Speaker 1: Hi, my name is Eric Kimberling. I am the CEO and founder of 3rd Stage Consulting Group. We are an independent digital transformation HCM and ERP software consulting firm, and I want to chat today about some lessons from 1,000 HCM software implementations. Now the objectives of today's session are to review quickly an understanding of what makes typical implementations fail, identify ways to help get your project back on track, and understand the best practices you can use to make your implementation successful, whether you're implementing workday success factors, any sort of ERP system, any sort of digital transformation, these lessons apply as well. So oftentimes we get the question, how could you have been involved with over 1,000 HCM implementations? In over 20 years of working with teams and clients in a number of different capacities, including hands-on implementation, we've been involved with a number of expert witness cases involving HCM and ERP implementations. We've done a fair share of project recoveries, third-party QA oversight, executive steering committee involvement, and we've been involved with workday success factors and straight HCM implementations, as well as HCM as part of a broader ERP implementation. So we have quite a bit of experience and lessons learned from working with quite a few different HCM implementations over the years. And before we get started, I want to chat briefly about third-stage consulting, who we are and what we do. As I mentioned, we're an independent consulting firm that helps clients through their digital transformation journeys, and that includes HCM, ERP, CRM, any sort of enterprise technology or technologies that they might be going through. And probably the two biggest things about us that are important to note here are, first of all, that we're software and industry and technology agnostic. So we really don't care what type of technology you end up deploying or our clients end up deploying, as long as it's the right fit for them. And then secondly, probably the biggest characteristic or trait that we have as an organization is that we take a business-first mentality to digital transformation. So technology is secondary to the business aspects of these sorts of deployments, at least in the way we approach these projects. We provide a number of different services that run the whole spectrum from digital strategy and software selection all the way through implementation, and that includes implementing all different sorts of ERP systems, HCM systems, CRM, et cetera. We also do quite a bit in the way of expert witness work as well. So when we think about typical implementations and what the problems are with those typical implementations, it's important to look at where most companies fall in their transformations. And when we look at third stage and where the name comes from, it's a rocket analogy, and it's a multi-stage rocket analogy. So at the risk of speaking over my head, not being an aerospace and defense kind of guy or a rocket scientist by any means, but when you look at multi-stage rockets, there's two boosters that get you up to a certain height and speed, and it's that third stage that launches you to that ultimate height and speed you're trying to get to. So the whole time you're fighting gravity, a lot of things can go wrong, but once you get to that third stage, that's where you want to be. And when we look at these types of projects, sticking with that analogy, you have a small subset of companies that fail in that first stage. They choose a software, they start the implementation, but they never really get the project off the ground. Most companies get stuck in the second stage. This is where they get an implementation completed, but it's pretty underwhelming. There's time overruns, budget overruns, they implement partial scope, they don't get the ROI they want, operational disruption, all the stuff that you hear and read about when you think about these types of failures. And then the third stage, on the other hand, is when companies implement and complete as expected their transformations. They finish on time and on budget, the ROI is realized, and they're in a position of being self-sufficient and being able to continuously improve using that digital transformation as a foundation for that future improvement. So our goal here today is to talk about what is it that makes those successful companies reach those third stage, and what is it that makes the failures fail to reach that third stage. So there's seven things that we found in our experience in doing our own implementations with clients, as well as project recoveries, where we've had to come in and clean up someone else's mess, as well as also being involved in project expert witness work, as well, where we get to see the extreme disasters and train wrecks. There's a lot of common themes that we see that separate the successes from the failures. So the first lesson here is that failure can be avoided. It's not a coincidence. These types of projects have common themes when they're successful, and they have common themes that are very different, but common amongst themselves when they are failures. So it's not due to luck. It's important to follow these technology agnostic best practices. There's a number of them, and we'll talk about a number of them here today. And successes are very similar and demonstrate common patterns, as do failures. In fact, it's to the point where when we get involved with a client, we often can tell where the project is headed based on certain decisions that are being made in certain patterns that we see. And the key here is also not to settle for mediocre results in your transformations. The other key factor here is to have a clear digital strategy before you start. You may be looking at Workday as success factors or other sorts of HCM technologies, and you want to make sure that you don't rush into a selection or implementation without first having that longer-term strategy and roadmap defined, not just for the HCM implementation itself and where you want your HR department to be and how you want HCM to enable self-service or other aspects of your transformation, but also tying it to your bigger-picture corporate strategy. How does this enable a bigger-picture corporate strategy, and how can we translate that corporate strategy into transformation objectives that apply specifically to this HCM transformation? And we want to make sure that any short-term decisions we made are done so in the context of a longer-term strategy. And it really provides a good foundation for project governance and a good framework to make decisions when we do have that alignment. The third lesson is to let your business drive the technology, not the other way around. This is not an IT project. Your business process improvements should drive the new technology rather than assuming that best practices or configured off-the-shelf solutions are going to somehow tell you how to run your business, because it won't. These HCM systems, especially the new breed of systems that are coming out, are so flexible that you really do need to have a clear blueprint for where you're headed as an organization and operationally so that you can drive the technology and drive the system integrator and manage the project accordingly. And the digital transformation should also be closely aligned with measurable strategic goals as well. And the fourth lesson in these transformations is to be realistic. Unrealistic expectations are often the root causes of problems later on. When we see failures or project recoveries that we come help clean up, oftentimes we can track a lot of the symptoms and problems that happened later back to the fact that they didn't have realistic expectations around time, cost, resources, just the amount of effort it was going to take to get the job done. And