A failed transformation project can reduce the value of your entire business – here’s how to make sure this doesn’t happen
Many things can go wrong when managing a business transformation project. Sofigate’s Maso Arai and Sanna Suomela list four key principles to help you successfully bring a project to the finish line.
Not long ago, a Finnish listed company failed in an ERP (Enterprise Resource Planning) system upgrade project. The transformation went so badly wrong that the company’s systems came to a complete standstill for a while. Customers’ orders had to be recorded by pen and paper.
As it was a public company, news of the company’s difficulties spread quickly. As a result of the negative publicity, the company’s share price fell.
The company is now embarking on a new transformation project. It is clear that lessons have been learned from the failure and there is no desire to repeat the same mistakes.
Business transformation projects are complex and not easy to manage. However, following a few key principles can ensure that a project is completed successfully – without unpleasant publicity and negative consequences for shareholders and customers.
1. Invest in your organisation’s transformation capability
There are many reasons why a company might consider outsourcing the management of its transformation to consultants. Consultants bring transformation expertise in-house quickly, so the project can get off the ground faster. Business managers may also be attracted by the idea that consultants will reduce the amount of time spent by management on the project.
However, there are problems with outsourcing. When external consultants rather than the company’s own business management manage the change, the company gains little understanding of the change that is taking place or its own core systems and competencies. This is exacerbated by the fact that consultants often use very complex design methods designed for professionals, which further reduces the willingness and ability of management to get involved.
The result is water carried that does not stay in the well. When an organisation’s own capabilities fail to grow, it is forced to call in consultants again the next time changes are made to systems and processes.
It is often better for the company’s management to take responsibility for managing the project itself, rather than external thinking – despite the fact that it would take a little more time. This way, the organisation builds up its own ‘organic transformation capability’, which increases its ability to adapt to rapid change. To help, the company only needs a partner to facilitate the change and help its own people to succeed, rather than leading the change on its behalf.
2. Use simple, visual design methods
Modern design methods allow a company to visualise its business processes and the capabilities it needs, without requiring specific technological or professional design skills to participate. They are also layered, which means that they allow the strategic, operational and tactical aspects to be outlined simultaneously. In other words, business management can outline, for example, the business capabilities required between strategy and cash flow, the processes and systems that support them, the data required, and the active players and their roles at each stage of the planning process.
3. Ensure data quality
Technology is only as smart as the data it uses. Poorly stored and organised or incomplete data makes it difficult to plan transformation and can easily lead to a poor outcome. The first step is to ensure that someone owns the business data – that is, that the collection, storage, and organisation of the data is in a single set of hands, rather than scattered across silos within the company.
4. Focus on people
In transformations, people are often treated like Lego blocks, as indiscriminate objects that can be moved from one place to another. But successful and sustainable transformation requires a genuine commitment from the organisation. This is only possible if people are empowered to be the subjects of their own transformation, active agents who participate in the design of their own and their team’s work, experience revelations, and understand their role in the organisation as a whole and take an active part in it.
Read more:
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Authors
Maso Arai is Head of Project Business at Sofigate’s Transformations unit. He and his team ensure that clients’ strategic goals are translated into tangible results.
Sanna Suomela leads Sofigate’s Transformations business with the aim of transforming the world together with customers one business transformation at a time.
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