridge the gap between where we are today
and where we want to be. The greater the leap, the more
resources it’ll take to arrive at the destination.

Today’s business landscape forces us to tie together

our vision for our business and the ample capabilities that
modern technology can bring to the table. The two go hand
in hand. In today’s tech-driven society, one cannot function
without the other. Dialing in on our future state will always
be our first step. From there, we will pair the best fit
technology to speak to the objective set forth to get from
point A to point B… or Z.
It feels like a constant race between technology
companies to create and innovate, and that’s why the
industry is evolving ever so quickly. Who knows? The
computer was originally created for business uses, and it
was years later that it trickled into the consumer market.
The same could be true for artificial intelligence and
robotics. Emerging technologies are a part of the software
selection on the enterprise level today, but one day soon,
we could be eating pancakes made by our very own robot.
Chapter 20 | The Guard Rails
Let’s go back to the parallels between building a
home and spearheading a digital transformation. We can all
agree that the architect who picks up the shovel before
drawing a blueprint will build a subpar home. The home is
bound to have some level of structural issues down the line,
and the floor plan may not be as well thought out as it could
have been. It was rushed. In fact, the average architect
takes about four months in the planning phase before they
submit construction documents and permit applications to
build.[4] Some may take even longer.
It’s a process, and there is no way to cut corners
without compromising the quality of the job. The same is
true for a business that implements new software without a
roadmap. Without a cohesive and detailed plan of action,
there are bound to be holes in the end result. That plan of
action should be outlined, in detail, in the business case.
Many leaders pour too little into their business case,
approaching it as if it’s just a means of getting approval on
a digital transformation project. It’s more than a tool for
approvals. Much more. The reality is that to reach success in
our digital transformation, a business case must be more
than just a pitch deck. When done correctly, it becomes the
bible of our digital transformation project, with scriptures
that will guide us through the good times and the bad.
Beyond that, it can evolve into our greater implementation
plan
When it comes time to make decisions on if we
should bolt on a new application that streamlines specific
parts of our operations more than initially scoped, we will
refer to our business case. When it comes time to make
decisions around changing or adjusting a business process
to fit technology, we will refer to our business case. A
business case acts as our guide, with goals and objectives
framing the decisions we make along the way. If the
decision meets the greater objectives of the digital
transformation, then we should do it. If not, then we
shouldn’t. It’s a way to simplify complex decisions for a
robust project and provide a crutch as we begin investing.
Building (yes building, not writing) a business case is
the perfect opportunity to design an intricate blueprint and
build a plan that not only acts as a means of acquiring
vertical and lateral alignment on the digital strategy but
also as the guard rails to achieving greater project
objectives. It becomes our reference point when big
decisions need to be made. It keeps the entire project team
and executive team in alignment with the end goal of the
transformation. Without it, ‘shiny-object syndrome’ rooted in
each person’s own opinion will begin to take charge, and it
will put our entire investment at risk.
Whatever the reason may be, many people overlook
writing up a business case for an upcoming project. Often, a
business case is created, but it only scratched the surface of
what it can truly be. The reason could range from simply
overlooking the value to the need for new technology being
so strong that justification is not necessary. Regardless of
the reason why people don’t do it, it’s important to
recognize the value a business case can add to a project's
overall success rate.
When it comes to our digital transformation, it’s no
secret that measuring cost vs. benefit when moving to a
new ERP platform is critical to the success of the
investment. Will there be an improvement in operations that
will drive revenue in a way that will make the investment
worth it? These systems are expensive and difficult to
implement. It will likely detract from other focuses, and we
must go into a project like this with that sense of awareness.
On the other side of the coin, the cost of doing nothing can
be even greater than the cost of implementing a new ERP
system.
A solid business case can give leadership confidence
that making the move is a good business decision. It will
outline the projected costs while also showing the precise,
expected outcome at the end. That outcome needs to be
intricately drawn as it will represent the future state of our
operations. It’s this illustration that will guide our decision-
making throughout the digital transformation project.
Whatever falls on our lap, we will use this illustration as the
North Star and move in a way that gets our organization
closer to that future state.
Furthermore, a business case should outline the
specific metrics that will be measured along the way to
ensure the success of the project. To be candid, a majority
of digital transformations fail to deliver on time, on budget,
and on projected business value. To avoid this, we need to
gauge and measure milestone metrics as much as possible
throughout the project.
Oftentimes, when transformations fail or neglect to
deliver the expected results, it's a surprise to the
organization – specifically, the project team and the
executives. In some extreme cases, the negative impact on
operations wasn’t expected or planned for. The key to
avoiding this outcome is to understand why disruptions
happen, how to mitigate their potential impacts, and deploy
KPIs throughout the journey, as well as post-project, to make
sure everything stays on track.
At the end of the day, the overarching goal is to
ensure that the implementation is on time and within
budget. Beyond that, however, comes a need to minimize
operational disruption and maximize potential business
value. There are several KPIs, or key performance indicators,
that can be used to manage and monitor any digital
transformation. With those overarching objectives in mind,
let’s break down a handful of metrics we should always keep
at the forefront of our digital transformation projects.

Implementation Time and Cost

The first, and probably most obvious, is overall

implementation cost and timing. Some key questions may
need to be answered before beginning implementations like,

● Are we hitting the milestones of the company?

● Are we going to go live with new technologies on
time?

The key to mitigating any risk of overruns on budget

and time is to install strong governance and track the
process. This governance will live in the business case. It is
important to establish limits on time and budget by truly
mapping the entire project, from start to finish, and from
OCM to data migration. A lot of organizations don't consider
the magnitude of different workstreams and budgetary line
items within the project plan and strategy. When it’s not
included in the business case, there is no focal point for the
organization to work toward.
Any organization should be able to identify when a
project is drifting off track well before it’s finished. To
identify any drift early on, we must first establish a sound,
targeted timeline and a reasonable targeted budget. Know
that if we fall behind in the timeline, we will likely incur
more fees and charges throughout the project. This will
inevitably push us out of budget. The two go hand in hand.
If the company is 25% through the project but has
spent 50% of the budget, chances are high that the overall
budget will need to be increased. Strong governance and
controls along with regular project status reporting will raise
the red flag on any potential issues sooner than later. This
seems like project management 101, but there's also an art
to understanding digital transformations and anticipating
risks regarding time and cost.

Operational Readiness

Another key KPI is the overall operational readiness of

the organization. Operational readiness is an important part
of understanding how well the business processes and
technologies are aligned before we go live. Assuming the
business processes and requirements in the future state are
defined, there should be a measurement system to quantify
success and identify any breakdowns in business
operations. Consider user acceptance testing and
conference room pilots. It is important to think beyond how
the technology functions and address full business
processes through the different scenarios.
The business plan should outline the intention to test
processes and scenarios that will come up because of the
changes ahead. Of course, before we select the system, we
don’t have a definite grasp on how things will change, but
we will be aware of which processes will be touched and
molded. It will be those processes that need to undergo end-
to-end testing. This will come through business simulations
to test every avenue of operations that have been impacted
by the changes in process or technology. As long as we walk
into it with full awareness and the expectation that certain
things may work while others won’t, we will be more nimble
and ready to pivot as needed to reach orbit.

Organizational Readiness

Like operational readiness, it is also important to

measure organizational readiness. How ready are the people
within the organization and how will changes affect them?
Like operational readiness, there is a need to quantify how
prepared our company and employees are before go-live.
This could be done in several different ways.
One way might be to go through scenarios of user
acceptance testing. Maybe we host conference room pilots.
However, we choose to explore this, it’s key to measure how
well people understand those business processes before
throwing them in the water and expecting them to swim. In
other words, the business processes and the systems may
work from a technical perspective, but we need to ensure
that our employees understand how those processes work.
It is essential to demonstrate some level of competency in
performing those processes within the new system before
going live with the software and risking operational
disruption.
Our business case should include metrics that
measure the percentage of the organization that has been
fully trained and has demonstrated competency in
performing end-to-end business processes in the new
normal. We need to keep a pulse on progress and be able to
easily identify the employees and teams that need more
attention through the transformation project.

Operational Risk

In any high-ticket business investment, it’s foolish to

not measure the risks that come with the pursuit. What
happens if, during go-live, not only are the expected
business benefits not achieved but basic operations are also
disrupted? What is the magnitude of that potential
disruption or deviation from expected benefits? This is
something we likely don't want to measure, but there is a
need to identify and quantify the level of tolerance a
company can handle at any given point of the project.
For example, if a shipping and fulfillment company
goes live with new software, but the orders stop coming
through and shipments cease, their whole business will fall
flat until they can get back up and running. If the orders
can’t be shipped for a certain amount of time, say five days,
they’d have to determine whether that is an acceptable
delay.
Again, if we do everything right during the
transformation and are following best practices throughout,
this becomes less of an issue. Even so, preparing for those
risks and delays is what will keep us afloat when faced with
any type of operational disruption. Thinking through the
potential risks could also help us determine things like
timelines. Let’s take Hershey’s epic ERP failure as an
example. After Hershey’s suffered an SAP ERP failure, the
company was incapable of processing $100 million worth of
Kiss and Jolly Rancher orders, even though it had most of
the inventory in stock.
Hershey’s made a couple of textbook implementation
mistakes in relation to project timing. The first is that they
tried to squeeze a complex ERP implementation project into
an unreasonably short timeline. This sacrificed their due
diligence for the sake of expediency, and it set them up for
ERP implementation trouble straight out the gate.
The second was a scheduling mistake. Hershey’s
timed its cutover during Halloween season – one of their
busiest seasons. It was unreasonable for Hershey’s to
expect that it would be able to meet peak demand when its
employees had not yet been fully trained on the new
systems and workflows. Even in the best-case ERP
implementation scenarios, companies should still expect
performance declines because of the steep learning curves.
The key is to shorten the learning curve and minimize
disruption. Having that expectation in our back pocket will
keep us from experiencing what Hershey’s experienced. Be
aware that there will be a slight (if we do it right) dip in
operations at the time of go-live. The question is, what is a
reasonable dip and what is the plan to get back into shape
once it happens?
Business Value and ROI

The next performance metric to look at is business

value and ROI, or return on investment. It is important to be
thinking about how to maximize business value and get the
full ROI out of the system or systems. An organization can
quantify those expectations in the frame of inventory levels.
We can optimize the system through better planning by
reducing inventory or increasing revenue by a certain
percentage using new sales enablement tools.
These are examples of things that might drive
revenue enhancements, thus driving the ROI of the project.
The question becomes, then, what do we expect the
revenue enhancements to be? In general, it is imperative to
evaluate business benefits and quantify them to ensure
people are held accountable.
By incorporating these high-level metrics into the
business case, we’ll initiate the project from a calculated
and intentional stance. Of course, we could always have
more metrics that are specific to our industry and business,
but these metrics are the non-negotiable elements that we
must incorporate into the business plan. It will not only lay
the groundwork for the digital transformation, but it will also
serve as a tool to acquire full alignment from executives and
the project team, alike.
But what if the business case is questioned, there are
uncertainties around the efficiency measures that were
taken, or leaders don’t agree on the functionality that is
included in the business case? As the instigator of the digital
transformation, the goal should always be alignment before
anything else. To do that, we much go beyond the numbers.
Sometimes, the pushback will come in full force even
when the numbers make sense. It’s a big jump, and the
larger the transformation proposal, the bigger the jump. It’s
natural to experience hesitation, and the wins and losses
alike will always fall heaviest on an executive's shoulders.
They may shy away from risks this big, and it’s actually
quite common. In these cases, it’s time to put on our
visionary hat and showcase a little extra boost to finalize
the approval or alignment of a digital transformation.
Create a strong business case that not only draws
alignment but acts as the differentiator between ERP failure
or reaching the third stage of ERP success, or as I’ve been
calling it, orbit. Consider the following ideas that paint the
picture outside of the ‘hard dollar’ benefits and take a more
visionary approach to speak the same language as other
executives.

