Beyond Digital Transformation – Getting Back On Track With The Wisdom Methodology

If digital transformation is as broken as it seems, how do we get it back on track? There are endless ‘quick fix lists’ and ‘digital transformation playbooks’ constantly in circulation, but the reality is that some absolute fundamentals must be in place before any digital transformation will be effective. Few of these fundamentals are predicated on technology; rather, they are strategic, organisational, and governance driven.

Before exploring the specifics, there also needs to be a discussion of the higher-level non-negotiables of success that affect how the specifics are driven:

Share! 

Everybody needs to engage with and buy into the overall strategy, including any partners or other third parties. Create the strategy in a simple, easily understood format and be prepared to share it with anybody involved in the work and everybody impacted by the work. Publish dates, publish expectations, publish impact, publish everything that is not commercially sensitive because people work better with context than they do in silos.

Commit

When the strategy is agreed upon, commit to it across the business. Every member of the C-Suite should be able to articulate the purpose of the strategy, the impact of the strategy and the current status of the transformation. Their language will vary, and their own agendas will be different, but the universal commitment will negate any negative impact on the overall strategy.

The Six Fundamentals Of Transformation Success 

What have we discovered that works for truly transformational organisations? This is a simple list but also an inter-dependent list. Every element needs to be in place for a successful transformation. Failed transformations may have succeeded with only slight changes or adding one missing element.

• Start by asking Why Are We Doing This? If we understand the why, we can adopt a Programmatic Approach committed to across the business.
• Identify and understand the Value of the programme.
• A structured approach to execution (the ‘what’) that allows the realisation of value fast and enables building around legacy
• Draw on the right expertise to build an execution strategy (the ‘how’) that blends external expertise with internal knowledge generation to ensure the how remains where it is needed most.
• Overhaul the processes within the programme. These are critical to success.
• Motivate all of the people and bring them all on the journey.

We have encapsulated these six fundamentals into our WISDOM methodology for success change:

Every element of this list must be properly documented and easily understood by anybody and made accessible to anybody involved. There is no point in creating a Transformation Programme and not sharing it with a partner employed to migrate infrastructure to the cloud. If they have context for their work, they will have more focus. Equally, there is no point in creating a vision that uses complex language that is not universally understood or is a set of tick-box words designed to impress rather than inform.

It is often valuable to create single-page posters or infographics that highlight the key elements of the programme. At Beyond we use large A0 physical posters to summarise the strategy and programme. Written in plain English and showing the impact across the business, these often end up being shared in company meetings, departmental meetings, and individual meetings and displayed across offices, in communal areas, and in non-office areas where they exist.

Communication is key to transformation success and only works when everybody understands the language.

Why? – A Programmatic Approach

Objectives gathered from discussions across the business. It is a non-technical framework with clearly stated and quantifiable business outcomes that the organisation stands behind. A good programme will articulate a multi-year vision based on the current starting point. This is key. A programme should be a living document, able to be changed as events change.

A strong programme begins with collecting and collating all the various perspectives. This is rarely best achieved internally as there will always be a natural bias toward the interest of the internal collator. This is where the effective use of a Strategy Advisor pays dividends. A good Advisor will not arrive with pre-conceived ideas; rather, they will question and probe across the organisation, gather viewpoints and then facilitate open and robust discussion.

Defining a programme requires all stakeholders to contribute and sign up for the outcome. It should not be created by an external consultancy; it should reflect the organisation’s culture and DNA. The most successful programmes use external advisors to facilitate the process, mentor, and guide the stakeholders. They guide, but they never drive.

A good Strategy Advisor will also be independent of any other business. Their only interest will be in your organisation and what you need to achieve. They will buy into this and may even agree to work on a contingent fee basis, where their success depends on the programme’s outcome.

When the outcomes are identified, and the value agreed upon, these must be captured in clear, simple, often visual artefacts made public within the business. Ideally, multiple feedback cycles from all staff are part of the overall process of gaining buy-in from the people.

