Don't mess up your digital transformation - greatest hits from selected podcasts
- Is digital transformation an enterprise oxymoron? It sure feels that way sometimes. I get my inspiration via video shows with the best practitioners I can find. Here are their project warnings - and top lessons.
Digital transformation is hugely problematic - starting with the term itself. Frankly, I don't even (ab)use it anymore.
On the other hand, software vendors didn't imagine digital transformation during a marketing offsite either. The pressures that undermine businesses are real.
The "digital" in transformation is the first problem. Any transformation worth its salt is about process, culture, and business model change - not just technology.
We also know that discrete "digital" projects hit a wall - fast. Successful transformations need quick wins, but: they must ultimately permeate the business. If they are solely top-down proclamations, they won't stick. Employee buy-in matters - and it goes far beyond tracking software adoption.
But those lessons border on the bloody obvious - and they aren't enough. Example: in March 2022, McKinsey reported that a whopping 70 percent of large scale transformations fail. We can debate the exact definition of failure, but underperforming projects are everywhere. Those failures nudge terrifyingly towards common sense: things like "don't overlook change management" and "invest in training and re-skilling for your employees."
Those are frustratingly common culprits, and they must be addressed. But we don't need another listicle of the obvious. If companies don't get those two by now, a listicle won't help. What about moving beyond the obvious, and digging into unexpected/underestimated field lessons? That's the core of my semi-regular hits/misses video show, which happens on Fridays (when the scheduling gods line up). I ask my guests to prep, and then to let it rip. The audience, comprised of skilled practitioners themselves, gets in our grill with snarky-tough questions.
What follows is a collection of a few standout quotes on why transformations stall out - and what to do about it. Each one links to the full audio replay on my enterprise podcast channel, in case you want to hear the full conversation.
1. Digital transformations aren't product-centric - and landscapes are heterogeneous
Too often, vendors present a product-centric vision of transformation - and by product, I mean one product (or suite). Where is the Gong Show when we need it? Analyst Josh Greenbaum has been railing on this topic - and railing against the silos on the customer side as well. On the show, he didn't mince words:
If you're an all-cloud CRM vendor, understand that you've got to live in a heterogeneous world because walling yourself off in CRM isn't going to work. Same thing with HR and other spaces.
The idea that, in the marketing literature, all roads lead to digital transformation - as long as they go through my product - is really the thing I'm fighting. It's just not the reality of the situation... You create a structure called silos to sell product. Soon enough, that's replicated inside the companies themselves. So you have the ERP silo. Over here, there's the customer relationship folks, and the VP of Sales has nothing to do with that guy over there. She's got her own priority, she's running her own product, etc.
So when it comes time for those two assets, theoretically, to sit in the room and transform the enterprise and have an end-to-end process, the ERP guy shows up and say, "Here's what my vendor of choice says, and by the way, that means your CRM sucks. The CRM person, she's like, 'Well, I don't even need your ERP,' or 'your ERP is just a commodity.' And pretty soon you just have this turf battle going on to defend your individual priorities.
Maybe where we go with this is to create a job category that is, you know, the ombudsman or the internal integrator. Some people think it's the Chief Digital Officer. I'm not sure, but then you get this kind of recursive/reflective problem. It doesn't go away; it just gets worse and worse. (Death to all silos - debating the customer-first enterprise, with Hyoun Park and Josh Greenbaum)
2. Sign a bad services contract, have a bad transformation
No one has done a better job than UpperEdge of putting enterprise software negotiations info in the public domain. During our show on the do's and don'ts of transformation, UpperEdge's John Belden brought it back to the core: customers need to get their software and services contracts right.That's not easy, given the vendor has the resources and experience advantage. Belden raises a crucial, counter-intuitive point: obsessing on the getting the price right can be a fail.
If you're a company that is, let's call it $10 billion in size or less, you don't have the opportunity to run big transformations across your organizations on a regular basis. This is a once-in-a-career kind of an opportunity for most people that get involved. So there's just this fundamental lack of awareness of: What does good look like?
