Ask 10 people in a company what Transformation is; there will be 10 different answers. Their response will entirely depend on the role they play in the company.
Business leaders want Transformation to enable sales growth, increase margins and enable fast, innovative product delivery. IT leaders describe Transformation in terms of process and technology. Simplifying process and modernizing systems to use the latest technology and minimize “technical debt”.
Both views are right, Transformation is not an “either or”, but “both”!
Aristotle summed it well, “The whole is greater than the sum of its parts.” The value of a Transformation initiative is maximized when the strategy considers both the Business and IT needs and the end solution is architected across all components maximizing business value.
Putting a high-performance transmission in a car doesn’t make it go faster unless the engine is upgraded as well. Getting the most out of Transformation requires planning and execution across multiple areas to achieve the expected value from the investment.
I recently finished helping a company with their Transformation initiative and wanted to share some of the key considerations making it successful.
5 Transformation Considerations
1. Before jumping to a solution, figure out the problem(s) to solve for. Leave the IT glasses off and view the problem(s) from a business perspective first. Looking for a problem to use a shiny new technology has a lower chance moving the business forward. You could end up having cool systems, but your operating expense and revenue numbers stay flat, not good! Start by sitting down with the business owners. They are the ones always talking revenue, margin, product features, and understand the market and competition. Don’t be concerned about title or where they sit within the organization, the closer you get to them the better understanding of the need you will have. Then find the problem solvers and go-to people in the IT organization and get their perspective, be on the lookout for “cause and effect” and start connecting the dots. Discussion opportunities:
- What’s the business strategy?
- Reaction time to ever changing market conditions, how quickly can we add features?
- What’s hindering the products?
- What can we automate?
- What does the competition have that we don’t?
- What’s our product differentiator, is it our custom code or should we look at buying off the shelf or software as a service solutions?
- Do we have the talent?
- Do we have information and not just an ocean of data?
2. Consider the “The Transformation Trinity – People, Process and Technology”. Building out the Transformation strategy must take into account changes in technology, process and the employee base. Implementing technology no one can operate or constrained by an old process won’t allow the business to achieve its full potential from transformation. Create Program level swim lanes for each project, include the sub-project milestones and interdependencies between projects across swim lanes, if you have none then you have done it wrong.
3. Create a governance structure around the Transformation initiative. If you think this is unnecessary overhead, you should think again. Tough decisions will need making and the more layers between the decision and the decision maker will increase the complexity of the transformation effort. If the decision rest with the CEO then the Transformation effort should be driven from someone at her table. Remember, the organization will measure the initiative’s importance by the level driving it.
4. What gets measured gets done. Use key performance indicators (KPIs) to measure progress. KPIs measure the important stuff and signal if something isn’t making the progress it should. Each project within a swim lane should have KPI’s and should come together to give an overall status on the health of the swim lane and ultimately the Transformation program in general.
5. Technology considerations, one-size doesn’t fit all. Businesses should make the technology choices best fitting their transformation goals. Each technology decision should be made with the problems/goals the company has set out to achieve. Multiple variables factor into selecting the right technology. Below are thoughts to consider.
- Decide on buy vs build. Buy technology not core to the revenue generation of your business. All of the custom-built technology within a company competes for engineering resources, non-revenue generating components will always lose and become starved technology over time. Buying a packaged technology lets someone else deal with the patching and feature updates and doesn’t steal precious engineering resources from your core mission.
- Total Cost of Ownership (TCO). TCO is made up of two components. First the cost of the initial buildout of a new platform or capability. This includes the labor, hardware, software, license to create the platform. The second component, and the one often missed in the decision, is the ongoing support cost of the platform. Doing a 5-year outlook of the cost to support the new platform after implementation is a good rule of thumb and will help “ballpark” ongoing future costs. This also helps when it comes time for budgeting in out years.
Transformation is not just one decision but a series of interrelated decisions made over time. Tap into your network of colleagues, industry peers and companies that have already been down the Transformation path for information and guidance. Leverage vendors like Approach Logic with experience in navigating the hazards and connecting business and IT goals to achieve a successful outcome.
The hardest decision is to start…