Speaker 1: If you were to hire me today to manage your digital transformation, you may wonder, what would I do? What would I do that might be similar or different from what you're planning to do? That's what I want to talk about here today. My name is Eric Kimberling. I'm the CEO of Third Stage Consulting, and we're an independent consulting firm that helps clients throughout the world reach the third stage of success in their digital transformation journeys. And if you were to hire me today to manage your digital transformation, there's a lot of things I would do. And so what I wanted to do today is talk about the things that I would do to get started on a digital transformation to really set the trajectory or the path for success. And the reason this conversation is so important is because the things I would do to start your project or your transformation are the things that will ultimately largely determine whether or not your project is a success or failure. You certainly need to make sure that you execute throughout the entire transformation, but the early steps you take and the early mistakes you make during a digital transformation, even before you really get started, are the things that are going to determine whether you're successful or not. Now before I jump into the list of things I would do to start, let me talk about the things I would not do. One thing I would not do is I would not go out and just start contacting software vendors to see what kind of software they have. Sure, I might go look at the internet. I might talk to people and get some informal research around different options in the marketplace, but I would not go out and start contacting vendors and getting demos and that sort of thing. I also would not reach out to the large system integrators. They're gonna be biased, they're gonna have their own agenda, they've got their partnerships with software vendors, and they're gonna peddle a certain line or a certain product that may or may not align with your strategy. And finally, the last thing I would make sure I absolutely did not do is I would not contact biased parties to figure out what my digital transformation strategy should be. I mentioned a couple biased parties already. Software vendors, system integrators. Those are two very biased parties. Any sort of implementation partner or value-added reseller of software is going to be biased. Most ERP consultants in the space are biased. They focus on one technology, they focus on one sort of deployment. So that's something else I would avoid because that's just noise. That's gonna create biases within my organization, within my decision-making, so instead I would focus on a more objective view of getting started on my digital transformation. So those are the things I would not do, so let's jump into the things that I would do to get started. If you hired me today, one of the first things that I would need to do is understand what your strategy is as an organization. What is it you're trying to become? Where are your growth priorities? What kind of culture are you trying to create? Where are your operational pain points and the operational opportunities for improvements? And just really understanding who you are as an organization today, as well as where you're headed as an organization tomorrow. To be clear, I wouldn't even talk about technology as a first step. I don't really care what systems you do or don't have or what systems you could or should be using. What I care about is what your business is, who you are, and what you're trying to accomplish. Once I understand that, then yes, then we start to drill down into how that overarching strategy as an organization translates into digital transformation strategic comparatives. So for example, if one of your goals is to create a common operating platform across multiple locations throughout the world and you want to have standardized business processes, then I'm probably gonna maybe lean more towards a single ERP deployment and looking at enterprise-wide technologies that can create that common platform. If you are an organization that's really trying to maximize your flexibility, I might do the opposite of that and say let's go look at point solutions or best-of-breed solutions that allow us to accomplish that strategy. So that's just two quick examples of how I would start off by doing these strategic workshops to understand your overarching strategy and translate those into specific digital strategies that will help get the project started on the right direction. And by the way, the reason this is so important is because one of the biggest reasons why transformations fail is because of strategic misalignment. Just like flying an airplane when you have headwinds, the headwinds can get so strong that it slows you way down or in some extreme cases can cause damage or failure. And that's how digital transformations are. We've got to figure out how do we convert those headwinds into tailwinds, and one of the best ways to get those tailwinds is to have strategic alignment. So taking the time up front to get that strategic alignment is gonna save you a lot of time and money and heartburn later on. Once I understood your overall digital strategy and your strategic imperatives as an organization, I would then start to dive into understanding your operations. How do you work today? What's working well? Where are the pain points? What could or should you be doing better? What are some of the things that are blocking you or preventing you from providing a better customer experience or a better employee experience internally? Those are all things that I'd be looking at. And a lot of times in this step in the process, organizations want to avoid talking about the way things are today. Or in other cases, they only want to talk about the way things are today and they don't want to look at the