When going through digital transformation, many organizations fall into the mindset that the initiative is aimed to add more technology to their already overloaded technology stacks. However, the most effective starting point is often to focus on the investments that have already been made. Are they aligned with the overall strategy of the organization? Have they been properly fine-tuned?
Some questions to ask to evaluate your existing technology framework include:
- Are your current solutions fully implemented and are you using all of their software capabilities?
- Do you have systems that don’t integrate, forcing duplication of entry or inconsistent data?
- Are there manual processes or Excel worksheets in use because you can’t get the information you require?
Assessing the alignment of technology to your overall corporate strategy can be a very daunting task. However, if you take a consistent approach it can be very achievable.
Taking a holistic approach
A holistic approach to evaluating your organization’s processes and how well they are aligned to your strategy and goals is the first step and is easier for some than others. Sometimes it requires a third-party perspective or an internal analyst to ask the hard questions about why you are doing things a certain way. Other times, the necessary changes required to maximize efficiencies are obvious.
Once the laundry list of deficits has been identified, it is very important to take an intentional and actionable approach to building your road map for execution. During this process, three key decision criteria need to be considered:
- Value – What value does the change bring to the organization?
- Level of effort (LOE) – How difficult will it be to implement?
- Risk – What happens if you don’t make the change?
Value can be a difficult metric to evaluate, because in many cases there are competing opinions on what will bring the highest degree of value. Is it the number of people affected by the change? Is it the increase in revenue by implementing the change? In some cases, a change may not affect that many people but will result in efficiencies that reduce the number of resources required.
When evaluating value, you must identify the end result and measure that to a predefined value indicator that can be applied to all initiatives. Many times this correlates to a dollar amount, whether it results in cost reduction, increased revenue or reduced time to market.
Level of effort
LOE can also come with its own unique challenges when trying to prioritize your initiatives. LOE can be looked at as the length of time it will take, the total cost, the number of employees affected or the identification of resources needed to accomplish the task. In many cases, if an organization had the talent to accomplish the task it would already be complete. Defining a LOE matrix to assist in the evaluation and prioritization that can be standardized makes it much easier to determine the order of execution.
Finally, risk is the last but the most important evaluation criteria when building your digital transformation road map. Many equate risk to the protection of data or compliance activities, and that certainly is very important. However, many times risks are also associated to the loss of employees or customers by not implementing change. The risk factor is often the greatest decision criteria an organization has when building its road map, because the cost of doing nothing in most cases outweighs the risk in taking the steps to make the change.
Once you have all of your initiatives scored based upon the three evaluation criteria (value, LOE and risk) the real work begins—prioritization. You might think that it will be very easy to build your road map once this task is complete, but unfortunately that is not always the case.
For instance, what if an item has low value, low LOE and high risk? How do you weigh that compared to a high-value, low-LOE and low-risk item? The overall scoring process and determining how and when to implement a new solution isn’t always an exact science. Typically, the most effective way to prioritize is to focus on impact.
For a successful digital transformation process, your organization must first ensure that the initiatives are in alignment with the overall corporate strategy as mentioned earlier. At that point, the determination of impact should be addressed. The execution of the road map and the impact to both internal and external users is critical to maintain momentum. Checking a box is not the point; instead, the objective is working through the plan and confirming that the scoring exercise—value, LOE and risk—is validated along the way.
We all know that priorities change, business requirements are fluid and our customer demands are always at the forefront. Having the ability to roll with the tide, make the appropriate adjustments, validate the plan and keep working through it is most important. Your stakeholders need to be able to recognize the improvements as you work through your transformation road map for it to ultimately be successful.