Support of Strategic Vision

Most companies have some version of longer-term

visions that align with the overarching corporate strategy –
things like global consolidation and standardization, new
market entry, changes to an acquisition structure, etc. While
it is hard to tie dollars to technology investment on a future
vision that may still be in the making, an appropriate
technology platform could help to pave the way.
Take, for instance, a beverage company considering
future vertical integration of its supply chain. There are
many points to consider and many ways this could look but
having a system that can handle a variety of manufacturing
processes could turn out to be a huge advantage. Outlining
the path that will get the business from its current state to
its future state through the use of technology will not only
make the business case more cohesive, but it could also
speak the love language of the person who needs a bit more
convincing.

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

If we are a publicly traded company, it goes without

saying that others are watching our technology
investments. Some moves can even sway the stock price.
However, even privately held firms may see benefits in the
image that a new system creates. Here are a few scenarios
to consider.

Scenario #1: Credibility

When vendors and customers get word that
technology investment is underway, it may help provide
validation that we are a profitable company and are taking
steps to better business relationships.
 Scenario #2: Valuation

If we are in a position to be acquired, our ERP

technology in place will be a very significant factor in
valuation. We will need to consider the value increase of
newer, more robust software versus the cost savings of a
smaller, more limited solution. It is important to understand
what private equity firms want from digital transformation.
We strongly recommend bringing in experts to help evaluate
this decision and the long vs. short-term benefits of both
directions.

Scenario #3: Acquisition Confidence

If we are considering an acquisition and are in a

competitive bidding situation, technology could be in our
favor. The technology we have in place may help sway a
decision pending impact on the acquired firm.

Scenario #4: User Satisfaction

Users cannot be overlooked as they will ultimately be

the ones that drive the benefit of a new system. Even if we
are not able to show significant ROI on a new system from
an efficiency savings standpoint, replacing an old, unfavored
system with one that has a better user interface or provides
an easier work environment, then this could define a win. It
may also help human resources with hiring younger
workers. This would ultimately drive actual, measurable
benefits in more ways than a monetary ROI.

Typically, the purpose of a business case is to provide

justification for a digital transformation, outlining the details
of the project and ultimately determining the ROI that can
be achieved by moving forward. However, it’s important to
reposition our perspective of what a business case can do. It
can be much more than an initial tool for approval. Aside
from what was discussed above, let's now explore how to
draft a strong business plan.

Make sure your business case is accurate and

realistic.

Understanding the total cost of ownership is key. Look

beyond the quote from prospective software vendors. Will
there be other costs indirectly related to the actual software
integration? Some examples could be backfilling internal
resources, upgrading infrastructure, and hiring a third party
to customize the technology. There is usually so much more
behind the curtain than the original quote we receive. It
takes big-picture thinking to dial in on what it will take to
see success across the board. This is the most important
piece, as it will help us determine a true ROI for our project.

Identify the benefits that will be realized because of

the transformation.

Evaluate what the right technology can do for our

organization. There are incredible benefits that come from
successfully implementing a new ERP system and it’s
important to highlight the true benefits that will be
applicable to our company’s production. If we are in the
manufacturing industry, we could cut costs through
inventory reduction and transparency in everything from
raw materials to production statuses. If we’re looking at
improving sales, the right system could help close more
business and drive top-line revenue growth for the company.
There are also many intangible benefits to integrating
new systems ranging from enhanced customer experience
to increased employee retention due to new transparency
and simplicity across the organization.
Provide project governance through the full
transformation.

This element of a business case is oftentimes the

most overlooked segment, and arguably one of the most
important. Of course, we all will set goals and objectives,
but approaching this piece as a pillar that will aid in future
decision-making is key. At some point during the project, an
executive or other team members may want to alter the
original plan. Their request may be to add a new module or
even customize a segment of the software. If our business
case has well-defined goals and objectives, then it can act
as a guide for business decisions along the way. It can serve
as the map to help the team determine whether the request
will move the needle toward the overarching goals and
objectives of the project.
Companies that utilize a business case often see
more success in their transformations than those that don’t
for this exact reason. It’s easy to get distracted as new
capabilities are discovered as the project progresses. Project
governance acts as a guardrail to keep the project from
getting off course, and a business case can act as a project
governance tool.

Align your Organizational Change Management

strategy with your business case.

The framework set around the project’s goals and

objectives of the project must also outline the organizational
change management strategy for go-live. How will roles be
redesigned to fit the new system? Will there be portions of
the business that will have to reinvent the way they
operate? The areas of impact and the magnitude of
organizational change should be listed in our business case.
Once identified, the business case can act as a roadmap to
implementing specific training and communication plans for
those departments or roles impacted by the changes.

Incorporate a benefits realization plan.

Dialing in on the key metrics stated in the previous

pages will enable the project team to measure the success
of a project. It will help determine the success factors of the
project and be the speedometer for the progress of the
digital transformation. It will also create focus and
accountability within the team, ensuring everyone is doing
their part to support a successful IT transformation.
By tracking hard numbers and data as it relates to
the progression of software implementation, we will be able
to better recognize where we are achieving the benefits and
where we may be falling short post software integration.
Understanding the areas, we are falling short could help
determine the reasoning and, more importantly, the solution
to turn it from red to green.
The good news is that it’s often simple fixes. Many
times, things can be course corrected by providing more
training for a particular workgroup, reconfiguring the
software to fit the need better, or simply cleaning up the
data entering the system. Relatively speaking, these fixes
are daily, small-scale, and easily attainable to help close
open ends of the project. It’s when key processes are not
measured that things get missed and opportunities to
improve are lost.
To summarize, the purpose of a business case is to
outline a plan to achieve benefits associated with an
optimized technology. By building a case that addresses all
three pillars of transformation – people, processes, and
technology – the business case will not only sell the project
to decision-makers, but it will be a means for project
governance that carries the investment through and helps
make a significant, positive impact on the organization.
When we align the numbers, the plan, and the vision
together, we’ll usually have a very compelling case for
change.
Chapter 21 | Top Existing and
Emerging Technologies in the Digital
Era
Each morning we wake up, there are new
breakthroughs and discoveries within the technology
industry. Through this continuous evolution, we will bear
witness to the creation of new, innovative, emerging
technologies and the revamp of existing technologies. When
it comes time to truly consider the best software solutions
for our organization, it’s helpful to have a pulse on what is
out there.
There is a plethora of options to choose from. From
leading ERP systems, such as SAP and Oracle, to best-of-
breed solutions that focus on more specific practices like
human resources, sales, or supply chain management.
There are countless avenues we can go down when it comes
to software selection. So, how do we know which is the best
software for our organization? Well, it depends…
Various ERP software options have distinct strengths,
weaknesses, pros, cons, and tradeoffs. Depending on our
company size, industry, geography, and strategic
objectives, different systems will have different rankings.
Simply put, ERP software can’t be everything to everyone,
so there are inherent tradeoffs depending on the company’s
specific needs.
With this in mind, a good starting point is to review
the top solutions on the market and determine what might
be the best fit. Based on independent experience, research,
and database tracking, the strengths and weaknesses of all
major enterprise systems in the market, my company, Third
Stage Consulting Group, has developed a ranking
methodology that compares general functionality, ease of
adoption, flexibility, integration, average time and cost to
implement, size of customer install base, product maturity,
and a variety of other criteria. Once you put this book down,
you can visit Third Stage Consulting’s website for more
specific product reviews and updated rankings each year.
Until then, let’s walk through the list of the most effective
software solutions out there. It’s important to note that
there is no bias or special interest in listing these software
solutions, but rather a comprehensive knowledge and
experience base with each of these solutions that have
proven to be effective for my previous clients. The following
provides a summary of some of these rankings for a number
of different scenarios.

General Ranking of the Best ERP Software

A high-level ranking is always a good place to start

when beginning software evaluations. This ranking is a
general comparison of all the leading ERP systems in the
market. It’s not segmented by industry, company size,
geography, or any specific business need, so it is a broader
and more general ranking of systems (in no particular
order).

Oracle NetSuite
SAP S/4HANA
Oracle ERP Cloud
Microsoft Dynamics 365
Infor M3 and CloudSuite
Salesforce
Workday
Sage X3
Service Now
IFS

Best ERP Software for Small Business

 Small and mid-size businesses have unique needs
that set them apart from other organizations. For example,
they generally value flexibility and ease of implementation
more so than their larger counterparts. For this reason,
small businesses often find a different set of ERP systems to
be more suitable for their needs (in no particular order).

Odoo
Microsoft Dynamics Business Central
Oracle NetSuite
Deacom
Epicor
QuickBooks
Salesforce / Financial Force
SAP Business One
Priority Software
Sage ERP

Best ERP Software for Large Businesses

Small businesses typically value speed, flexibility,

cost, and other priorities that align with their goals and
objectives. Larger organizations, on the other hand, tend to
value the ability of ERP software to scale, standardize, and
integrate across disparate parts of the business. For this
reason, larger organizations typically pursue very different
short-lists than those of their smaller counterparts.

Organizations such as Fortune 1000 businesses,

multinational corporations, and state and federal
governments are more likely to evaluate a markedly
different short-list of ERP vendors. Below are the most
pursued ERP systems for larger organizations (in no
particular order):
 SAP S/4HANA
Oracle ERP Cloud
Microsoft Dynamics 365 Finance and Operations
Workday
Deltek

Best ERP Software for Manufacturing and

Distribution Businesses

Manufacturers face unique needs and criteria when

evaluating their ERP software options. In addition to
software that can automate their manufacturing shop floors,
manufacturing and distribution businesses typically value
systems that can help with product lifecycle management,
demand forecasting, advanced planning, job costing, and
other differentiating requirements (in no particular order).

IFS
QAD
IQMS
SAP S/4HANA
Oracle ERP Cloud
Microsoft Dynamics 365
Infor CloudSuite
Epicor
Plex Systems
Deacom
Acumatica

Best ERP Software for Government and Non-Profit

Organizations

State, federal, local, and national government

agencies have unique needs as well. Their focus on fund
accounting, budgeting, asset management, and other
functions typically leads them down different paths than
their private company counterparts. The same goes for non-
profits.

DelTek
Netsuite
Oracle PeopleSoft
WorkDay
Oracle ERP Cloud
Sage Intacct
Infor Lawson
SAP S/4HANA
Microsoft Dynamics 365
Unit4

Best ERP Software for Best of Breed Digital

Transformations

Regardless of our industry, organization size, or

geography, it may be that a big, single ERP system is not
the best fit. Instead, we may benefit more from a best-of-
breed ERP system – in other words, pursuing different
technologies for different parts of our business. Human
capital management (HCM) software, customer relationship
management (CRM) software, and supply chain
management (SCM) technologies are some of the most
common best-of-breed options. Here are a few in no
particular order.