Many organisations have some or many of these elements but often fail to bring them together into a cohesive whole. Setting off on any transformational journey without a fully articulated and shared programme invariably leads to failure.

When building the programme, the most critical element is identifying the value of the change.

Identifying Value 

VALUE = BENEFIT – COST 

The challenge in this value equation is measuring benefit, but no programme should begin without measuring it. A document that says it costs this today for technology and will cost this tomorrow is not a value equation because it does not establish value. Too often, Digital Transformations are based on cost comparisons and not value.

Value must be measured in terms of the business. There are myriad examples: more sales, more customers, faster delivery, cheaper delivery, more robust supply chains, more capability to serve more customers with the same core systems. However value is defined, it is not cost alone. If an entire programme is predicated solely on cost savings, it is unlikely to be transformational.

The programme must contain a clear articulation of Value, and this definition must become the guiding principle for every subsequent piece of work. The value must be agreed by all stakeholders and be clearly measurable. Without value, a programme is pointless.

Once the initial programme is defined and the why agreed upon, the next stage is to break this down into a number of stages. The most effective way to achieve this is to define a series of projects.

Structured Approach 

Programme stages are projects, with all the projects interlocking with each other and the overall programme. Each project must be capable of being clearly and effectively measured both as an individual element and against the overall programme. It doesn’t matter which project approach is to be taken: waterfall, agile, wagile, or random tasks. What matters is that it is clearly defined and that it clearly contributes to an element of the programme.

If it is not part of the agreed programme, it should not happen. If a project that is not part of the programme is identified, then the programme must be revisited first.

At this stage, the required projects should be defined. The project definition will set out the objectives, goals, success, and failure criteria and provide a budget that is directly mapped back into the programme budget and underpinned by value.

This is the stage where the cost becomes relevant, but all costs must be mapped back to the Value Equation to ensure that the benefit outweighs the cost for each project. Project definition itself can be undertaken through external consultancies where specific knowledge and experience is needed but should always be mapped back to the programme objectives internally.

This approach removes external parties’ influence from the overall strategic direction and prevents the oft-seen effect of wholesale change being driven by an external party ‘because we have done this many times before.’ Be wary of external providers projecting their experience to drive their own objectives.

Every project should contain people, process, and technology elements. This should be a mandatory requirement for each project definition. This multidimensional approach is intended to ensure that maximum value is attained from each project and that each project is a fully integrated element of the overall programme.

The other key element in mapping out the projects is to identify the skills that will be required to execute the project and operate in the future. For example, if the project is to migrate an element of the technology to a SaaS provider, do we have the right partner management skills? Oftentimes, this gets placed into Procurement under Vendor Management, but the operation of a finance system, for example, requires more than Vendor Management, and a formal structure for including a Finance expert in the process should be identified.

Having identified the skills required, map these to the existing skills. If skills are missing, can we develop them internally? Will we be losing roles? And can those people be redeployed? Have we engaged the right people across the various business units for their expertise and input into each project? How often do we see the business engaged in user acceptance testing after an initial deployment when they should be part of the design process first?

Finally, do we need partners, and if we do, are we absolutely clear on what they will be delivering? Do we have a tight Statement of Work that ties back to the overall Programme we can use for partner selection? We must avoid situations where we offer out a loosely defined project with a request to partners to provide their Statement of Work because this risks decoupling the project objectives from the programme objectives.

When we have a clear project definition, we can move to the Execution Strategy. How will we deliver these projects?

Draw On The Right Expertise 

Having defined the projects, we are able to determine the most effective execution approach and develop the overall project plans.

Timescale, Resources, and Cost are the standard constraints on any project, and this is no different for Digital Transformation. However, the overall programme will significantly influence these, and if the projects are clearly defined, they should also neatly interlock.

