Digital transformation is not a new concept, but it is the way to the future. The only question that remains is who will be prepared to handle it? According to Forbes, 84% of the companies going through digital transformation fail due to numerous reasons. Our ERP expert Eyad Badran discussed how to prepare for a seamless digital transformation and the top 5 pitfalls you need to avoid and how choosing the consulting partner is the key to success.
The First Step in a Digital Transformation Journey is Research.
When it comes to digital transformation, research is the key. You need to understand your market, your competitors and their strategies. You also need to comprehend the technology that you plan on implementing and how it will affect your company’s operations. Most importantly, for the people these changes will impact, you need to be ready to answer their questions about how this will turn out for them.
It’s also essential to look toward what could happen and keep an eye on what might come next from competitors.
In addition to research, you must assess risks that may arise from implementing such extensive changes. And don’t forget about costs! How much are these new technologies going to cost? What about the workforce? Do you have enough people on board with the skills needed for this kind of transition?
You also need to answer a few questions. What do you hope to gain from making such a drastic change within your company? How will it impact sales numbers or customer satisfaction scores? Will some opportunities open up because of this move (e.g., expansion into new markets), or do they already exist but aren’t being exploited due to outdated systems/processes)? How do you measure success when it comes down to future projections instead of current performance metrics? There must be a clear understanding of the drivers behind the Digital Transformation step for the company so that change managers will know where to focus their time and resources
Top 5 Pitfalls to Avoid During Digital Transformation
Once you have finalized your research it is time to prepare for the most common pitfalls that ruin a Digital Transformation journey.
Non-committed C-level executives
The pervaded nature of large-scale implementations, like adopting a new cloud ERP system, for example, something like SAP S/4HANA Cloud, requires every senior-level manager’s buy-in. Since this implementation will probably impact every company on some level. It’s essential to appoint a change manager early on in the process. Their role will ensure that the project performance is not compromised and onboard everyone with the new changes. A change manager will ensure that there is a collaboration among departments. Although this is not an easy job, without a formal governance structure for this project will lead to potential user adoption problems.
Failure to optimize IT costs
It is a common fact that you will probably reduce IT costs by moving to the cloud. The move to the cloud will enable you to utilize resources more efficiently. A cloud-based ERP solution will give you access to all of your financial data in real-time, which will support insightful decision making. However, the migration to the cloud requires accurate planning and a strategy since it is quite a big investment. Without the right consulting partner like Altivate this can be disastrous as the stakeholders may be surprised by hidden costs. For instance, companies underestimate the costs for critical requirements like change management. They may also fail to accurately calculate the important architectural planning that is needed for migrating the workloads to the cloud. Another common problem is setting unrealistic project timelines.
Lack of clear strategy
Companies enthusiastic about innovating with promising new technologies are usually eager for the change to get rid of the problems associated with legacy systems. Legacy on-premise ERP systems, for example, offer system functionality and limited access to data and insights. The employees are burned out in manual processes, which leads to missing opportunities. All these reasons will encourage companies to jump in to migrate to cloud-based ERP systems to quickly solve these pains. The downfalls of rushing shortsighted to the cloud without a proper strategy are numerous, like impulsive IT spending time and money.
A company must first collaborate with a reputable partner to evaluate the situation and conduct an audit to uncover its needs before implementing any technology. It is essential to define your organizational goals, assess your existing technology landscape, your budget, and other strategic aspects that engage decision-makers across the company.
Following that audit, your consulting partner shall start putting together a roadmap and strategy for the implementation to be smooth with minimal unexpected issues.
Setting unrealistic expectations
Stakeholders often tend to either underestimate or overestimate the requirement and expected outcomes of the Digital Transformation project due to insufficient experience. Setting unrealistic expectations, schedules and resource requirements can be overwhelming and will often cause waste of resources. Therefore, once again, to avoid falling into this pitfall and setting realistic expectations, you must engage a strong consulting partner early on in the process to help you set up a well-defined strategy, assign roles and responsibilities, and set the right timeline.
Choosing the wrong consulting partner
Choosing the right consulting partner is the cornerstone for the success of Digital Transformation. There are many factors to consider when selecting a partner. To mention a few, you need to ensure that they have experience working with companies like yours. Moreover, ask for client references and demos to ensure they are able to deliver their promises.
Make sure to research the team’s experience that will be working on your project, and don’t settle for the sales team. Ensure your consulting partner can get the needed operational and technical expertise for the project and be a fit for your corporate culture.
Embarking on a Digital Transformation journey is a major decision, and Altivate has supported many clients on this journey. If you want to explore new possibilities for your business, we are here to help; you can contact us for a consultation and exploration call.