Top CRM Systems

HubSpot CRM
Oracle CRM Cloud
SalesForce
Microsoft Dynamics CRM

Top HCM Systems

Workday
 SAO SuccessFactors HCM Suite
Oracle HCM Cloud

Top SCM Systems

Infor CloudSuite or Nexus
Oracle ERP Cloud or SCM Cloud
Plex Systems
Oracle NetSuite

These software solutions are just some of the options

we should consider in our quest to find the best ERP
software for our unique organization. At times, we tend to
get boxed into a corner, thinking that these enterprise
solutions are our only options. The reality is that there are a
lot of newer, emerging technologies that have sprouted in
recent years that could be the best solution for our
organization’s needs.
These emerging technologies may bend and even
break the ideologies that software vendors what to instill.
Big software companies will often try to be everything to
everyone and tell us that we might fail if we go in a different
direction. At the end of the day, we know our needs better
than anyone. As long as we do our due diligence and
understand our corporate vision as it relates to our digital
strategy, we will know which route is best for us.
As we evaluate the bigger, more well-known software
vendors out there, it’s also important to evaluate the
advantages and disadvantages of emerging and customized
software solutions on the market as well. Let's walk through
those options and discuss what our options are outside of
the basic ERP solution.

Emerging Technologies
Hyper-Focused Best of Breed Supply Chain Management
Solutions

For a lot of organizations, SCM is a critical function. In

the early 2020s, supply chain challenges and pitfalls were
exposed as companies navigated manufacturing and
distribution disruptions from the pandemic. With that came
ample learnings and reprioritization of supply chain
management efforts. There has been an uptick in the
adoption of supply chain-focused technologies and a greater
push into automation as it relates to supply chain
functionality.
In the lists of ERP solutions above, we covered a
handful of enterprise technologies that specialize
exclusively in maintaining and managing a supply chain.
However, we can go beyond the typical SCM systems listed
above. There are relatively new, niche systems such as
warehouse management software, procurement systems,
logistics, shipping, and freight management solutions that
organizations are implementing to increase efficiencies
across distinct elements of their operations. Many of these
micro-focused systems can perform at a higher level than a
larger ERP solution that has a supply chain functionality.

Machine Learning and Robotics Process Automation

Machine learning and RPA are different technologies,

but they are similar in the sense that they are leveraged to
automate and predict common or mundane processes that
humans typically perform. Take, for example, invoice
processing. By integrating one of these solutions, we would
be able to automate the process of paying invoices. The
system would sort and pay invoices, flagging any that seem
off or fall out of a distinct pattern.
 Both machine learning and RPA are able to tackle a
simple business process and open up more time for people
to focus on tasks that require a greater need for human
reasoning. There are stand-alone machine learning and RPA
systems on the market, but some of the larger ERP vendors
are beginning to incorporate these technologies as a part of
their overarching service. When evaluating our options, we
should consider what this type of technology can do for our
production levels, as well as for our organization's
scalability.

Business Process Mining Tools

There are tools, like Celonis, for example, that help

define and highlight what is truly happening within business
processes and systems. As discussed in Part I, business
process mining quantifies and analyzes different steps in the
workflow. We can start to identify and quantify where
breakdowns are happening and where there are variations
in a specific process. It delivers quantitative data to
augment that qualitative tribal knowledge that many
organizations have been built upon.

Employee Adoption Tools

Employee adoption tools may be a great investment if
we plan to undergo a digital transformation in the near
future. These technologies are meant to train employees on
business processes and workflows, providing tutorials and
how-to’s as an employee goes from one activity to the next.
Start with the existing software provider and see if they
have an employee adoption tool built into their system.
Some systems have this embedded into their platform to
provide a tutorial or step-by-step guide for a specific user.
There are also independent employee adoption tools that
can be used across various systems.
Open Source and Low Code Software
Open-source software, such as Odoo, uses a common
programming language. With that common programming
language, organizations with an adept IT team can easily
change the software and enable it to do what the
organization needs it to do. On the other side of the coin, we
have low-code software that allows us to change workflows
and user interfaces without having to change the main
source code.
Low code requires less technical competency, and
open-source needs more technical competency. If our
organization has the talent needed to facilitate the technical
capabilities to support it, then open-source systems may be
our best bet.

Custom Development and Application

Although this isn’t necessarily an emerging technology,

it’s an option that many seem to have forgotten still exists.
Organizations may need custom software that they can
often develop in-house. By going this route, the open-ended
areas of existing solutions can be customized by developing
their own applications.
This is especially important if there are specific
differentiators that serve us as a competitive advantage. We
don’t necessarily need to fit in off-the-shelf software, even
though the software vendors on the shelf will tell us
otherwise. Many organizations benefit from having a
custom-fit solution that caters to their distinct needs.
As we begin indulging in the technical aspect of our
digital transformation, it’s helpful to wrap our minds around
the catalog of options we have when it comes to selecting
software. Although there are hundreds of solutions
available, our digital strategy and the work we have done
up to this point will guide us in dialing down on a short-list
of solutions. Once we have a short-list, the entire software
evaluation process becomes much more digestible. The
question remains – how do we build a short-list?
Chapter 22 | Which Software is
Right for You?
I want to take a moment and highlight the fact that
we are nearly at the end of the book, and we are just now
getting started on the tangible implementation of
technology. This is important to be cognizant of. The fact of
the matter is that for a digital transformation to be
successful, most of the work takes place before we even
consider software. Why? Well, it’s simple. The software
selection process is one of the first, tangible steps related to
implementing technology that can make or break our digital
transformation.
There are so many software solutions on the market
that selecting the right one is a daunting challenge without
proper preparation. However, if we know the intricacies of
the company’s needs, wants, prioritized processes, and
cultural nuances, then it becomes much easier to dial in on
the right software selection. We will take everything up to
this point in the book, and we will funnel it into developing a
short-list of viable software solutions that can move the
needle for our organization.
Thorough software evaluations across a short-list of
options are imperative, and it’s important to understand the
overarching capabilities and functionalities of each software
before we marry our operations to one system. Being
thoughtful during each step of the selection process can
make or break our transformation, with each step relying on
the steps before it.

Before comparing software side by side, we need to

have the following checked off our to-do list.
 ● We’ve dialed in on the processes and operations
that need TLC.
● We’ve figured out the people who will be working
on the project and sharing their inputs along the
way.
● We’ve found an executive sponsor for the project.
● We’ve acquired alignment across all executives
and stakeholders.
● We’ve determined where we will turn to ask
clarifying questions on how to optimize the
specifics of a process.
● We’ve outlined the timeline and goals of the
digital transformation project.
● We have aligned those goals with the overarching
mission of the organization.
● We’ve determined the upstream and downstream
effects of the organizational change.
● We clearly understand our competitive landscape
and know what we need to do to become more
competitive.
● We’ve dialed in on the needs vs. wants of our
organization, prioritizing the processes that need
to be improved upon.

Once we can confidently say that we have done all of

these things, we are ready to start shopping for software.
Here, we will create a blueprint of sorts for the hypothetical
implementation of our software and apply the hypothetical
across divisional operations to get an overarching idea of
what implementation will look like. This way, we can both
zoom in and zoom out to see the most minute details in
conjunction with the bigger picture.
There will be areas of focus depending on our type of
organization, and it’s alright to not hit each nail right on the
head. Categorize and prioritize when considering software
— what must go, what could go, and what should stay. Of
course, this doesn’t have to be a firm and set-in-stone plan
for our transformation. Rather, it’s a malleable framework to
guide the process. This is the starting point of the selection
process and is what initially defines our implementation
plan.

Selecting the Best-Fit Software: 4

Milestones of Software Evaluations

1. Become crystal clear on prioritized

processes.

The first thing to do when it comes time to evaluate

systems is to revisit our process. More specifically, we’ll
revisit the Hierarchy of Business Processes we reviewed in
Part I. As a refresher, it’s all about process mapping and
prioritizing our processes by placing them in a hierarchy.
The hierarchy has five levels, with commodity processes
landing at level one and core competencies landing at level
five. Levels two and three are when the type of technology
we leverage starts to matter in regard to keeping the
integrity of our prioritized processes. Let’s revisit this
concept.

Insert Graphic to Show Levels of Processes: Put this in

a shaded box, shade increasing as the levels get higher.
Rank from 1 - 5, with core competencies at a level 5 and
commodity competencies at a level 1. Level 1 is shaded the
lightest, level 5 is shaded the darkest. Color/shade bank on
the right side of the image.

Core Competencies: These are the things that make us

who we are as an organization. It’s why we win against the
competition, what we do well and what we want to continue
to do well.

Examples: Processes that are either customer-facing,

employee experience-based, or product-based. It’s the
things that we tailor and customize to make our
organization unique. Without them, we’d lose our edge
and our brand would fall flat.

Commodity Competencies: These are things like

accounts payable or purchase order processing. It’s what all
organizations must do, and there are similar processes in
place from company to company.

Examples: Processes that don’t need customization

because they’re meant to be generic, and they’re
efficient being so.

When evaluating commodities processes at level one,

nearly all technology can get the job done. Nearly all ERP
solutions will have high-quality accounts payable and
receivables functionalities. They will all be able to pull a
balance sheet. They will all be able to do the rudimentary
tasks that are pertinent to the back-office operations of our
organization. It’s when we get to customer service
processes or production processes that things become more
complex.
While we can defer the processes in level one to the
software, by level five, our processes should be driving the
technology. The core competencies are the most high-
priority and high-value of our processes, and we need to
figure out a way for the technology to support these
processes, not the other way around.
 2. Dial in on a short-list of viable
software solutions.

Once we have the set processes and functionalities

that we want to compare software solutions to, we will have
a laundry list of software to evaluate. The goal here is to
narrow down this long list to a short-list of about six to ten
different software solutions. In order to build a strong short-
list, consider evaluating the following elements of each
software vendor.

● Marketing efforts
● Market reviews
● User feedback
● Substance behind the brand’s messaging

User feedback will vary from company to company.

There will be some people that love it, and there will be
some people that hate it. The key here is to get an idea of
what kind of companies are using what software. It will help
us get a better understanding of which ones would be
applicable to our organization. Keep this step surface level.
If we go as far as to reach out to each and every company
on our long list, we’ll be inundated and overwhelmed with
their follow-up sales team. Poke around the web to find
information independently, and drop vendors with the
lowest ratings and feedback. Take note of the ones that
stand out and move on to the next step.
With six to ten names on our narrowed-down list, it’s
now time to dive deeper. It’s time to investigate. It’s time to
reach out to the software vendor and start digging. Here are
a handful of questions to keep top of mind as we explore
and evaluate the software solutions on our short-list.
 ● How is the customer experience and how do they
handle their customer’s needs?
● When these companies route calls, do they both
answer and have a general understanding of the
questions you’re asking? In other words, is their
customer service team attentive and competent?
● Ask any high-level questions to get more familiar with
the software vendor's brand. What they portray on the
surface will shine a light on what is beneath the hood
and what a potential partnership with them could look
like.
● Ask for scripted demonstrations to make sure your
requirements can be met with their software.

Now, we are getting a clearer picture of which

software vendors we feel drawn to and which ones can take
a back seat. With each step, our list will likely get smaller
and smaller. At this point, we might have three to six
software vendors that we are still considering. Let’s get onto
the next consideration: System architecture.
The key here is understanding integration points
between systems. At this step in the process, all we need to
do when it comes to integration with other systems
currently in use is to familiarize ourselves with exactly which
team members we’ll be working with to integrate the new
technology. We simply need to get ducks in a row to ensure
our team has the background and capabilities to help us
through the transformation once the time comes for
implementation and integration of the new system with the
existing systems. The ticket here is communication. This is
where change management sets into play. All stakeholders,
including those who are managing a separate software
within the company, should be queued in on what’s coming
down the pipeline. No one wants to be blindsided.
The software selection process can be daunting when
we realize just how many solutions there are on the market.
When evaluating software for a digital transformation, it's
important to analyze the strategy required more so than the
ins and outs of the products themselves. A software
selection should also be made with an eye on the future, as
the software will ideally outlast the digital transformation it
was chosen to support. Let's take a hypothetical case study
of a digital transformation.