A crucial step at this stage is to identify where third parties are required and begin the selection process. With a well-defined programme, partner selection becomes easier, as there is less of a need to rely on existing partners because they understand us. The programme definition should level the playing field for all potential partners, providing them with the why and how they are being asked to deliver.

Which brings us to partner selection.

How often has your CEO, CFO, or CMO been involved in selecting technology partners? Evidence suggests the answer is ‘not often’ because it is seen as an IT function. However, if digital transformation is to truly ignite an organisation, those partners are critical, and the selection process should include all stakeholders in the programme.

The reason for selecting an IT function-only process is that the other stakeholders will not understand what is required. However, all stakeholders will have a view on culture and approach, and a diverse selection panel will also provide wider insight throughout the process. If you are selecting a partner to be a part of a transformational journey, their culture is more important than their technical knowledge, even at the project level.

Partners must also demonstrate that they understand the programme drivers and where their project fits into this. The best way to interrogate this understanding is with a broad selection panel.

Take, for example, how projects are costed. Many partners will extol the virtues of fixed outcomes and fixed prices. A well-defined project can have a fixed outcome, but the fixed price will always be uplifted by a risk factor, with the partners protecting themselves against the unknowns. The other option is usually a day rate, but this is also prone to being high because engineers will often dump time against a project, marking a day of work when, in reality, they have only worked five hours in a day, plus the overall cost has the potential to increase from the initial estimates.

With a well-defined project with measurable objectives, contingent fees are the most effective approach. It is an agreed price if, and only if, these objectives are met. That provides certainty on both sides and motivates both parties to work effectively together to deliver the project. Vendors will often try and negotiate out some or all of the objectives, but if the value objectives are held at the programme level with only deliverable objectives within the project, this removes that objection.

How a vendor is prepared to write a commercial agreement speaks volumes about their culture. Do they understand the overall programme? Have they sought to understand it? Can they clearly articulate the project’s value to your business, not just theirs? Are they looking at the work from your point of view? Will they make recommendations that may disadvantage their revenue stream because it enhances your organisation?

All these fall under ‘Vendor Selection 101’ but are often impossible to measure because the overarching programme is not defined, and selection is made against the project only. Set the project requirements clearly but share the programme objectives, and there will be better results.

With partners and internal delivery resources aligned, we must now address the other two fundamental principles, which must be embedded within the projects.

Overhaul The Processes 

Any transformational project will change how an organisation works, whether within IT or more widely across the business. These changes must be embedded within the project and not simply put aside, as we’ll get to that when we have changed the tech. Each project should include the relevant process change as well. There is a tendency in Digital Transformation projects to get the technology changed without leaving time and resources to address the myriad of other changes this will initiate. The process changes often drive the most benefit from any transformational project. Simply adding or changing technology rarely allows benefit realisation without changing how an organisation works.

This is the time for automation, Machine Learning, and AI to be part of the journey as well as exploring all the other processes. How does automation affect people’s ability to do their jobs? Will they become more efficient? Can they bill more? Can we finish projects faster and bill and be paid faster? All of these are tangible values that will be captured in the programme and should be cascaded into the projects.

But, this is key, so many technology-led projects fail to address these elements, believing they are an issue for the business that the projects fail to deliver benefits and become cost-driven.

Effective process change means changing how people work.

Motivate All Of The People 

Ensuring everybody understands why a transformation programme is being undertaken is vital. People naturally resist change if they do not understand why change is occurring. Creating a programme that is easily communicated to all levels of an organisation is crucial to explaining why transformation matters, the impact on the organisation, and the expected timeline, and this should be published before any execution.

If people do not understand why change is imminent, they will either ignore it or resist it. If they see no change coming, they may also introduce their own changes at local or individual levels, making transformational change even harder to apply as the starting point can move in certain areas.

However, the programme should also not come as a surprise because the best programmes and strategies are fed from across the organisation in the first place. Engaging a wide range of opinions and views at the outset will create a more robust strategy, and sharing it back is an effective way to demonstrate that opinions have been heard.

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