Digital transformation is hard and expensive. A recent Harvard Business Review study found that 69% of the $1.3 trillion spent on digital transformation last year was wasted. And with the major consulting firms citing success rates below 30%, it’s not for the faint hearted.
Why Is Digital Transformation So Difficult?
The root of the problem is that mature organisations must digitise before they can become digital. Digitising goes to the very heart of how an organisation creates and delivers value and then turns it on its head. But after decades of corporate evolution, delivering value today is often dependent on thousands of process fragments, stitched together by a tangled web of legacy systems.
The typical approach to solving this conundrum is to bring in external hires with the requisite skills. But with so many organisations chasing the same limited talent pool, labour rates are high. The cost is exacerbated by the fact that the new hires have no organisational knowledge and struggle to deliver without subject matter experts to support them. This pushes out the delivery time and makes the transformation far more expensive.
One unintended consequence is that the day-to-day delivery teams resent the approach. The new hires aren’t delivering, are getting paid a lot more, but are dependent on the support of the SMEs in the day-to-day delivery teams. To add salt to the wound, in all likelihood, it’s the day-to-day teams who will bear the brunt of the job losses when the program concludes.
The solution is to bring the day-to-day teams into the transformational tent and task them with both enabling and supporting the transformation.
More With Less
Their first task is to build operational capability within the day-to-day teams and for them to learn how to do more with less. This will free up capacity. Which in turn means their operating budgets can be reduced. Surplus resources can be then re-assigned as SMEs to the transformation program.
There is an additional benefit of learning how to do more with less. A focus on quality and capacity will increase their level of control. Customers will benefit from improvements in delivery quality and consistency.
The transformation will take time, but customers aren’t prepared to wait. With the day-to-day team now in control, they not only have sufficient surplus resources to re-assign, they have the time and resources to innovate and enhance the customer experience.
Laying The Foundations
The capability uplift is a virtuous cycle. With the team in control and solving customer problems, they are now ready to embark on a simplification and industrialisation agenda. A progressive Stop-Consolidate-Standardise-Simplify-Redesign approach will dramatically simplify the automation task for the transformation team.
Workforce of the Future
The final benefit of this approach is that the day-to-day team will have the capacity and opportunity to learn new skills. Rather than facing into an uncertain future they will have the skills, tools and experience to play an active role in the workforce of the future.
Collectively these factors reduce the total cost of delivery:
- Day-to-day operating budgets can be reduced.
- Fewer expensive, external hires are required.
- Revenue is protected and retained.
- The program timeline, hence cost, is reduced.
- Redundancy costs are greatly reduced.
To make this possible the executive team must acknowledge that the day-to-day team is equally critical to delivering the transformation. They should enjoy the same level of executive attention, recognition and reward. In addition, the day-to-day team must implement an operational excellence program to learn how to do more with less and enable the simplification agenda.
Not only will this approach reduce the total cost of delivery, staff engagement will increase, and implementation risk will reduce. The likelihood of success may even nudge higher than a coin toss.
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