Case Study: Great & Co. INSERT GRAPHIC - Case Study Icon

Take, for instance, Great & Co., a consumer products

and apparel company. They rake in roughly $1 billion in
annual revenue, they have multiple locations across the
world and their primary growth strategy has been to acquire
smaller companies. As a result, they have a lot of movement
and a ton of "edge systems" that don't function
synergistically. For this reason, their operations are full of
silos.
The independent, best-of-breed systems have been
bubble gum and bandaged together and are unintentionally
creating more manual work, confusion, lost orders,
inaccurate product data, financials, etc. To make matters
worse, this landscape was built upon MS Great Plains, an
ERP solution that is approaching sunset.
Understanding Great & Co.'s best fit software comes
with understanding their overall technology stack, otherwise
known as their system architecture. No matter which road
they take, it will always lead back to technical disruption
due to how their system infrastructure is set up. The fact of
the matter is, if we're going to update an MES, CRM, HCM,
or any other system when operations are at this capacity,
one must consider a full-scope ERP system to do the job
rather than piecing together various best-of-breed systems.
Sure, it may be more painful and expensive to rip and
replace the current technological landscape of the company
in an effort to do it right, but it will be better in the long run.
 Great & Co. is an example of an organization that has
ample work to do in order to prepare for a digital
transformation. They would need to focus on things like
reworking processes, trimming the fat, and reducing internal
product development to be able to streamline, have a
repeatable process across all operations, etc.
Once they are able to clean up and prepare for a
transformation, they need to revisit their overall corporate
strategy to dial in on a successful digital strategy. This will
help them better understand how software can play a role in
achieving their goals.

Alignment in Corporate and Digital Strategy

Great & Co.’s objectives were to gain stability in their

systems and enable further scalability. These objectives
have been ironed out amongst executives, enabling
everyone to be on the same page. It's only with this clear
and distinct goal that they can truly dial in on the best fit
software. Without it, the ample options of software solutions
on the market would pose a different allure, pulling the
organization away from the target operating model they
need in order to reach their future state vision. Great & Co.'s
variable and unique operational factors guided them to land
on the following software short-list:

● Infor
● MS Dynamics
● IFS

Before jumping into product demonstrations, they will

first analyze each software to see which one will be a better
fit in their system architecture to ultimately drive the best
return. A software's ability to provide an ROI is essential in
any software decision and should be considered when
evaluating software solutions. Its ability to provide an ROI
lies in the three pillars of digital strategy: people, processes,
and technology.

● People need to adopt the software with ease.

● Processes need to be streamlined by the people
through technology.
● Technology needs to be a good fit for IT
capabilities and system infrastructure.

All three of these pillars need to be analyzed to

understand the current state, visualized to understand the
future state, and blueprinted to understand how to build the
bridge between the two. This is true through the software
selection process, and really through any other phase
throughout the digital transformation journey. Other factors
such as company size, industry, business model, processes,
etc. also come into play to help make a final decision.

Measure twice, cut once.

Great & Co must allow their team time to do due

diligence upfront. Red flags are ignored many times when
the company is hurtling toward a fast decision. A proper
selection process can take anywhere from six to eight-teen
months depending on the size and scope. The company
must make sure to allow the required time and resources. If
they don’t, they’ll find themselves backtracking to adjust
and fix issues that arise, only to make the project take even
longer.

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.

Great & Co should ask them to further demonstrate

areas where they say, "yes, we can do that." This may
require mini-demonstrations of said functionality, and the
vendor should be willing and able to accommodate. Always
dig deeper than what the sales representative frames up in
their pitch and demonstrations.

What you see is not always what you get.

Project administrators should always ask if the

functionality they are selling or showcasing (whether it be
early in the sales cycle, during demonstrations, etc.) is "out
of the box" or requires customization. Ask as many times as
needed through various stages until the team feels
comfortable that the functionality is or will be there. In
addition, they should ask for details about the time and cost
tied to building out the customizations. There may also be
recurring fees to maintain the integrations that are built to
accommodate those customizations.

Remember that vendors are selling.

Great & Co. should assume positive intent with their

sales representative, but they should also verify everything.
There may be claims made in the sales process that simply
can't be fulfilled by the professional services team. There
have been many companies who have fallen subject to the
professional services team being blind-sided by a request. In
those scenarios, the professional services team will plea
that the functionality was not included or that it is the
customer's responsibility. Once a contract is signed, there's
no going back.

Understand the product road map.

Great & Co. should ask to have someone walk them

through their product roadmap. The company should have a
strong understanding of whether or not what is being
displayed by the vendor is what will actually be deployed on
the date of go-live. Vendors will have their demo
environments, websites, and web videos set up to show all
the bells and whistles functioning at a high level. Again,
they are selling, they are showing the best of the best.
Great & Co must remember that most ERP software does
not come out of the box looking/operating like that. They
must dig deep into their product roadmap and evaluate the
stability of the product over the next several years.

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.

Adding on too early in the process.

Great & Co. must be wary of doing customizations or

buying additional modules too early in the process. They
should learn what is core functionality first and work with
the system for a while before spending more time or money
on additional bells and whistles they may not need right
now. They should have someone keep track throughout so
that they have an idea of additional time and cost that may
not be in the initial quote. The 20% contingency budget
built into these projects should not be spent on things that
could have been accounted for ahead of time.

Request sales back-up.

Great & Co. should ask the vendor to include a

solution architect and professional services/delivery team
resource in the demonstration if possible. This will keep the
sales team honest in terms of what they are promising as
well as bring expertise into the meeting. They will be more
accustomed to speaking to the more nuanced functionality
questions and providing at least general cost, time, and
complexity estimates.

Negotiate.

Great & Co. should know that there is almost always

room to negotiate on price. Based on Third Stage
Consulting’s experience, there are a couple of vendors who
are notorious for not negotiating, which we will not name
here. But we've seen most Tier 1 and Tier 2 ERP vendors
come down by over 30% on the list price for larger projects.
Great & Co should know when fiscal year-end is for
their prospected vendors and try to time negotiations/close
around that time when they are most incentivized to offer
discounts. The end of the quarter can also be a good time
for that as well.

Once we have dialed in on the right solutions, we

must negotiate. Negotiating with a software vendor can
seem intimidating, but it’s important to realize that no
matter who they are, we can and should negotiate. We’ve
been at the table representing clients through negotiations,
and oftentimes even bring in lawyers to help us facilitate
the terms of agreements as well. A few other ways we've
seen customers reduce spending include caps on
maintenance fee increases, extended maintenance and
support time, future options on additional software
purchases, and reduced hourly rates on professional
services. Here are some more tips to ensure we get the best
fit software at a great price.

Tips to consider before making a

software decision.
Get to know the software on a deeper level.

When evaluating ERP systems, the vendor

demonstration process is a complete waste of time. In doing
this for 20-plus years, we found that those demos don’t
necessarily give us an inaccurate picture of what the
software can and can't do. There's almost always a
disconnect between what we see in demos, what products
can actually do, and how those products might actually fit
our organization.
One of the advantages of being a sales
representative for an ERP or HCM software vendor is that
they get advanced versions of software to showcase in a
demonstration. What we see at the demo table is the
premium version of the solution. As a matter of fact, when it
comes to demonstrations, vendors will not show much of
the software at all. Instead, they're showing PowerPoint
screenshots on their local machine. Many times, they're not
even accessing the cloud version of the software.
Sales representatives have several tools at their
disposal that may or may not be reflective of the software
that we’d actually be purchasing. As long as we are
cognizant of that fact, then we will be less likely to fall prey
to the shiny-object syndrome.

The second problem with ERP vendor product demos

is that they're biased. The software sales representative is
speaking through the lens of how great their solutions are
rather than what is truly best for our organization. The
reason? What we buy as a company is directly linked to how
big their wallets become. They want to show all the bells
and whistles, cool functionalities, and the great
advancements that have been made in artificial intelligence
and machine learning.
The process intends to show us what the product can
do and what it can do well so that we buy the most
expensive version of the software. Many times,
organizations don’t need that. It’d be most helpful if
demonstrations showcased what a software cannot do.
That’s arguably the more important part when it comes to
evaluating a software solution. But we all know that is not
the best approach to sales.
Something that is rarely talked about in the vendor
demonstration process is the inconsistent qualifications and
capabilities of the sales representatives themselves.
Occasionally, we'll see products that we know aren't a great
fit for a client, but the sales representative is good at what
they do. They only show the great strengths of the product
and overstate the benefits for that particular organization.
It’s skewed, and if we are not careful, we won’t be able to
see the full picture.
In other cases, we may get a terrible sales
representative who's selling a great product, but they
completely bombed the main demonstration. They're
unprepared and don't understand our business and don't
have configured demos that are specific to our needs. They
end up failing and we could end up passing on a system
that may be a great fit for us. This is a lose/lose for
everybody.
Now, although I just bashed the idea of sitting
through product demonstrations, I’m not suggesting that we
shouldn’t do demos at all. But, if that's our primary focal
point for our evaluation and the number one thing we base
our decision on, we’re making a big mistake.
I would, at best, treat it as one of several data points
we use in evaluating software options and making decisions
on our ERP or HCM product. Look at it this way – the data
points that can be even more beneficial than a demo itself
are things like quantitative ratings of how the system is
actually being used.
Those data points become an objective way to look at
how different systems in the marketplace stack up side-by-
side against our criteria as an organization, all without the
sales spin. Here is the bottom line, it's critical to get past
that sales rhetoric and get quantitative and objective data.
Why do I say that? Not all requirements, needs, and
evaluation criteria are going to be equal, nor should they be
equal.
It is important to prioritize and weigh the different
decision criteria we're going to evaluate so that we can
quickly narrow the field and focus on the most important
criteria for our business, not necessarily what the software
vendor wants to show us.

Here are a few basic considerations to get the most out of a

software demonstration:

● If you are going to sit through demonstrations, try not

to spend too much time on them. Some demonstrations
could go if two to three days for a single ERP system.
That’s too much time.
● If you get to the point where you're wanting demos to
last more than a full day per product, then you're
 getting into analysis paralysis and probably evaluating
things that aren't or shouldn’t be material to your
decision process.
● If you are doing demos, take it with a grain of salt,
limit the time you spend on it, and just use it as one of
many data points in your overall evaluation process.
● If you come out of the demo feeling like the software
can do everything you want it to do, something's
wrong. There is no one-fit solution. There is a best-fit
solution.

In the end, we can use the demo process as a means

to validate that a software vendor is a good fit for us, but do
not only rely on product demonstrations when making a
decision. Remember to poke holes in the product and find
pieces that may not be a good fit as well. This is just as
important as what the system can do and how it can fit our
capabilities and needs. Choose wisely.