Part of what we try to do is to work with our clients in defining: what does good look like within a contract? Good doesn't necessarily mean lowest price. Good, to me, means highest value in return for the dollars that you're going to spend. I would much rather see a client get a lot of value out of a deal at a good amount of money, then low value out of a [less] amount of money. So many times I'm focused on the upside of the contract: 'What can you get in addition,' versus 'How do you get the price down.' (Putting digital transformation and cloud to the project test - a chat with Belden and Mansfield of UpperEdge)
3. Don't underestimate the problem of bias
No one blogs more on the obstacles to successful transformations than Eric Kimberling of Third Stage Consulting. On my show, I challenged Kimberling not to mention "change management." Yes, it's important, but what are the other fail factors? Kimberling served up one I didn't expect: bias.
You get bias either on the solution or the technology, and/or the way that solution should be deployed. So there's product bias, and then there's strategy or implementation bias... We make the same mistakes over and over again. We defer to the technology. We assume that we don't need to define our future state, because the software is going to do it for us.
That bias is a problem. You have this echo chamber in our industry where all the consultants are doing and saying the same things over and over again, repeating the same mistakes - and causing clients to run into trouble.
The other part of bias is the product or technology bias. You know, 'I'm an SAP guy,' or 'I'm an Oracle guy or gal, and that's just what I know.' Therefore, everything has to fit in that world. The reality is: every organization is different; every organization has different needs, and you have to take the blinders off and have an open mind. So that's really what I mean by bias.
I asked Kimberling: does that extend to prime vendor bias? As in, 'They're the ones we always work with, so they'll be good for this one too'?
Yes, you get the mindset of no one ever get fired for hiring - insert the system integrator name here. Executives think, 'Okay, if I hire Deloitte, Accenture, IBM, it's going to succeed,' because, again, it's a safe bet. But what we find is it's actually, in many cases, a high risk proposition to go with those same players. (Why is digital transformation falling short? With Eric Kimberling)
4. Don't measure the wrong things
No one is advancing the data on why projects fail (and why they succeed) more effectively than Bonnie Tinder of Raven Intel. Tinder revealed fresh project data on several shows. One of the biggest problems in the SaaS era? Measuring the wrong things. Too often, we serve the wrong KPIs (example: arbitrary-but-rigid go-live dates). Tinder is working to change that. As she told us:
We started asking a new question this year. We asked the customer the question, 'How likely am I to buy more software or services after this project?' Why I wanted to add this is: I wanted to see, was there a correlation between highly-rated projects, and customers willing to buy more software? No shocker: those who rated projects highest, so a nine or 10 out of 10 on overall satisfaction about the projects, were three times more likely to purchase more software from the vendor.
Software vendors need to be measuring, 'What's the outcome of these projects?' On the inverse side of the question, those who rated projects low, a seven or less, overwhelmingly said that they would not be likely to purchase more software from that vendor. (Bonnie Tinder on the gap between project success and mediocrity).
5. Don't forget the art of the possible
When budgets narrow, so does the imagination. Brian Sommer, one of my MVP hot seat guests, turned in a vintage 2020 show that holds true now. At showtime, we were early in the pandemic, with the same economic uncertainties of today, though of a different flavor. Sommer warned customers: don't fall into limited thinking.
If there ever was a time to really sit down, get some quality time, and do a real current IT strategic plan, it's now. So much stuff is changed... You've probably got some of the firefighting stuff out of the way; you need to be thinking about where you're going to go next. And I would suggest: it's not going to be a linear extension of kind of the initiatives and projects you had going on [before].
I also think it's time for CIOs to get out and play in traffic, and really do some serious looking around outside of their industry, to find out what is the art-of-the-possible today. You need to find out what other people are doing, and find out what technologies they are looking at. Use that to maybe have some brown bag lunches or whatever, with your own staff. so everyone gains from this new knowledge that you're going to collect. (Enterprise hits and misses radio - Brian Sommer on ERP's failings and more)
I ran out of space before I ran out of episodes. On this theme, also check out Maureen Blandford on legacy mountains: Getting off of Legacy Mountain - obstacles to enterprise transformation, with Maureen Blandford
No matter how much you trust your software or services provider, the prime vendors need accountability from outside experts. There are many flavors of independents for different project phases. They are always worth a close look. At diginomica, we document project successes via an extensive use case library. We make a point of documenting the difficult points as well - and we'd be glad to hear your stories and feedback. This isn't something you can package up and put a ribbon on. It's an ongoing conversation we must all partake in - if we want more projects to achieve the most important metric of all: success.
You can listen to the full show archives via my Busting the Omnichannel podcast archives.