Organisations are voting with their feet. More and more are taking the step to digital transformation, abandoning analogue operating models in favor of their digital counterparts.
It’s happening everywhere. Organisations are adopting digital-first strategies to modernize, adapt faster to change, deliver a great customer experience and drive efficiency. Self-service operations, for example, make it easier for citizens to access services and free up internal resources, while automated finance processes liberate resources and enable the finance function to become a strategic business partner.
According to IDC, digital transformation spend is predicted to exceed $2tn worldwide by 2023. At present however, 87 percent of companies – public and private – have not realized the full impact of their investment in digital. They obviously recognize the risk of not embracing it. A hearty majority are just getting it wrong.
So why is this?
For many organisations, it’s easy to believe that modern software is the magic wand to digital transformation. Implement a leading-edge enterprise resource planning (ERP) platform and in a few months your processes will be automated, your people free to focus on value-add tasks, and your customers benefiting from a radical new service experience.
This is rarely the case. Technology project goals are often improperly defined and poorly communicated. This frightens and frustrates employees. Instead of adoption, you get resistance, misalignment across departments and competing interests without common goals.
To succeed long-term, a digital-first strategy demands a dramatic, organizational-wide change program – a journey that connects the technology with processes and people.
People are especially vital. Ask any CXO, and they’ll tell you, “People are our greatest asset.” However, digital transformation can only work when your people are aligned with that change. They need to understand why the change is happening, how it can benefit them and how they can engage with the change.
The art of the possible
Here at Embridge Consulting, we are working with organisations across the UK to drive lasting and successful transformation. And as a boutique digital transformation consultancy, we are at the heart of our customers’ change: we see their challenges at close quarters.
Time and again, our advice to customers is to allocate funding and resources to change management. Don’t trust the technology and a roadmap for change on a hastily-drawn whiteboard to deliver transformation: put change readiness at the center of your future actions. And do it from day one. Don’t add change management as a bolt-on exercise – embed it into your thinking from the outset. That way you will reach your future state faster.
We call it the art of the possible.
Here are five vital tips from Embridge’s experience to help you manage digital change. And remember the imperative: each of these five parameters should be addressed at the embryonic stage – day one – of the program planning.
1. How change ready are you?
Change readiness starts when you identify something has to be different. It is important to expand your thinking beyond the process in question to how it might impact the rest of the downstream organization. Maybe you need to engage and inspire your people with an advanced talent, core HR and payroll solution. Or you require more timely and accurate financial planning to improve decision-making.
Change like this doesn’t happen in silos; instead it impacts the entire organization. Therefore, it is important to understand – and measure – how ready your entire organization is to the change intended to be made.
2. How mature is your change management?
This may be your inaugural digital transformation project; it may be one that follows previous programs. Whatever the case, you need to hold a mirror up to your organization and understand how you have managed change in the past. What worked well? Where did we struggle? What are the priority areas for remediation? For example, did people linger using the legacy finance process, long after the new one was deployed? Why was this – and how can we bring people with us to prevent this reoccurring?
By learning from past mistakes and maturing your change management, you can build a better future.
3. Do your people suffer from change fatigue?
Change is constant. It’s a familiar maxim – but relevant to today’s connected, fast-evolving operational processes. Look around your organization and understand how much change your people have been put through. Is this the first, the third, the tenth change program they have been through?
Be cognizant to the fact most people don’t like change – too much disruption can be overwhelming, diminishing employee satisfaction and reducing the opportunity for people to be aligned with the change program. Phase your change so people are engaged with it.
4. Is the appropriate funding for change in place?
The cost of change reaches far beyond the sticker price of the technology. Work with program stakeholders to agree a detailed budget for your business change program to avoid any unforeseen expenses that could derail or halt the change. Don’t feel you need to follow your original plan or budget precisely when implementing any changes to your business. You may need to modify your proposals, policies and procedures to consider changing circumstances.
Poor change management opens you up to risks of incurring significant costs, both at the project and the organizational level. For example, loss of money needed to address staff issues or loss of investment if the change doesn’t deliver the right outcomes
5. How do we measure success?
It is imperative to establish clearly defined metrics that you can later use to determine the success of the transformation program. Benchmark your current performance so it can be compared with your experience one, two or five years post-go live.
For example, measure how many resources were needed to complete the previous analogue versus the new digital process. How much faster can the process be executed? How much money is being saved? This type of evaluation should take place for every process, across all departments to generate a business-wide measure of program success.
Drawing it all together
According to Prosci, the global change management specialists, organizations should allocate at least 10 percent of their entire digital transformation budget to change management. By adopting a proven, people-focused approach to change – one that reaches beyond the technology – organizations are more agile, change-ready. And be uniquely positioned to reach their future state faster.
Wendy Henry is Head of Business Change and Digital Adoption for Embridge Consulting.