Consider the return on investment

When selecting software, we will need to weigh the

cost of implementation and model/system procurement
against the benefits. Now that we are down to just a few
software solutions, we have the pricing and we have the
scope of the functionalities to make a better cost/benefits
comparison. We must now consider the ROI of each solution.
When thinking about implementation, consider the impact
on our hardware and system infrastructure, both
technologically and fiscally. Some other concerns over cost
may include our timeline, data migration, data security, or
the unavoidable fact that the bigger the transformation, the
higher the overall risk.
A digital transformation is often a ‘high risk, high
reward’ scenario. Regardless of how big of a bite we choose
to take, we want to make sure it can be comfortably
attained in our set budget. We don’t want to cut corners, so
we should pay for what we need, and only what we need, by
considering both long-term and short-term implications and
prioritizing what’s important. While working through these
tips and best practices, remember these last and final tips
for evaluating and selecting the best software for our
business and its organizational needs:

● Revisit your digital strategy to ensure that the

software under consideration will deliver on the
greater goals and objectives set forth at the
beginning of the project.
● Match your software to critical requirements and
key differentiators.
● Don’t waste time on non-essential requirements.
● Price is rarely the most important differentiator so
don't let it be the only determining factor.
● Define and validate a business case
● Look for the best fit for software, not the perfect
fit
● Don’t get caught up in “best practices”.
● Don’t overlook a software’s cultural fit within your
organization.
● Prioritize organizational change management to
make sure your team adopts the new software and
new processes with ease.

As companies increasingly look to digital

transformation to help them compete in the modern
economy and improve operational efficiency, dialing in on
the right software selection becomes critical. With so many
options on the market and so much at stake, the process of
selecting the best system to fulfill a business’s unique needs
can be complicated and full of potential failure points.
 Oftentimes, those failure points identify themselves
through the process. If we’ve done everything stated in this
book to the T, then these common red flags likely won’t
appear. If they do, then we need to take a time out, pause,
and reassess. The key to success is having the humility and
agility to course correct.
Whether we’re looking to implement an all-
encompassing ERP system or a focused best-of-breed
system, it’s important to understand the common red flags.
When it comes to the software selection phase of a digital
transformation, these specific red flags will tell us whether
or not we are making the right decision or not. Let these
warning signs be triggers to pause the selection process and
reevaluate what needs to be done to course correct.

Insert Red Flag Graphic

Lack of overall strategy and digital roadmap

Selecting or implementing software can be one of the

most expensive and resource-heavy transformations that a
business goes through. Without a clear digital roadmap of
how the organization will utilize a given software, the
processes around it, and the implementation plan, the
software will not deliver the maximum business value
possible.
It’s important to understand that a digital strategy is
not just an operational strategy. We need to look at the
business from a holistic point of view and understand our
future state operating model in conjunction with our
company culture. What will it take to evolve our processes
and operations from what it is today to what it needs to be
five to ten years from now? The software should help act as
the bridge to get there. The only way to understand which
software will be the best fit is to be a visionary and outline a
thorough digital roadmap described in this book prior to
moving forward with a software selection.
 Going through the process of building and designing a
digital strategy will also showcase the needs and
requirements for a specific software system. It will make the
selection process easier when we take our specific needs
shopping with us to find the matching puzzle piece. As a
reminder, there is no silver-bullet solution. There will never
be one solution that solves every single pain point, so our
decisions need to be led by our prioritized processes.
A cohesive digital roadmap or digital strategy needs
to be in place before we can confidently select software.
This information is going to be a playbook for our potential
software selection and will help ensure we select a system
that fully meets our needs as an organization.

Insert Red Flag Graphic

Trusting vendor best practices.

During the selection process, many software vendors

will come to the table with ‘proven best practices’. It’s
important to have some professional skepticism when
evaluating such best practices. Keep in mind that strategies
should be unique to the organization that is selecting the
software, and what might be a best practice for one
organization may be a nuisance for the next. Falling victim
to these ‘best practices’ will not only cause the organization
to lose ownership of the project, but it will also let the
ecosystem of the software lead the selection rather than
letting the business’s unique needs lead the selection.
There will be multiple ‘best practices’ that meet our
needs as a business or industry. In fact, we can utilize
vendors’ best practices, but it should only be if they align
with our own strategic goals as a business. We should be
intentional about staying true to our own roadmap and
digital strategy, no other vendor knows our organization's
goals and objectives as well as we do. We should own our
project. Simply letting vendors lead the way is going to put
our business at risk and our transformation project in
jeopardy. We’d ultimately be putting the vendor's needs
ahead of our own.

Insert Red Flag Graphic

Lack of key performance indicators or business case
measurement

When we start a software selection process, we

should be very clear on the different key performance
indicators or metrics that we want to measure and see
progress on once the software is implemented. As an
organization, we must ask ourselves the following
questions:

● Is the software giving us what we need as a unique

organization?
● Does the cost-benefit realization make sense?

The key is to unpack what the software is and how it

will address our unique needs. This is a simplistic process
that can often be watered down with new trending
technology or new automation and emerging technologies.
This means that though functions like artificial intelligence,
predictive analytics, and machine learning may be very
important for future state goals, they may not be what our
business needs today. Having a deep understanding of the
needs of the business vs. the wants of the business,
ensuring that the software is achieving those needs and the
spending makes sense for our business case are all critical if
we want to achieve the maximum business value of the
software we choose to invest in.

Insert Red Flag Graphic

Lack of understanding of the total cost of a software
selection investment
 Understanding the total cost of a software system
purchase and implementation is imperative to achieving a
successful digital transformation. The total cost of
ownership of a software system extends far beyond the
main purchase price. Considerations such as database
management, hardware management, implementation
resources, customization services, licensing, software-as-a-
subscription costs, and other aspects need to be outlined
and understood.
Be crystal clear in expectations during the
contracting phase. Engage legal advice and support as
needed. There is such a thing as ERP and software-focused
legal counsel that helps businesses negotiate with the big
software vendors. We never have to take what we get when
it comes to signing a software vendor’s contract. We can
always negotiate.

When it’s all said and done and we’ve dialed in on

which software solution we’d like to implement, it comes
down to expectations. The gap between expectations and
reality needs to be minuscule. To get there, it takes working
with the software vendor and their greater team to ensure
they can deliver on what they sold us. It also takes a deep
sense of ownership in our own project rather than
welcoming strong influence from third parties that may not
be in alignment with our values, culture, and overall
objectives.
One of the biggest reasons organizations find
themselves in litigation due to a failed digital transformation
is the misalignment of what was represented during the
sales process and what is actually happening come go-live.
Other times, there could also be a gap between what the
cost was expected to be and what the cost actually was.
Again, expectation vs. reality.
 By following these recommendations and keeping an
eye out for the common red flags, we will be able to
minimize the gap between expectation and reality. When we
can confidently probe each vendor on the short-list, do our
due diligence, and maintain our independence and
ownership through the process, we’re bound to land on the
best-fit software that will fill the need for our organization.
Chapter 23 | Implementation
Planning
Once the selection of the software is complete, it's
time to piece everything together into an implementation
plan, in other words, a digital transformation execution
strategy. This roadmap will put all the puzzle pieces of our
digital strategy together to create a feasible implementation
action plan. Implementation planning is a critical step in the
process that occurs after software selection but before
designing software and go-live. The more time and money
spent on this segment, the more successful and speedier
the software implementation will be, ultimately reducing the
cost of the overall project.
Once organizations realize their need to implement
new technology, they tend to jump into a digital
transformation without covering their bases before they
begin. Whether the lack of planning is due to an abundance
of excitement or a heavy lenience on the system integrator,
jumping in without a plan for the technical implementation
of the software will often lead to ERP failure. On the
contrary, those who have a full-scope implementation plan
are more likely to optimize their digital transformation and
maximize their ROI through the process.
So, what is an implementation plan? Ultimately, it’s
everything that will get our software implementation from
point A to point B. From building and configuring the
software to fit our system architecture to the organizational
change management tactics and strategies we plan to see
through, an implementation plan should illustrate how we
will proceed with the technical side of our digital
transformation. It’s a more technical view of our timelines,
goals, and governance of the overarching process that was
discussed at a higher level in the business case. In fact, we
can pull from our business case in relevant areas to build a
strong implementation plan.
The key to an effective implementation plan is to
ensure the software vendor's plan is realistic for our
organization. Oftentimes, software vendors, sales
representatives, and system integrators will provide a
proposed project plan that's unrealistic in scope and
timelines. So, before we even dive into our own
implementation planning process, we need to make sure
there is a realistic implementation plan from the technical
software providers as well.
Once we feel confident in what our software vendor
brings to the table, we can begin the process of
implementation planning. As we walk down this path, realize
that this plan is all-encompassing. It holds much more than
process improvement timelines. We must consider elements
and aspects of all three pillars of digital transformation we
have discussed in this book: People, Processes, and
Technology.
That’s right, this is the part where everything we have
covered in this book comes together. What has been
discussed up to this point is now going to be put into
tangible action. Let’s break down what that looks like.

Processes

Process mapping is a key element in creating an

implementation plan. What will our business processes look
like with the new technology we chose during the software
selection process? What is our target operating model?
What is our desired future state and how can technology
help us get there? Now that we have completed The
Hierarchy of Business Processes, we need to, quite literally,
map out how our prioritized, level five processes flow from
start to finish.
Consider what the process flow entails today and how
we want them to flow once the new software is tied in. Once
we have this piece dialed in, we can share the vision with a
system integrator to bring it to fruition. First, we’ll create a
process map and perform a gap analysis to help identify
where technology can bridge the gap from our current
operations to our ideal, target operating model.

Icon: Refer to Part I: Processes, chapter 4 to refresh

on process improvement best practices.

As we evaluate existing processes, brainstorm new

processes, and build a plan to get from one side of the
canyon to the other, we must ask ourselves the following
questions,
● What will our business processes look like with new
technology?
● What is our target operating model?
● What is our desired future state and how can
technology help us get there?
The answers to these three questions must be woven
into the overarching implementation plan. It’s critical that
we have a good sense of how our processes flow from start
to finish, and how we want them to flow with the
implementation of new software.

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.

● Executives should establish the guardrails that will

keep the project aligned with overarching business
goals, from start to finish. If the objectives of the
project are defined from the beginning, it will help keep
the whole executive team and the project team aligned
as key decisions are made throughout the project.

● Executive alignment will need to trickle down to the

rest of the organization through proper internal
communications. There is a lot that goes into executive
alignment, and the risk of misalignment could trickle
down into all aspects of the project if the leaders of the
organization don’t get ahead of the rhetoric.
Communications should start at the beginning of the
digital transformation and focus on how everyone, from
the company as a whole to each person, will benefit
from the change.

Until the alignment is there, we would be better off waiting

on implementation.

Organizational change management is another key

element of our implementation planning efforts. It is both an
art and a science. If we don’t have executive alignment at
the top, fostering adoption and alignment among the troops
becomes next to impossible. While training can be part of
an OCM strategy, we mustn't confuse it with the need for
something more comprehensive. A top-tier executive will
work to continually educate themselves and their team on
the direct correlation between creating fluid and well-
executed change management strategies and ERP success,
simply because they know the impact that change has on
people.
Because each business is unique, organizational
change management initiatives must be tailored and able to
change as needed depending on the needs of each
business. It is, at the core, the act of blending new
technology with living, breathing employees that have
wants, needs, and fears. Therefore, there isn’t one, all-
encompassing solution for change adoption. One size does
not fit all because all employees, team dynamics, and
company cultures are different.
It’s not unusual for an ERP initiative to initially be
viewed as exciting, only to have some individuals succumb
to fear before going live. We’re talking psychology,
management style, educational adeptness, economics, and
a handful of other fields combined to facilitate the
implementation of a new process or technology. It’s much
larger than meets the eye, and it all comes down to how
well we can manage people. To some on our team, change
management will be viewed as unnecessary, kumbaya-like
activities. To others, it will be viewed as necessary activities
to remain competitive as a company. It’s up to us to acquire
buy-in vertically and laterally across the organization, and
that will only come with executive alignment and proper
organizational change management initiatives discussed in
Part II.
The concept of organizational change management is
often overlooked due to its intangible weight. The problem is
that overlooking organizational change management and
failing to plan a change management strategy before
jumping into a digital transformation is what, single-
handedly, throws digital transformations off the rails. We
must have a change management strategy in place before
diving into software implementation just as we have an ERP
strategy in place. These two elements work hand in hand to
make up the bulk of a cohesive implementation plan. The
bottom line is that our team will inevitably resist change. It
doesn’t matter the type of organization. The question is,
how severe is the resistance and where are the pockets of
resistance going to come from? The organizational
readiness assessment will point us to the best-fitting OCM
tactics we should leverage and map out in our
implementation plan. From the organizational readiness
assessment, we will derive a communication plan and a
training plan, and we will align our change management
efforts with the greater initiatives at play. By doing so, we’ll
be able to dial in on the biggest areas of risk that we will be
up against when it comes to employees adapting to or
rejecting the new technology: People.

