Achieving business outcomes and maximizing the full value of digital transformation is an ongoing process that extends beyond the initial implementation.
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By Komal Mathur, SAP
In recent years, many businesses have embarked on digital transformation projects with a broad aspiration to increase revenue, lower operational costs, and improve customer satisfaction. Despite the resolve to transform there is still a significant gap between aspirations and achievement. McKinsey’s research on digital transformations reveals that the success rate for such initiatives remains consistently below 30%.
To address the complex issues that plague digital transformation projects and create a return-on-investment (ROI), keep the following tactics top of mind.
1. Define and quantify expected outcomes. Projects that have clearly defined outcomes which align with business strategy deliver clear and quantifiable benefits. Elevating customer responsiveness, establishing autonomous supply chain planning, boosting asset productivity, and reimagining finance are examples of expected outcomes. However, without a clear link to measurable value and a strong business case, transformation projects often struggle to achieve early success, gain executive support, or influence strategic decisions. This makes it crucial to quantify the economic impact of transformation initiatives.
For example, when an international metals and energy company launched its digital transformation, the leadership sought greater transparency in key processes such as procure-to-pay and opportunity-to-cash. By clearly defining their objectives and investing in process optimization and enabling technologies, the company achieved significant improvements: a 50% reduction in period-end close times, reduced late payments, fewer missed discounts, enhanced cash forecasting accuracy and better visibility of warehouse stock.
2. Assess the current state and establish a clear future state: For a business to transform, the future state will need to create differentiating processes that deliver value, provide competitive advantage, and align the company’s overarching strategy. For a manufacturer aiming to implement lean manufacturing practices, this involves integrating many suppliers for just-in-time sequencing.
While organizations are eager to embrace the future through transformation, they overlook the importance of creating a complete picture of the context of changes to design a thoughtful future state. Without a solid grasp of the current reality, change leaders struggle to deliver meaningful insights, foster positive mindsets, and align stakeholders for large-scale change initiatives.
A leading food company based in Europe wanted to harmonize and standardize systems, data and processes to enable organization-wide transparency. At the foundation of this change and roll-out was a companywide process management initiative which involved documenting as-is processes to compare to best practice processes to identify potential for improvement at an early stage. This also helped them make the changeover to target processes more efficient.
3. Synergize IT landscape: As important as it is to focus on processes, technical debt can also hamper digital transformation. Transformation initiatives should deflect technology pressure from people and eliminate the need to switch between multiple applications to achieve desired outcomes. A Swedish-German fashion label, which experienced rapid growth over a decade, implemented numerous IT solutions to support its expanding business.
However, growing pains surfaced with time as this landscape scaled poorly with processes spread across multiple systems. During their transformation, the company utilized SAP LeanIX to link business process information with system architecture to accelerate transformation. This approach enabled them to develop a new IT architecture that fuelled international expansion, met customer demands, and supported sustainability goals.
4. Execute/implement the change: Once future-state processes are designed, finalized, and approved, the next step is to synchronize the build and rollout phases to ensure alignment with the identified business needs. A key enabler in this stage is a transformation management toolchain, which fluidly transfers the “to-be” processes from the process repository to application management, testing, and training tools.
A global automation solutions provider executed large-scale transformation projects with the transformation management toolchain to move seamlessly from process management to enterprise architecture management to application management and administration. This helped them capture the entirety of their business and
5. Enable seamless user adoption: User adoption is critical to spur post-implementation value realization, as low adoption rates can undermine value realization and total cost of ownership. Digital adoption platforms integrate with an organization’s applications to identify user friction and offer tailored support and automation directly within workflows. This, in turn, helps organizations lower adoption risk by enabling consistent, effective and efficient use of software and the workflows it enables. In 2019, Deloitte rolled out several new technologies that its professionals needed to quickly learn and adopt to serve clients better.
Deloitte utilized WalkMe’s Digital Adoption Platform to offer in-the-moment guidance within the new tools. This delivered strong results, including an overall reduction in onboarding time and a 30% reduction in support tickets. Building on this success, Deloitte has since expanded WalkMe across nearly 100 applications to drive large-scale change.
6. Support continuous success: Achieving business outcomes and maximizing the full value of transformation is an ongoing process that extends beyond the initial implementation. By establishing systems and structures for value realization from the outset, organizations can avoid the need for large-scale digital overhauls in the future. Continuous value realization positions them for long-term success, enabling them to unlock significant opportunities and deliver greater customer value.
As the push for achieving value realization in transformation projects continues to grow, as demonstrated by real-world examples above, business transformation-focused technology can act as an enabler, towards achieving the expected return on investment, outpacing competition, and delivering stakeholder value.
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