Indispensability of Change Management in Digital Transformations

Author Rahul Goswami outlines – the art, the necessity and the impact that a change management governance brings for the fructification of digital transformations. This also brings into focus – how sustained change management implementations mystify the business outcomes for organizations’ customer experience model.

Imagine this: Seemingly overnight, your organization has morphed from an electronics company into an automotive and embedded softwares company. This does not appear to be a drastic hypothetical situation. It is happening to every enterprise in every industry globally, whether or not you’re prepared for it — and it’s called digital disruptive transformation.

Done well, digitization improves customer experience, creates more useful products, and results in tighter and more efficient operations. It hardly matters if you’re a business leader or a technologist, the digitization to your advantage can be achieved with utmost business continuity, if business and IT work together. In a successful digital enterprise, operating in traditional silos is a ticket to failure because of strong coherence between technology and business. So, why are industries changing?

An extract below explains the top 3 imperatives that are compelling industries to either perform or get perished.

Thanks to cloud and open-source tools, applications can now be written by practically anyone, not just enterprise IT. Mobile data is available at prices and performance levels that make connected devices and connected smartphones viable. Increasingly, customers and citizens are interacting with enterprises and government agencies through digital channels because it’s convenient. And data science (e.g., machine learning, artificial intelligence, prediction algorithms and recommendations engines) – the smart intelligence behind digital disruption, is moving forward by leaps and bounds.

Addressing Digital Next through Change Management

Herein almost all of the CEOs are being asked if: Are you being disrupted at the level of your infrastructure model, your operating model or your strategy model? This is probably a starting-point which is acting as a catalyst to drive change management functionalities get more ingrained than ever into – Business Strategies Transformations | Business Operations Transformations | IT Transformations.

Data from a McKinsey survey shows that the success rate of transformation programs that deliver a “true step change in performance” is less than 40 percent. This is why many executives are asking questions such as:

• What are the actionable steps that we need to undertake to ensure success?
• What should I concentrate on; what is important?
• How do we mitigate program and project risks?
• How do we make the change stick?

So what should executives do to help ensure lasting change happens in their organizations? To begin with the change management implementation, focus can be routed on the dimensions where there is the biggest gap between the peer benchmark compared to your digital maturity. You can de-prioritize the segments where you see a smaller gap between the ‘As-Is’ position versus the ‘To-Be’ state. You can use this as a basis for prioritizing where to accelerate in terms of investments and resources as part of the next steps of your digital transformation journey. Many organizations still see a toddling speed in maturity to address technological, staffing, and process requirements needed for Digital Transformation captive gain, which in-turn affects their agility to optimize operational, tactical, and strategic decisions. For example, organizations with deep expertise in technology can still realize that they are unprepared for the operational effectiveness or vice-versa. Therefore Gap-Analysis behavior and benchmarking steps up as the first toolkit to drive the change communication and user adoption.

“Science of Managing Change”

Dealing with change has never been a one-size-fits-all model: your organizational culture and the talent and skills of the people within the organization significantly affect your approach. As C-level executive, determining the way forward for your organization depends on many factors that are unique to your organization and is likely to require a combination of approaches.

Progressive organizations rely on the C-level executives to use data-driven business insights to promulgate intelligent decision-making with alacrity in an increasingly complex and data-rich operating environment. C-level executives who use Big Data to better understand the economic trends, along with an understanding of where the organization has been, what the current state looks like, and where the organization wants to go, has a competitive advantage. This level of awareness helps put the company in a better position to successfully enter new or exit existing markets, change the product/service mix, or enter new global markets before the competition. Thereby increasing market share and putting the organization on a path toward sustainable growth.

So what are the various tenets that a change management exercise comes with, to propel an industrial organization to the new NEXT – below beliefs explain those principles of science:

• Organizational Restructuring and Business Alignment
  Change management requires business process and industry knowledge, as well as the ability to analyze changes in roles and responsibilities. It requires making appropriate changes to organizational structures and performance metrics, as well as executing a two-way communications plan that addresses all key stakeholders. It also calls for execution in delivering training and education programs

• Enterprise Wide Buy-In Sponsoring
  Create a sponsor coalition that is broad based in nature, and strong enough to make change happen. You have business processes that transcend functional or organizational boundaries. So your sponsorship needs to address optimizing enterprise-wide processes, and avoid situations where optimizing one area of the business negatively affects the overall enterprise

• Centralized Business Transformation Team

Companies today don’t undertake a large business transformation effort unless there is a compelling business case for it. Because of the nature of these IT-enabled projects, business people, along with IT people, should drive new program implementation. It’s important to have business people in charge of implementing change within their own organization or functional area. No one else knows the business processes, underlying policies, procedures, and behaviors characteristic of their home organization as well as they do.

• Individual Business Units Change Management Targets
  It requires institutionalizing complete and accurate information on all significant business-transformation programs and activities that are ongoing in the corporation. This requires change champions to exercise:
  • Clear identification of strategic projects is the enterprise currently undertaking
  • Documentation and Implementation of timelines, communication messages, education programs, and cost-benefit analysis for each business unit
  • Acknowledgement of key interdependencies between projects or initiatives across business units acknowledged
  • Define risk-management processes and business continuity plans in place

  Enterprise Wide Information Architecture/Business Dashboard

  Develop an Information Architecture that includes internal and external data sources to enable instantaneous data analysis and market intelligence. This will help you to overcome the ongoing complexity and costs of running your existing IT infrastructure for your information strategy in an accelerated fashion. This mechanism disseminates knowledge and collaboration causing the inculcation of work virtualization, knowledge integration, governance, and privacy.

Pulling it All Together

Whether the ultimate aim is reducing costs, improving efficiencies, enhancing reporting, or supporting decision making, any transformation project can veer from even the best-laid plans. Achieving low hanging fruits as a wholesome part can help shift employees’ mindsets is the momentum that builds from witnessing a few short-term victories.

With the intensity and emotion generated by large-scale transformation initiatives, senior finance leaders must resolve to remain engaged, communicating and “marketing” the benefits of the overall transformation to the entire organization. Here’s where putting in the work up front to gain buy-in and actively manage the disruption can pay off in the long run.

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Written by: Rahul Goswami, Indian Author and Poet – Global Sales & Solution Support.