future. And the thing to keep in mind here is that it's important that you do both. You have to look at the way things are today, but also the way things could or should be in the future. And one of the reasons why looking at today's environment in the operational setting is so important is because, one, you need to understand what your strengths are in terms of your competitive advantages and things that make you operationally superior to other organizations or other peers. And on the flip side, you want to understand what those weaknesses are. The things that need to be improved or could be improved with a digital transformation. So really taking the time to understand the operational lay of the land so that you can eventually prioritize what the biggest opportunities for improvement are is critical. And of course, as we're doing this operational assessment, we're doing so through the lens of the strategic alignment that we've already established. So that strategic alignment should provide the foundation and the lens by which we analyze your current business processes so that we can ultimately look at your operational model going forward and what that's going to look like. And continuing with this theme of not jumping ahead to technology, but rather looking at who we are today and where we're headed as an organization, the next thing I would do is a change readiness assessment. So I would work hard to really try to understand what your culture is today, what you're trying to bend your culture to be in the future, and also what the overall change readiness is of the organization. And by change readiness, I don't mean are we ready to go live with new technology today, because we don't even know what the technology is yet. And it also doesn't necessarily mean are people willing to change because they probably are. But the challenge is that change resistance comes later in the process. But instead, we're looking for the indicators that there might be challenges to adopt to change. So we're looking at cultural considerations, we're looking at internal priorities and politics and things that can really get in the way of any sort of transformation. And by the way, every organization has something that adds to the change resistance within the organization. Even if people on the surface are telling you that, yes, we want to change, no, we don't like our old processes, we don't like our old systems, we want something new. That's on the surface. Below the surface, underneath the iceberg, you find that there's other things, there's fear, there's lack of information and other things that contribute to resistance to change. And that's what we want to do is we want to get below the tip of the iceberg and understand where the resistance to change might come from and how ready the organization really is. And we also want to look at how fast the organization can change too. So even if we assume that your people are ready for change, maybe they are and maybe there's not a whole lot of resistance. Some organizations take longer than others to adapt to change, not because they don't want to, but that's just their culture. Maybe they're risk adverse. At the risk of stereotyping, you might have a firm that's an engineering based firm or driven by a lot of financial types, people that are more risk adverse, generally speaking, than others. Or you might have a sales driven organization that's very entrepreneurial and moves very fast. And any sort of structure or discipline that you introduce in that environment might create some tension and might slow down your ability to change. So those are some examples of the landscape you want to understand in terms of change readiness, so that you really understand how long this transformation is really going to take. And just to be clear, the duration and the cost and the risk of your transformation has more to do with your change readiness than it has to do with the technology, which is why I haven't really brought up the word technology yet in this conversation. Once I've completed the foundational aspects of the first three things I've talked about in this video, I would then shift gears and start to look at actual technologies, I would start to evaluate potential alternatives that might best align with what I see in those first three steps that I've taken. So this is where I'd look at either specific technologies, or even if I'm not looking at specific vendors, I'm looking at types of technologies. So for example, I might have a few different options. I might have a single ERP system sort of an option versus a best of breed option. Or I might have a enterprise wide ERP system option versus a supply chain driven sort of option. So there's a lot of different technologies and options you have in the marketplace, so you want to objectively look at what are your options, and what are the pros and cons of each, and how does each one align or misalign with your overall strategic goals and imperatives. So when you're evaluating your alternatives, it's important to understand that you're not going to find any one option that meets with 100% confidence all the strategic criteria that you're trying to accomplish. There's going to be strengths and weaknesses, there is going to be pros and cons, which is why you want to do this exercise objectively. However, you're likely to find one that the organization and all the key stakeholders within your team are going to gravitate toward because it best fits and aligns with who you are as an organization and what some of your strategic goals and imperatives are. Now in addition to looking at the more functional strengths and weaknesses of technology and the different options you have, you also want to look at the implementation time, cost, and risk of deploying each of these options because ultimately that may influence your decision as well. There might be