Icon: Refer to Part II: People to refresh on the

processes needed to create a strong organizational change
management plan.

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?

Be realistic in this evaluation. To be realistic, we must

fully grasp what system architecture entails. System
architecture is one of the keys to digital transformation.
Especially in today’s environment, many businesses
leverage a plethora of technology to optimize operations. If
we think about all the different operations and technology
that businesses need to succeed – CRM for sales, HCM for
human resources, WMS for warehouse management,
robotics on the shop floor, finance – countless technologies
are interwoven together to improve business operations. It’s
the way these systems communicate and function
synergistically that composes our system architecture.
The best way to think about system architecture is a
visual representation of how the different systems in our
organization come together. There are organizations out
there that have upwards of 200+ systems in place, and they
can’t even name all of them. This is especially true with
companies that undergo or have undergone various
mergers and acquisitions over time. Whether we have five
systems or hundreds of systems in place, it’s important to
understand what each system is and how we are currently
bringing them together. Once we understand that, then we
can look at the future state of our system architecture once
a new system is plugged into the formula.

It’s helpful to visualize this on paper. Take, for instance, the

web of systems below.

Insert a graphic of what’s drawn on the whiteboard in this

video. In this version (1.0), only list the following terms in
bubbles

● ERP in the center

● MES
● Business Intelligence
● HCM
● Supply Chain
● CRM

Refer here as an example: https://www.youtube.com/watch?

v=-NMg6yFJrlQ
 It often starts with a core ERP software as the center
point, with smaller, best-of-breed software solutions that are
connected to the core ERP solution. This web could expand
out for miles depending on how many systems our
organization has in place. To keep it simple, we will only look
at a few common systems.
The first step is to look at how each software solution
is integrated into the next. We must outline the system
landscape and touchpoints. Start by connecting each
system that currently speaks to each other.
Next, we must illustrate and highlight what dataflows
are within each system. Let’s start in the sales process. A
deal is closed and now the salesperson is owed a
commission. The commission is captured in the sales
system which will connect back to the ERP system as a
liability of sales commission to that salesperson. As a result
of those commissions, we have something that needs to tie
into payroll. The human capital management system will be
fed that data from the ERP system. If we’re a manufacturing
company, then the ERP system might trigger another step in
the process that starts an order with the MES system.

Insert graphic of what’s drawn on the wwhiteboardin this

video. In this version (1.1), draw a connecting line from the
CRM bubble to the ERP bubble with “1. Close a deal” on the
line.

Refer here as an example: https://www.youtube.com/watch?

v=-NMg6yFJrlQ

In this version (1.2), add onto version 1.1 to connect the

ERP bubble to the HCM bubble, listing “2. Commissions
need to be added to payroll.”

In this version (1.3), add onto version 1.2 to connect the

ERP bubble to the MES bubble, listing “3. Start a production
order.”

Refer here as an example: https://www.youtube.com/watch?

v=-NMg6yFJrlQ

Each line that connects the systems is an integration

point. Each integration point is critical to our new software
implementation. This is one example of how one process
can touch multiple systems. This architecture may look
different between the current state and the future state
depending on how large the digital transformation project is.
It may be as simple as swapping out one of the best-of-
breed systems, or it may be the implementation of a new
ERP system that will need countless new integration points.
If we look at multiple transactions across all the end-to-end
processes of an organization, the diagram can become very
large and complex.
The purpose of mapping out our system architecture
is to understand how data flows between systems. When we
do this, we can determine where the master data resides.
When there are multiple systems, we run the risk of having
mismatched data across each system. The key is to identify
where the source of truth lies. We could decide that the ERP
system is what houses the primary, master data, that feeds
the rest of the systems. This will enable cleaner, more
organized data flow across all our operations.
We are living in the era of big data. Aside from
system architecture, we also need to evaluate the data.
There are countless touchpoints that our systems are
currently grasping, and it’s up to us, or our systems, to draw
the storylines across each dataset. Within that data lies
immense information, each piece leading to a gold mine of
new opportunities that our organization has yet to take
advantage of.
 Think of a digital transformation as an opportunity to
get it right. It’s an opportunity to scrub the data and make
sure whatever is added to the new system is accurate and
effective. To do that, we can either integrate our existing
data or start clean.

This is an important decision to consider. Maybe there

is a middle ground that would best accommodate historical
trends integrated into the system. Whichever route we go,
this decision will play a large role in the integration process.
The upside to migrating existing data to the new
system is that it keeps the door open to consider historical
data and trends. We will have the story of what has
happened over the years, what trends have taken
precedence, and what lessons we have learned from our
past. We will have the story of our organization going back
many years, which can help us see how we have progressed
since we started.
The downside to migrating existing data is that we
will have introduced a significant risk to the integration by
bringing corrupt or dirty data over to a new and fresh
system. If we do decide to migrate existing data, then we
need to clean it and ensure its credibility before the
migration.
On the other hand, we could start completely fresh.
There are pros and cons to this approach as well. The upside
is that this would dramatically simplify the implementation.
We would also minimize the risk of dirty data, inaccurate or
incompatible data, and other problems that could be
created by migrating older data. What is not migrated will
not be considered in the data moving forward. When looking
for historical data, we would have to go back to old records
to find the answers to a question that could have been
answered more seamlessly if the work is done upfront
during the digital transformation.
 Through the process of evaluating how we want to
migrate and manage our data, we will ideally develop a
strong data plan. The reality is that it’s very common for
companies to have issues with data at go-live. Data
migration is a multi-pronged task that needs attentiveness
from every angle to make sure the transfer of data between
systems is seamless. The transfer of data may sound simple
on the surface, but understand that it includes, and is not
limited to, all of the following elements:

Turn into a graphic list:

Data cleansing
Data validation
Data mapping
Data access protocols
Data exports
Security

These elements must be thoughtfully considered and

addressed. In our experience, many companies brush over
these pieces. Many falsely deprioritize the deeper,
subsurface elements of data migration when it’s often one
of the biggest obstacles to an ERP implementation.
Another important element to elaborate on,
especially in today’s landscape of cyber threats, is
cybersecurity. Cybersecurity is an important output from our
system architecture exercise. By outlining our system
architecture in a similar diagram, as shown above, we will
be able to identify how strong our cybersecurity efforts are
around each system, but also between integration points.
We won’t dive too heavily into the world of cybersecurity
here, but it is certainly something that should remain top of
mind and should be accounted for in our implementation
plan. We are living in an era of connectivity. Cyber threats
are at an all-time high, and without intentional protection
around our technology, processes, and people, the risk of a
cyber-attack is much greater.
Let’s get back to system architecture. The diagram
we rummage up will be a map that illustrates the future
state system architecture. This system architecture diagram
will ultimately help inform what our implementation strategy
looks like. It will describe where customizations need to be
made, if any, and any bolt-on functionalities that need to be
tied in. It will outline the further needs of our
implementation planning efforts to make sure we don’t miss
anything through the process. If we are replacing a specific
piece of the puzzle, we will better understand what
integration points and processes will be affected as a result
of the new software implementation. We must figure out
how to roll out the technology, what the sequences are, and
what the priorities are. We also need a plan as we transition
from phase one to phase two and beyond to fully
understand what we are going to do with the interim
systems that are temporarily in place.
Let me elaborate. Say we begin to break down our
implementation plan into two phases. Phase one entails the
replacement of our ERP software while keeping other
systems in place. In phase two, we will replace the supply
chain management system. Through that transition, we
must figure out what we do with that touchpoint in the
meantime. A good solution in this scenario would be to
implement the new ERP software and build an interim
integration point. Once we replace the supply chain
management system, we will have to replace the interim
integration point that was acting as a placeholder through
the process. See the diagram below for this concept
illustration.

In this version (1.4), add onto version 1.3 to connect the

ERP bubble to the SCM bubble, highlighting that connecting
line in a different color or in yellow, whatever looks better.
Refer to the example above.

This diagram will unveil countless plans and

strategies on the technical side of our software
implementation. Use it as a starting point to determine the
tangible action plans that will get our current architecture to
our future architecture.
Once we check off the ERP strategy, the OCM
strategy, and the plan in which we will ensure our IT team is
ready to handle what is coming, it’s time to bring ourselves
down to the reality of any digital transformation. There will
always be inherent risks that come with high capital
projects. No implementation plan is sound unless risk
planning is incorporated into the greater formula. At the end
of the day, we are the ones responsible for the outcome of
our digital transformation, no one else. Not a consultant that
helps us, not the system integrator, and certainly not the
software vendor. We must take charge of our fate by taking
ownership of the ins and outs of the software
implementation. Yes, it’s okay to rely on our system
integrator to configure and build technology to fit the need.
However, nobody knows our company culture, our data, or
our overarching business goals like the leaders within our
own company. We should own it and govern the project,
guiding it to the point that the outcome is what it was
envisioned to be. Nobody else can do that for us.
Make a list of potential risks that come inherently to
the transformation project. Maybe it’s resource constraints,
maybe it’s a timeline, maybe it’s the anticipated resistance
that our team will experience. If we do not identify the
potential risks ahead of time, they will sneak up and throw
our project off balance. To piggyback off risk mitigation, it’s
also a powerful strategy to outline the framework of a few
different implementation plans to compare the level of risks
and pour into the one that best helps move the needle.
Don’t underestimate the correlation of a multi-strategy
approach with ERP success.
When embarking on a digital transformation, there
are a handful of implementation tactics we can choose from.
These methodologies can often conflict with one another,
making it difficult to know which methodology is right for
our company. Whichever implementation plan we choose to
follow, the goal is always to finish on time, on budget, and
with the buy-in of our teams and executives. What might
work well for one business may not work well for another, so
as we evaluate the different implementation methodologies,
we must evaluate them with the eye of our specific
organizational characteristics. Various implementation
methodologies act as the lens through which we look at our
implementation plan. Each method carries its benefits and
downfalls. Let’s talk through the most common ones.

Agile

Agile is an approach that is focused on expediting the

planning phase and instead jumping in with both feet. This
methodology is based on testing and correcting. Even if it’s
just to a few people, this method encourages rolling out a
new process or technology to see where it bends and
breaks, and course correcting along the way. The goal with
Agile is speed and agility. This approach enables the
transformation team to acquire necessary feedback, build
traction, and gain momentum as they implement new
technology.
While this can be a great way to speed up a project and
hit timelines, it can be counterintuitive to the goals
organizations typically have as they walk into a technology
implementation. Many organizations use their digital
transformation to create a standard operating model or
pivot to a new platform that will house new and old
processes. Inherently, there is a conflict between the need
to rapidly deploy technology and having common standard
business processes and sound organizational change
tactics.

