In the present economy, change is the only constant. As a result, organisations are under constant financial and efficiency pressure to embark on business transformation initiatives.
Business Transformation can help organisations harmonise their business and can provide the stake holders better clarity with factual data, enabling faster decision making in a world where everyone is racing against time.
Business transformation comes with a set of overheads:
- A clear vision with discrete objectives from Management: what to change, how to change and when to change
- Cost to implement the change
- Change Management to ensure user acceptance
Although these overheads are well known to Management, when it comes to implementation on the ground, people involved in the project start with a big vision but are still emotionally wedded to the old way of doing things. These implementations involve significant costs and resistance to change, but many of them are likely to end up with an output very similar to AS-IS in a new system. Once a new implementation is turned on, there is no way to go back – the business transformation project becomes a matter of life or death for the business.
In such situations, projects rarely achieve the projected ROI expected by Management and the shareholders. In order to deliver ROI, every project should start with a checklist of what is expected. This checklist should be constantly validated through the life of the project. The checklist is dependent on what is expected as the outcome from the business transformation project. Listed are some key ideas to be considered:
Does the project have the right people?
People with the intimate knowledge of the business and an adaptability to change are more likely to take quick and correct decisions impacting the project. Delays on projects occur when key decisions are delayed or taken with limited knowledge of business impact. Doing things right the first time costs far less than correcting things that go wrong, especially if changes are identified later in the project life cycle.
Does the project have a capable program governance structure?
Program and project management is crucial to monitor not only budgets and timelines, but quality and extent of deliverables. Overruns or restricted deliverables lead to ROI being spread over a longer period of time than originally envisaged.
Are business reviews scheduled periodically?
Although periodic document reviews by the business are scheduled on most projects, these are open to interpretation. In order to manage the impact of change early in the project timeline, periodic system walkthroughs and workshops on impending changes in working practices are crucial. If the business knows what they can expect at the end of the project, they will be more adaptable to change.
Is the project delivering the intended functionality?
Keeping the business users in focus, it is highly recommended to maintain a check list of all functionality required. At the end of implementation, they should get a product that helps them do their jobs better.
Do we have the right level of reporting requirements?
Starting from key metrics to determine performance improvement to better quality operational reports, reporting is a crucial part of every project and need to be identified in the early stages of the project. Analytics can benchmark the transformation and be used to prove the ROI. Too often, reporting requirements are not given suitable priority till quite late in the project cycle and often delivery is compromised based on budget considerations. This leads to frustration when the project goes live
Have we identified the right drivers for the business transformation?
While there are quite a number of drivers for such business transformation, it is useful to focus on a few high impact drivers.
Following are some ideas to identify focus areas for improvement:
- Get the set of most inefficient key figures in the current process and strategies to implement change in transformation to turn around. (Driver: Improve Efficiency)
- Determine where competitors have an edge and bring in change to ensure that solution delivers better to minimise the gap (Driver: Gain competitive advantage)
- Identify the process steps where most of the opportunities are lost – break down the steps, to get better visibility, to address the root cause (Driver: Increase Effectiveness)
- Identify the process steps which are most expensive and bring in change to reduce the cost. (Driver: Reduce Cost)
Are we consolidating the IT landscape in the organisation?
Last and the most important – ensure that business transformation is just not only an addition to organisation’s IT ecosystem. It should reduce the number of IT system in the organisation. To address this, the following is to be noted:
- Identify all different IT software systems available in the organisation and determine how business transformation can consolidate the landscape. This will help achieve ROI quickly, by reducing software maintenance costs and training costs
- Enterprise software packages like that of SAP provides one of the industry standard tools to embark on business transformation initiatives using best practises to save time and avoid inappropriate implementation. SAP also provides a scalable solution, so that different components can be added at different times based on business needs
- When such enterprise software packages are considered, it is important to understand what functionality is available to support the business transformation initiatives. This will also be an opportunity to identify opportunities for eliminating off-system processes
- After the completion of the business transformation project, it is crucial to organise periodic workshops to identify opportunities for continuous improvement in order to align the business model with the ever-changing market reality
In the next blog, we will focus on one product of SAP which is least used – Solution Manager, and how it can help to reduce cost and increase efficiency for better ROI.