some options that are going to take you longer or introduce a higher risk profile, but they could also introduce you a higher business benefit profile as well. So you have to look at the cost and the benefit of these sorts of decisions and options that you have in front of you. So once you've landed on a general direction you're going to go, generally here is where you can really start to dive into specific software vendors that fit that criteria, that path that you're going down. The next thing I would do if I was running your digital transformation, and I actually might do this in parallel with some of the other activities I already talked about, is to establish project governance for the overall transformation. This is where I'd start to define roles and responsibilities of everyone from your executive steering committee, to your project lead, your core project team, your subject matter experts, and other stakeholders that are going to be required to make the project successful. I would also start to look at empty boxes in your project org chart that you may not know who's going to fill yet, but they're external roles that might be filled by your software vendor, your system integrator, outside third parties like third stage consulting, other firms that might be able to augment your team and provide the expertise you need to make your transformation successful. So I would start defining those roles and responsibilities early on, even if you know you can't fill them right away or aren't ready to fill them right away, because that's going to give you a clear vision of how the project is going to look, and also just as importantly, it also defines what the roles and responsibilities are. So you start to carve out the roles and responsibilities of different players and different stakeholders on the project. In addition to providing clarity on roles and responsibilities, project governance should also provide clarity on how decisions get made. Who makes what decisions and how do certain decisions get escalated? So for example, your steering committee isn't just there to get project status updates and to sign the checks for the project, they're also there to make strategic, operational, and technological decisions in some cases. So you want to make sure you define, for example, if you're changing your entire operating model, who's going to approve ultimately that new operating model. And so that sort of project governance around decision-making is just as important as the roles and responsibilities in the boxes on an org chart that you need to define. And the better job you do here in the project governance phase, the better job you're going to have clarity on how decisions get made, which is going to speed up your project, but it's also going to provide more ownership of the project for you internally. So rather than just outsourcing the entire project to a third party, like a system integrator or a software vendor, you're actually taking ownership of the project and providing that overarching project governance that the system integrators will support rather than run themselves. And that's a really important part of a successful digital transformation is ensuring you have this level of internal ownership. Now the last thing I would do is a general set of first steps within a digital transformation is to start building the case for change. This is where we look at the quantitative case for change in terms of the pros and cons and the cost-benefit, the overall ROI for the transformation, but also looking at why are we doing this? Why are we going through this transformation? What is it we're trying to accomplish as an organization? And a lot of this case for change ties back to the very first thing I talked about, which is strategic alignment and that strategic definition of what it is this transformation means to the organization. Now we can use that messaging to start deploying that messaging throughout the organization so that the average stakeholder, the average frontline employee fully understands and is aware of how this transformation is going to support the overall goals and objectives. So part of building the case for change is identifying and quantifying the business case itself, but also communicating the case for change to the entire organization. So if you were to hire me to manage your digital transformation, these are the five things I would do. There's the ways I would start the project and it's the ways I would ensure that we have a solid foundation and a clear direction and an effective direction for who we are as an organization. You may have noticed that there's no one-size-fits-all answer. There's no silver bullet that I'm bringing to the table, but this is a process that we bring to our clients and this is the process I would bring to you if I was managing your digital transformation. And our team at Third Stage would follow the same process as well. So I hope you found this information useful and in fact if you are looking for more best practices and other lessons learned from digital transformations in general and ways to think about how you can get started on the right foot with your digital transformation, I encourage you to download our annual digital transformation report, which is a study that covers general best practices for making your digital transformation successful, provides frameworks and methodologies, as well as independent review and rankings of different software solutions in the marketplace. So I encourage you to check that out below in the links I've included in this description. I've also included a number of other resources that are meant to help you through your transformation and provide other best practices to help you along the way. So I hope you found this information useful and I hope you have a great day.
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