Waterfall

This methodology is focused on outlining very

defined, linear, and sequential phases of a project beginning
with design and ending with go-live. With the waterfall
approach, there is ample time spent planning and the
project cannot move forward until each step is completed in
the order it is planned to be completed. This often creates a
sound architectural approach that enables project teams to
cover all their bases. However, the risk of going over budget
or beyond timelines is often most prevalent with this
approach.

Lean Six Sigma

This approach is used across technology and

operations. Lean Six Sigma is focused on clearly defined
business processes, continuous improvement, measurement
of business processes, decreasing waste, and increasing
efficiency. This methodology focuses primarily on business
process management and takes the opposite approach to
Agile. This method also bases success primarily on metrics,
and it values the continuous measurement and incremental
improvement of operations along the way. The goal here is
to become lean by finding the processes that will make
operations the most effective. By optimizing processes and
operational results for an organization, companies can
efficiently drive growth.

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

This is another framework often used for digital

transformation. A Customer Experience focused digital
transformation is very much focused on the customer’s
journey from the moment they come in contact with our
brand to the moment they receive our products or services
rendered. What does it look like for the customer to interact
with our organization? How can we optimize their
experience? To do this correctly may require processes and
procedures that aren’t necessarily efficient in the name of
maximizing the customer’s experience.
For instance, take a company could automate
customer service using an AI chatbot to field complaints and
inquiries. This would save them time, money, and resources
since the company wouldn’t need as many Customer
Service Representatives on the clock. For a company that is
striving to deliver unmatched customer service, they will
likely skip the AI-driven chat box and keep their Customer
Service Representatives on the clock to provide a more
personalized resolution to each customer’s complaint or
inquiry.

In this scenario, elements of our implementation that

touch the front-facing facets of our processes and
technologies may deviate from Lean Six Sigma. Instead,
they may focus on ways to optimize consumer experience,
regardless of any inefficiencies or delays that come with it.
In this situation, it comes down to understanding the pieces
of our business that are the most important to us. How do
we differentiate? That will guide us as we determine the
right methodology or mix of methodologies through our
digital transformation.

Software Methodologies

A software integrator will come to the table with a

recommended implementation plan. They often do not
leverage Lean Six Sigma, nor do they bake in change
management. Their approach will primarily be focused on
acceleration and delivery. This can often result in costing
more time and money down the line. As we set out toward
implementation with a system integrator, it’s critical to trust
ourselves. We know the bare bones of our organizational
needs, we are the ones with full working knowledge of our
company culture, and we know what will work and what will
not work. Rather than blindly accepting what system
integrators tell us, we must understand the
recommendations and add on or pivot to supplement their
proposed methodologies to create a holistic implementation
plan that fits our needs.

We could use certain pieces of each of these

methodologies to formulate the perfect approach for our
company. If we find conflict between different schools of
thought, then we must deviate. There is no one right way or
wrong way to implement new business practices and
technologies. What matters is that it works for our business
and that wecano maintain and optimize our competitive
edge through the change. They say failing to plan is
planning to fail, and it couldn’t be truer than when it comes
to building out a strong implementation plan to help execute
a digital strategy. These considerations should be addressed
in the implementation plan and resolved well before we
start our digital transformation journey. The more work we
do upfront in planning these pieces, the more money and
time we save through the transformation itself.
Chapter 24 | Countdown to Launch
Once the implementation plan is solidified, it's time to
start the design phase. By this point, we are crystal clear
about the future state of our business processes and the
general system architecture we have designed. We have
laid the groundwork and are now preparing to launch into
orbit.

Before we start the countdown, we want to make sure

we address a handful of parallel considerations. One of
those considerations is project governance or making sure
the project controls are in place to ensure that all these
phases are being executed the way they should be. This
should be outlined in our business case, and our business
case will act as the guardrails once we set forth into the
launch phase of our digital transformation.
There is also risk mitigation and risk management.
This is meant to proactively identify risks before they
become a problem so that the organization can mitigate and
address them. Risk mitigation takes a lot of skill and is often
deemed an art. More often than not, medium-sized and
large organizations use outside consultants that specialize
in ERP and enterprise software implementation to perform
risk assessments from an objective point of view. There
needs to be someone that can anticipate what the problems
are before they become real problems that can't be fixed.
Finally, and arguably most importantly, is
organizational change of management. The OCM strategy
crafted earlier in the process runs the entire duration of the
digital transformation project. Change management should
start as early as the software evaluation and selection
process and should continue post-go-live. Let's face it, at
the end of the day, the human element is often the most
difficult component of anything digital.
Once we can confidently say we have these elements
locked in, it’s time to start building and integrating the new
technology into our system. This phase connects the dots
between business needs and technical functionality and it
brings our digital transformation to life. As we stand at the
bridge that connects where we are today to where we are
going, we must do our due diligence as we embark on the
actual implementation and integration of the software we
have selected. It all starts with the build.

Phase #1 | Building

Now that the business processes have been defined

and the software has been conceptually designed through
our systems web, it's time to actually build it. This is where
the technical resources come into play. The humility of
bringing in an outside, third-party technical consultant is
often what sets successful digital transformations apart
from the rest. This third-party consultant will, ideally, start
building the software to meet the specifications defined in
the design phase.
Whether it’s internal or a third party, this is the part
of this process where the system will be integrated into the
existing system architecture. The work will ultimately follow
what has been designed in the web of the system that we
discussed in the previous chapter. There may be different
phases within this greater milestone depending on how
much building, coding, and customizations need to be done.
Oftentimes, when system integrators are the only
third-party assisting in the implementation, they will offer
new and unique customizations, hoping to intrigue us with
shiny-object syndrome. In many cases, it may seem like a
great idea. Heck, the idea may even come from internal
leadership. The reality is that any deviation from the original
plan and scope of work will put the project at risk of going
over timelines or over budget. No matter how great of an
idea a bolt-on functionality or customization may seem, we
must always defer to our project guardrails – the business
case.
When we defer to the business case, we are going
back to the goals and objectives we slated out before we
even selected a software solution. The business case will tell
us whether or not it’s a good idea to chase something
outside of the scope. Simply refer to the goals and
objectives set forth in the business case. If the bolt-on
functionality or customization will help us reach our future
state goals faster or more efficiently and it won’t completely
butcher our budget, then we should do it. If it does not align
with the values and expectations set forth in the business
plan, then maybe it’s something we revisit in the future.
At any rate, this is the most technical element of the
entire digital transformation project, and far too often, it’s
the only element that organizations consider when
implementing new software. Don’t let that be you. This is
one of the last pieces of the puzzle, and it always works best
when the true due diligence has been mapped out and
planned well in advance. When you take the approach of
planning ahead, the “build” phase will be fairly quick and
painless.

Phase #2 | Testing

Once we have built the software and integrated it as

we would like it to operate into our system architecture, it's
time to test it and make sure it works properly. The goal
here should be to break the system. We want to
conceptualize and test the system in various ways to ensure
it’s ready before we go live. To begin, there are a few
different components and iterations of the testing cycle. The
first of that is called unit testing.
 When undergoing unit testing, the focus is primarily
on making sure that the technology itself works. Through
this process, we will evaluate every microcosm and
functionality of the overall technology. We want to make
sure that no codes have been broken through
customizations, confirm configurations across the entire
system, and ensure that data is flowing through the system
correctly. Unit testing ultimately comes down to testing
different elements of the system itself to confirm functioning
prior to moving on to the rest of the testing phases.
Once we can confirm that the system is, in fact,
working correctly, then we move on to integration
testing. This is where the individual pieces of the systems
web are tested. We will explore how each integration of
different systems works with the new software. This is
typically done through end-to-end testing. Going back to the
example of testing an order lifecycle from the moment the
sale is closed to the manufacturing process entails multiple
systems talking to one another. In this scenario, the CRM
would likely transmit data to the ERP system, and the ERP
system would distribute relevant information to the HCM
system for commissions and payroll and to the WMS system
for manufacturing.
In integration testing, we are testing end-to-end
processes through the new system architecture. This
exercise will highlight any areas that need attention and TLC
before moving on to go live. The last thing we want to do is
go live with a new system, only to have a broken integration
somewhere within our system architecture, disrupting our
operations as a whole. Once we have tested various
scenarios, we can move on to user acceptance testing.

Business and user acceptance testing, often called

conference room pilots, are less focused on technology and
more focused on making sure that the business needs are
being addressed. It also explores whether or not the
business processes will work in a way that will tie in all three
pillars of our transformation efforts: People, processes, and
technology. Essentially, this element of testing will be a
business simulation to determine what it would look like to
use this technology within a production setting. This is the
final phase of testing to make sure all looks good and the
kinks are worked out before going live.

Testing is the single, most important element of

preparing for go-live. As we go through each of the phases,
follow these three rules of thumb.

1. Test both functional and nonfunctional scenario

requirements

It’s time to get creative and introduce scenarios that

could cause problems. Again, our goal should be to break
the system and find holes that might come up once our
greater team is utilizing the new software. Make sure to also
test the requirements, system architecture, and really every
corner of the software as best we can.

2. 3x3 Rule

Just like there are three pillars, we will want to test

everything 3 times. Depending on our technical specifics
and requirements, we may need to test more than that. If
our software is to be integrated with another software, those
data flows need to be tested multiple times. Each time we
make a change to the code, we need to test it multiple
times. Yes, this sounds tedious, but this carries the ability to
make or break the success of our digital transformation.

3. Create test environments that mirror the actual

scenarios the system will be utilized for
 By emulating software functions from an end-user
perspective, we will be able to utilize real-life situational
scenarios that the new system will have to accommodate.
This is referred to as behavioral or black-box testing, and it
touches on the user acceptance and functional aspects of
the software. This will surface different types of issues –
unlike white box testing that focuses on code structure,
internal design, etc.

Phase #3 | Go Live

Once various testing iterations are complete, it's time

to go live. Believe it or not, a majority of ERP failures are
due to go-live readiness, or lack thereof. It's time to turn on
the new system and start using it in production. This is
where we will revisit risk mitigation efforts. Before we go
live, we should have a ‘go/no go’ checklist or checkpoint. It's
simply a risk mitigation tool to make sure everything is
ready to go live. After all, once we flip the switch, there is no
going back. Having a checklist to make sure we have
crossed all our T’s and dotted all our I’s will only help as we
launch the new software for the world to see and use for
themselves.
Two scenarios will play out here. Either the project is
going to be successful and production is going to be
seamless, or there is going to be some sort of disruption at
the time of go-live. We're trying to avoid that, so it is
important to have a checkpoint before going live to make
sure the team has worked through, or at least considered,
the risks associated with going live. Once that checkpoint
has been reached, start the drum roll and flip the switch.

