Insights

Holistic Digital Transformation in 2022: So Much More Than ERP Tools

holistic digital transformation

 

A good enterprise resource planning (ERP) system, such as a human resource information system (HRIS), can: 

  • Drive administrative efficiency. 
  • Provide critical operational insights. 
  • Act as a platform upon which big data is organized and reported. 

 But a “good” ERP doesn’t cut it. Implemented in a silo and with narrow goals, an ERP is less transformative than it otherwise could be.  

To truly transform your business in a cohesive and holistic way, HR, IT, and other executive leaders need a strategic framework that goes beyond an ERP implementation alone.  

Today’s businesses need: 

  • Vision. 
  • Processes. 
  • Culture. 
  • Talent.  

We’ll explore how technological change must be coupled with organizational and procedural change for maximum impact. 

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Digital Transformation Is Evolving 

To be competitive, leadership needs to strategically focus on achieving business outcomes, not on solving tactical day-to-day issues within their respective functions.  

While an ERP system is the technology-enabler to sustain and evolve your organization, it’s a means to an end. ERPs can leverage technology enhancements, such as AI and bots, allowing businesses to be more agile and efficient. How those bots are used (and where) is a more important consideration than the deployment itself. Real digital transformation is so much more than tools. 

Many leaders believe that “by simply buying technology — or investing in any of the fancy tools or shiny new objects of the booming tech market — organizations will somehow transform,” Harvard Business Review noted. “But even the best technology will go to waste if you don’t have the right processes, culture, or talent in place to take advantage of it.” 

After working with hundreds of clients seeking to replace their aging administrative systems with a cutting-edge ERP, we’ve found that firms need a holistic approach for a successful, sustainable deployment.  

Top-to-Bottom Vision From Leadership 

Leadership must define transformation goals – the vision for the future operation of the business.  

Visioning ensures leadership alignment prior to launching a transformation effort and eventual system deployment. Ensuring that the transformation vision is clear and that the entire leadership team is aligned toward an effective future state will expedite transformation significantly.  

When initiatives are underway, leadership will encounter a number of decision points that need immediate resolution to stay on scope, schedule, and budget. Knowing that the vision is clear and that leadership gives consistent direction helps the project team stay on track. Distractions, like in-fighting or shifts in direction, can derail a transformation effort and waste valuable time and money. 

The mark of a good vision is one that evolves with the transformation. As your transformation initiatives progress, leadership must adjust and course-correct based on what the business is learning to ensure outcomes support the objectives.  

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Processes Mapped to Priorities 

A clearly articulated vision naturally sets up a framework for substantive process improvements

For example, if leadership determines that talent acquisition and retention are the highest priorities, then the transformation team knows that recruiting, compensation, and performance management business processes must be evaluated and enhanced to ensure the new system is configured optimally to support talent acquisition and retention of top talent (the top priorities).  

To achieve the greatest benefit of the investment, it is critical to identify pain points within current processes and visualize future-state outcomes of the transformation initiatives before initiating the system implementation. 

Cultural and operational shifts must be factored into a systems deployment, as, digital transformation is more than just tools. 

A technology implementation without a) clear understanding of current pain points and b) development of future-state business process goals can elongate the implementation and result in not achieving the organization’s objectives. 

Understanding the transformation goals of leadership will also play a key role in building a strategy and ultimately selecting a tool that can be configured to achieve the business outcomes. The lengthy process of system selection can be accelerated by having deliberate conversations upfront about goals, priorities, and future-state business process design. Lastly, core software design decisions should be made and resolved before the build – not during. 

As the transformation team makes decisions, they can provide system-selection updates to leadership. These updates should align with vendor criteria and company vision identified during the initial visioning phase.  

Defining business processes early during the transformation can save significant time in system configuration because core future-state operations have already been determined. 

Change Requires a Shift in Culture 

Business transformation requires cultural transformation. 

Organizations sometimes view a system implementation to be just another new tool, and therefore business processes and technology to accommodate and optimize use of the new technology quickly lag behind. Cultural and operational shifts must be factored into a systems deployment, as, again, digital transformation is more than just tools. 

For example, one of the top factors influencing a successful digital transformation is the democratization of information across the organization, facilitated by the right digital tools. 

Historically, information and decision-making were centralized with top leadership. However, modern ERP systems enable information accessibility for managers, facilitating swift decision-making and resource management. This empowers managers to develop leadership skills, allowing them to think and act more strategically. 

It also requires a shift in leadership culture to delegate decision-making to lower levels of management. Breaking down functional silos, though, can represent a significant cultural shift for many companies. It's important to set the groundwork for this shift early on in your change management strategy.  

Based on a McKinsey survey, a successful transformation effort ensures that:  

  • Key stakeholders encourage staff to challenge conventional ways of thinking and working. 
  • Key stakeholders get more involved in the development of initiatives.  
  • Managers foster collaboration between teams working on transformation projects. 
  • Leaders encourage staff to experiment with new ideas.  

Many of these elements require organizations to make cultural shifts well before launching into the technology implementation process. 

Talent in Tandem With Technology 

As Harvard Business Review proclaimed early in the pandemic, “Digital Transformation is about Talent, Not Technology.”  

Holistic digital transformation is inherently a people-centric process. “It’s really quite simple: the most brilliant innovation is irrelevant if we are not skilled enough to use it, and even the most impressive human minds will become less useful if they don’t team up with tech,” the authors noted. “The main implication is that when leaders think about investing in technology, they should first think about investing in the people who can make that technology useful.” 

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Many businesses make the mistake of hiring an external firm to swoop in, implement the new technology, and then leave the business trying to figure out how to integrate it into their business operations.  A successful transformation program puts talent first.  

An implementation partner should: 

  • Support your business approach to transformation initiatives. 
  • Help design a strategy for talent development. 
  • Support seamless people and process transitions after go-live.  

Jobs, required skills, and business processes will evolve, requiring critical employees to grow and develop with the transformation. Because transformation efforts usually have tight schedules and funding, turnover can significantly impact a program’s success.   

More Holistic = More Successful 

While many businesses are interested in swiftly selecting new technologies, deploying solutions, and pushing their organizations to shift and realize benefits quickly, a more holistic approach to transformation is proven to be more successful. Navy SEALs train with the philosophy slow is smooth, smooth is fast.  

Entrepreneur and former Navy SEAL Brent Gleeson noted in Forbes that "…organizational change fails when companies move too quickly, starting on step 5 of the process – skipping fundamental elements such as aligned vision and culture. They run to their death and the change process eventually stalls.”  

It can seem counterintuitive to take time in setting the vision, evaluating shifts in process and culture, and prioritizing key talent. However, businesses that take a thoughtful and deliberate approach to transformation are able to accelerate technology alignment and decision-making, and are therefore hands down more successful. The organization is accountable to its staff throughout the change process and vice-versa.

Reach out to the Human Capital Transformation experts at CrossCountry Consulting today for support on your next initiative.  

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