these unrealistic expectations can lead to bad decisions such as to cut organizational change management or training or to spend too little time on your process definition, whatever the case may be. And this applies to your time, your cost, your resources. You want to make sure you're realistic in defining those three things. And with that in mind, you want to take your proposed vendor proposals with a grain of salt because oftentimes they're coming in with an ideal set of assumptions that may or may not be aligned with reality. So you want to make sure that you take your system integrator or vendor proposals as one data point and combine it into an overall program management plan that accounts for all the different assumptions and all the different work streams that happen during these sorts of transformations. The fifth lesson is that implementation is more important than the software selection. We see too many companies that spend too much time and money on their software selections and we'd rather see those companies divert more of their attention to focus on a more successful implementation. If we assume that time and money and resources are limited, it's more important that we have a good implementation, maybe just a mediocre selection process, but a great implementation that's always going to be more successful than a great software selection process with mediocre implementation. And we want to make sure that we're aware or be aware of consultants that drag out the selection process. So too often we see consultants that are paid by the hour so they're incentivized in some ways to take longer to get to a decision or to get to a recommendation or they just simply don't know what they're doing or don't have the right experience or data to be able to make those types of decisions and so that ends up dragging out the selection process. So just be aware of the fact that time and resources are limited and you want to make sure that you're spending enough time on the implementation process itself. We also found that there's no silver bullet. The industry loves to sell the concept of silver bullets, great new technologies, cloud solutions, pre-configured, out-of-the-box, off-the-shelf solutions, ease of implementation, implementation accelerators, all these different things that sound good and it's what we all want to hear but the fact of the matter is there are no silver bullets. There's no quick and easy implementation. So we want to be aware of that industry hype that suggests otherwise. And at the end of the day, transformations are still hard work. The people and processes are much harder than the technology itself so chances are you're going to spend an overwhelming amount of your time on the project on the people and process side of things or at least you should be spending more of your time on that. And if you're not, you're going to eventually and if you're spending too much time on technology up front, you're going to end up paying for it later by spending too much time on people and processes later after which it's going to be very difficult to get things back on track with your project. And then you also want to take your time and control the project tempo. So a lot of companies don't recognize or act as though it's their project and that they control the pace of the project and that applies to your transformation as well. It's your project, you control the pace, you don't want to be rushed into prematurely starting the implementation and it's better, cheaper and faster to get it right the first time rather than rushing into implementation, making a bunch of bad decisions and rushing decisions and overlooking key activities that need to happen. It's a lot cheaper to get that stuff right up front rather than having to come back and clean that up later. We want to understand any conflicting priorities that come out of this, especially when we think about our system integrators. They're incentivized to get you to start as quickly as possible because it benefits them, but you have to look at what's best for your organization, understand that those priorities may not be aligned or probably aren't aligned to be candid. And so we want to focus on the overall transformation and recognize that it takes time. It's not going to happen overnight and there's a lot of effort that goes into it, a lot of planning. So you want to make sure you have your ducks in a row. And we typically advise clients about to embark on an HCM implementation to spend a certain amount of time on the transformation readiness component. Perhaps you've already selected your software, but before you jump into the implementation and start to bring in the army of consultants, it's really important to have that transformation readiness phase. And you can check out my YouTube channel for other videos that describe that transformation readiness framework in a fair amount of detail. And you can also reach out to me if you'd like to contact me to learn more about that. But that's a critical phase of the project that a lot of companies overlook and they jump straight into the implementation, don't control the tempo themselves. And then most importantly, you don't want to forget organizational change management. The people component is the most important and your project will fail without it. And especially as HR practitioners and HCM practitioners, and we deal with people and people issues every day, it's especially important when we're rolling out HCM technologies because people expect more from us within the organization because we are part of the HR group. But also HCM technology in general affects more people. You could argue that HCM technology typically touches either directly or indirectly more people in an organization than an ERP system or CRM or any other sort of digital transformation. So organizational change is extremely critical. And there's a lot of activities that go into org change, whether it's org design, business readiness, change impact, etc. And we have a whole, again, another video on my YouTube channel that that unpacks the whole organizational change framework for ERP and HCM implementations if you'd like to learn more about that. But the bottom line here is organizational change management is critical. You want to make sure that you overinvest in this because I've yet to meet anyone who's thought for a second that they've overinvested. So I would act as though you were going to overinvest in organizational change management because chances are that probably still won't be enough to really do a perfect job for what you need to get done on the people side of the equation. So that's a overview of the 7 to 8 things that we have found to be key lessons in these types of HCM transformations. Here's a quick summary of some of the graphics and those 8 things we chatted through. And if you'd like to learn more about third stages thought leadership, if you like some of the content you hear here, or if you'd like to learn more about change management, HCM implementations, digital transformation in general, go to our website at thirdstage-consulting.com. That's where you can find a lot of that key content. And if you'd like to reach out to me, feel free to contact me. You can reach me via email or cell phone. If you'd like to chat more about your HCM implementation, your digital transformation, regardless of what stage you're in, we're happy to help. Be a sounding board for any questions you might have, or if you just want to bounce around ideas on how to make your project more successful. You can also follow me on Twitter, connect with me on LinkedIn, and visit our website at thirdstage-consulting.com. And I also ask if you're watching this on YouTube to please subscribe to our YouTube channel as well. So I hope you enjoyed this content and hope you have a great day and we will chat with you soon. Thank you.