Phase #4 | Post Go Live

 The final step in the phase of implementation is post-
go-live. A lot of organizations think they're done once they
hit go live and they simply move on to the next thing. There
are a few reasons why that is not the case. A lot of
organizations crash and burn after launch as a result of the
chaos that ensues due to some level of operational
disruption. No matter what, there is going to be some
degree of instability that happens at launch time. It could be
very minimal and present itself as an opportunity for
optimization, or it could be that our testing wasn’t thorough
enough and that our most in-demand product is on
backorder for months.
No matter where we fall on that spectrum, post-go-
live is often thought of as a stabilization phase. If there are
operational elements that have been disrupted due to faulty
integration points, then it will require all hands on deck,
both internally and externally, to get things back on track.
Simultaneously, we must address the people's side of the
transformation.
People that don't understand the new system or have
trouble in some capacity with the functionality of the system
will need to be trained or retrained until things calm down.
Until people are fully acclimated, then this constant
touchpoint of training and communications needs to
continue.
From there, it comes down to discovering
optimization and business benefits. To reach the targeted
ROI, we need to maximize the functionalities of the new
software. Understandably so, when people get to go-live,
they're so ready to be done with a project and they just
want to move back to their day jobs. The problem is that
looking at all the time and money spent leading up to this
point, it would be foolish to just let it be. We must allocate
some extra time to optimize business benefits and ensure a
positive ROI.
 When a satellite is launched from earth to space, all
stakeholders are trained and prepared for anything. Anyone
who has lived long enough knows that life just doesn’t go
according to plan sometimes. This applies to our software
implementation as well. We can do our due diligence, cover
all our bases, and still run into a hiccup at the time of
rollout. That’s why it’s important to have a contingency plan
in place that acts as our safety net at go-live.
Keep an ongoing plan of how to support the software
beyond just going live. We’ll need to know who to contact in
case we need help, how we will contact them, and at what
point to pull the plug and bring in a third party for help.
Simply being prepared will not only bring ease of mind to
the rollout, but it will help mitigate the ‘deer in headlights’
factor if something were to go wrong.
Chapter 25 | Next Steps: Get
Started on Software Implementation
Implementing new and emerging technology is no
easy feat. With this era’s robust and broad technology
offerings, new software has the power to transform our
business to operate at a higher level than ever before. On
the other hand, it is easy to be overwhelmed by the
complexity that certain software solutions can bring, and it
can be even easier to fail to translate robust technology into
a successful transformation.
Now that we’ve discussed all three pillars of digital
transformation in detail, it’s time to do it yourself. Take
these steps to get started on your digital transformation and
refer to the preceding chapters as needed to refresh
yourself on the best practices and tactics that come with
each step.

Step 1: Develop a realistic view of time and cost.

Unrealistic expectations are some of the biggest

mistakes you can make early on. If your expectations are
misaligned internally, you will end up making poor decisions
later on. For example, organizational change management
is one of the first things to be eliminated from the scope of
work, even though it is one of the most critical success
factors you can invest in. You should avoid putting yourself
in a position where you feel like cutting corners is a good
idea, because it is never a good idea.

● The average software implementation costs three to

five times the investment in software
 ● The average software implementation costs three to
four percent of a company’s annual revenue

These metrics might go up or down based on a

number of complex factors. This initial implementation time
and cost estimate should be refined based on the factors
below.

Step 2: Define a phasing strategy that aligns with

company culture.

Some companies intend for changes to happen

quickly, but then they end up phasing the transformation in
a way that dilutes that intent. Things like availability of
internal resources, willingness to push team members to do
whatever it takes to meet timelines (or not), and risk
tolerance all factor into how appropriate an implementation
strategy might be. An appropriate phasing strategy should
ultimately align with your culture. This alignment is more
important than any decision you can make.

Step 3: Understand the acceptable magnitude of

process changes.

There's no doubt that the right technology will enable

business transformations beyond your wildest expectations.
However, that doesn't mean you should tackle too big of a
change all at once. Instead, it might make more sense to

1. Define how much you’re willing to change in

actuality, not just what sounds good in theory.
2. Ensure that this project vision is consistent with the
corporate strategy and vision.
3. Define an effective global change management
strategy to manage the changes.
 4. Adjust the phasing strategy and project scope as
needed.

Once you have addressed this component, you can shift to

executing, managing change, and ensuring overall
alignment.

Step 4: Develop the internal and external resources

plan.

Offering up sufficient internal resource support is one

of the biggest challenges you will face in your software
implementation. Most companies are resource-constrained,
so pulling the best talent out of daily operations is a real
challenge.

The following steps will help you accomplish these things

1. Define clear roles and responsibilities between the

organization and the system integrator.
2. Define the gaps between the resources needed and
the resources that already exist.
3. Define the appropriate mix between internal and
external roles (including onshore vs. offshore
development resources).
4. Hire the internal and external resources that will
support the project.
5. Adjust the project strategy and plan accordingly.
6. Hire resources to backfill the project team as
needed.

If anything is going to slow down a digital transformation

and cause budgetary overruns, lack of resources is one of
the most likely. An effective resource plan will help mitigate
this risk.
Step 5: Develop an Organizational Change
Management plan.

The organizational changes required to enable a

software implementation will be vast. The reality is that
technology will be much easier to change than people or
business processes. You will need to define an effective
global organizational change management strategy to
enable the overall transformation.

Your change strategy should include:

● Organizational readiness
● Communications
● Organizational design
● Training
● Executive and stakeholder alignment
● Benefits realization
● Workforce transition
● Cultural transformation

An effective organizational change and operational

transition plan is the most important thing you can do to
ensure project success.

Step 5: Define the IT transition strategy and plan.

You can’t forget about your IT department. Even

though this should be a business initiative rather than an IT-
driven initiative, your IT department will be as impacted as
anyone. They will require new skills, physical architectures,
and training to effectively support the project in both the
short and long term.

Here are some of the things that should be addressed as

part of an IT transition plan:
 ● System architecture and integration points
● Application decommissioning plan
● Skills migration and training
● Reporting roles and responsibilities
● Project and post-go-live support processes (help desk
support)
● Longer-term Center of Excellence plans

Remember that this is a group that will manage the

environment long after the software consultants and project
team members are gone. They must be prepared, and the
time to prepare them is during the transformation project,
not after.

Step 6: Build for software sustainability within the

organization.

A digital transformation is a journey, not just a one-off

project with a definitive start and end date. You need to plan
and act accordingly. This should be addressed as part of
your software project quality assurance work stream.
Address this risk by developing and executing a software
Center of Excellence strategy. Gartner describes effective
CoEs as “concentrating existing expertise and resources in a
discipline or capability to attain and sustain world-class
performance and value.”[5]

A center of excellence strategy will ensure that you have

the appropriate factors in place:

● Software-specific knowledge transfer between your

system integrator and internal project resources.
● A clear support plan beyond the digital transformation
project itself.
 ● Better integration between your business operations
and IT staff.
● A clear transition plan for your IT staff.
● A clear upgrade strategy and plan for the future.

If you’re really in digital transformation for the long haul,

then you’ll need to build a sustainable organization to
support that vision.
Chapter 26 | Orbiting in the
Third Stage
The Mars Exploration Rovers were sent to Mars in
2004. Their mission was to acquire data, photos, and other
information that would help NASA decipher the conditions
and history of the planet.[6] Whether it’s a mission to Mars or
a trip to the moon, there are a handful of systems and
practices used to launch a rocket into space. A common
practice is the three-stage-to-orbit launch system.
A rocket is usually built with three, distinct elements
designed to facilitate the launch. This three-stage-to-orbit
launch system is a common practice that enables rockets to
go to the point of orbiting the Earth. The rocket uses three
distinct stages to provide enough power and propulsion to
get the giant, metal spacecraft into orbit. Each stage, or
section, of the rocket, is stacked on top of the last, with the
spacecraft sitting at the top. Come liftoff, each stage uses
its fuel to get it to new heights. Once the first stage
exhausts its fuel supply and is discarded, the second stage
fires. This happens three times, and once the third stage
commences, the spacecraft is in orbit (assuming it doesn’t
come crashing back down to Earth).
Similar to a rocket, there are three stages of digital
transformation. To see success, we must do our due
diligence and leverage the best practices and tactics
discussed in this book. In the first stage, the project is just
getting started. We have selected our software and
implementation begins. In the second stage, the
implementation is complete but is usually only at a fraction
of the expected technical functionality, scope, and benefits.
In the third stage, a cohesive digital and business
transformation is complete. Full technical capabilities are
realized, business processes are optimized, and the
organization is aligned with the future state. Most
importantly, business benefits and a positive return on
investment are realized.
Much like a space rocket launch, the first two stages
are important to get to the third, but optimal heights and
speed aren’t possible until the third stage launches the
fastest and final rocket. The third stage booster can’t be
bogged down by inefficiencies and dead weight. If it is, it’s
at high risk of crashing back down to Earth. Clear best
practices and expertise are required to overcome the
gravitational pull of the current state.
A rocket takes time to design and build before it’s
ready for launch. The design and building phases are the
prework to launch, just as they are in a digital
transformation. The digital strategy we curate through the
practices laid out in this book will act as our blueprint as we
build our rocket for launch. Our digital transformation
execution will follow this blueprint, and the level at which
the blueprint is detailed will determine the level at which we
see success.

We need all three stages, or pillars, to create a strong

blueprint for our digital transformation. Our digital strategy
needs to have equal parts of strategic intentions poured into
our people, processes, and technology. We cannot remove
or skimp on any one of the three pillars. The key is to invest
just as heavily in the people side as we invest in the
processes and technologies.
Everything within each pillar can be customized to fit
our unique organizational needs, however, all three must
amount to the same level of intention, effort, and relative
investment. As each concept within this book is applied to
our organization's digital transformation efforts, think of it in
the framework of our organization's corporate or business
strategy. Think of the entire process as a hierarchy that rolls
into the corporate strategy. Once all three pillars support an
overarching digital strategy that aligns and supports the
corporate strategy, then you’ll be in better shape than most.

Digital Strategy Hierarchy GRAPHIC

Corporate Strategy
^
Digital Strategy
^
Digital Transformation Execution

Now that we know what it takes to secure a strong

digital transformation, let’s look at a company that did it
right. One of our clients at Third Stage Consulting Group
came to us with a need for optimization. They were an
international manufacturing company that was experiencing
silos as a result of the various mergers and acquisitions it
had evolved through. There was a disconnect among their
international offices and they were experiencing bottlenecks
in sharing information that inhibited collaboration across the
organization.
They hired Third Stage Consulting to help them
optimize their digital strategy and ultimately implement a
new ERP system that would solve their problems. Our
consultants performed a thorough organizational
assessment to evaluate their processes, company culture,
and current technological landscape. Through our
assessment, we were able to garner a holistic understanding
of their needs and help them create a digital strategy that
would bridge the silos and drive efficiencies across their
global enterprise.
In collaboration with their leadership team, we went
beyond a simple software recommendation. We were able to
fully dissect their prioritized processes to drive efficiencies
and optimization toward their overarching strategic
corporate goals. They designed and leveraged a strong
organizational change management strategy to help their
global team acclimate to the new processes and procedures
with ease. Each element of the transformation started with
an assessment: An operational assessment for their
processes, an organizational assessment for their people,
and a technical assessment for their technology. All
assessments mirrored the steps and best practices we
discussed together.
As a result of this due diligence, they realized that
they didn’t need half the systems that were being used.
Rather, they were able to consolidate what once was
multiple systems into one, overarching ERP system that
integrated with the other systems already in use. The
outcome was improved efficiencies, optimized
communication and collaboration, and increased revenue.
This organization’s leadership team was in full
alignment from start to finish. They knew where they were
going and why they were going there. They agreed on the
requirements of the software as it related to their processes
and people. As a result, they had a very positive digital
transformation project.
As you begin your digital transformation journey,
promise yourself that you will do your due diligence. Before
jumping into a software implementation of any sort, take the
time to marry your digital strategy to your corporate
strategy. Take the time to process map and identify the gaps
between your current and future state operating model.
Take the time to grasp your company culture. Only then can
you truly find the best fit technology that will launch your
business to the moon.
The goal of any transformation initiative is to get the
organization into a position where it can operate without
friction. When your operations are at a high level and you
can efficiently produce results, your efforts are then pointed
toward improving your brand, service, and product quality.
No longer are you subjected to bottlenecks and
inefficiencies. You gain a competitive advantage. You
improve your company culture. You grow your market share.

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

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]Refer to Eric's suggestion.