Fighting Fake News in Digital Transformation
August 16, 2023 Alex Woodie
It’s not news that businesses across the globe are embarking upon ambitious digital transformation projects, which are often advertised as an imperative to commercial survival. While these projects can be successful and profitable, they can also lead to business disruptions and losses thanks to unscrupulous vendors that aren’t attuned to customer needs. That’s why it’s so important to highlight the fake news and misinformation that’s so rampant in digital transformation.
ERP projects are notorious for going off the rails, and modern-day digital transformation projects are no different. In fact, more than half of digital transformation projects experience a “material disruption” that results in a delay of the go-live date by weeks to months and increase the implementation costs by 50 percent to 300 percent, according to the 2023 Digital Transformation Report, published in April by Third Stage Consulting, an Englewood, Colorado-based company that advises companies on digital transformation and ERP implementation projects.
There are lots of reasons why these projects run into problems, according to the 2023 Digital Transformation Report. In general, bigger projects with a broader scope of transformation are more likely to have longer implementation times and higher costs, as are those projects touching bigger and more complex operations. This is pretty much common sense.
But beyond these obvious facts, there are a few bugaboos lurking in the digital transformation field that can trip up unsuspecting victims. In a recent video, Third Stage CEO Eric Kimberling calls it “fake news” or the “misinformation” of digital transformation.
Kimberling, who is so good at explaining in simple terms how complex tech projects tend to go bad, shared a few pieces of wisdom that should be required reading for tech execs who are considering shelling out millions for a big, hairy digital transformation project.
Kimberling’s first kernel is to beware of the promise of silver bullets.
“A lot of times software vendors and technical implementers will sell you on an idea that sounds too good to be true,” he says. “Things like best practices and other aspects of digital transformation can be provided and sold to you as something that’s going to be a silver bullet that will solve all the world’s problems as it relates to digital transformation.”
But there are no free rides in digital transformation, and everything has a tradeoff. A vendor hawking “agile” as the cure-all for your IT woes is likely covering up for some other weakness in the plan. Special implementation methodologies and accelerators are other examples of silver bullets to look out for.
Second, be aware of one-size-fits-all digital transformation strategies, Kimberling says. While it may work with baseball caps, the odds that a commercial off-the-shelf application is going to work perfectly with every company is somewhere between slim and none.
“It’s important to recognize that your organization is different. It’s unique. There’s different nuances to your organization and your operations and there is no one-size-fits-all that’s going to align with your needs 100 percent, ” Kimberling says.
“The key is to find the solution or the solutions that best fit your needs, and then from there identify what the risks are so you can mitigate those risks,” he continues. “But regardless of what your solution is, it’s important to recognize one size does not fit all and chances are fairly high if not 100 percent that you’re going to have to tailor any given solution for your specific needs and priorities.”
Another bit of fake news: the one-stop shop.
“What software implementation consultants are good at is deploying technology,” Kimberling says. “That, however, does not constitute an entire digital transformation. An entire digital transformation or ERP implementation needs to focus on more than just the technology. It needs to focus on things that are much more important than technology.”
Technology might dazzle the eye like a glistening diamond in the sun, but it’s not going to give you everything you need to digitally transform your business. Kimberling, who has more than 1,000 tech projects under his belt to draw from, knows that things like business process reengineering, organizational change management, the overall solution architecture, integration, data migration, and program management are items that can make or break an ambitious tech project.
“Those are just different examples of some of the work streams and competencies that need to be part of a digital transformation project team, and no one software vendor is going to be able to provide all of those competencies,” he says. “The reason that they perpetuate this fake news . . . is because it benefits them. What these third parties want is for you to put all your eggs in one basket, and all your revenue that they’re generating from you in one basket. So it’s important to diversify and hedge and make sure that you have the right skillsets and competencies on your project team to ensure that your project is successful.”
Number four on his list: Don’t worry about current state.
One of the best ways to become a footnote in the history book of failed IT projects is to completely ignore where you’re coming from. It is tempting, of course. After all, what’s more important: Where you are now with your legacy monolithic IBM i system, or the glorious future of containerized microservices running in the cloud that awaits you? But as he is wont to do, Kimberling plays the Debbie Downer to the Alfred E. Newman of worry-less tech incompetence.
“It is absolutely critical that you focus on the current state,” Kimberling says. “You don’t want to dwell on the current state. You don’t need to over analyze the current state. But you do need to understand where you’re starting from and where you’re headed.”
Why should we know where we are? One reason is that you might “throw the baby out with the bathwater and eliminate some of the core strengths and competencies that you’ve built over the years in the name of deferring to new technologies,” Kimberling says.
Another reason is to get an inkling of how big the digital transformation is going to be. Is it a massive change the likes of which no CIO has ever seen? Or is it a minor change that has low odds of failure.
“The only way to fully understand that is to understand where you’re starting from, in addition to where you’re going,” Kimberling says. “So regardless of the fake news you might get in the industry that suggests that you don’t need to worry about the current state and only worry about the future state, you want to make sure that you avoid that pitfall because it’s something that leads to a lot of chaos and lack of direction for organizations that fall into that trap.”
Fifth: Technology Matters Most.
It’s tempting to focus on technology. It’s the thing that changes the quickest, after all. But in fact, technology is the least important thing in a digital transformation project, Kimberling says.
“Despite the name digital transformation, it’s the people, the process, and the strategy that’s ultimately going to determine whether or not your project is successful and rarely is the technology itself going to determine whether you’re successful or not,” he says.
That’s not to say that technology has no bearing on your success. You could pick the wrong technology, Kimberling says. Or you may upgrade to a new application that is so ridiculous awesome that it actually does have a revolutionary impact on your business.
“Technology can in fact bring new competencies and streamline processes to your organization,” he says. “But that’s just a beginning point. That’s just a starting point that isn’t real until you address the more important parts of digital transformation, which are the people, process and strategy aspects of change.”
Last but not least: Agile is the key to success.
Agile methodologies, such as CI/CD, have gotten a lot of press. But it’s typically just a minor part of an overall project, not the main selling point.
“The industry is going through a weird dynamic right now where they’re constantly trying to find ways to show that they’ve learned from mistakes in the past,” Kimberling says. “And digital transformations have had a history of failure, so one way to address that is to say we’re going to deploy technology differently, which we do need you to be more successful. However, agile and implementation methodologies alone are not going to make a project successful.”
There’s an exception to that rule, which is when the new agile process focuses heavily on change management or process improvement, which could raise the odds of mission success.
“But if the implementation methodology focuses on deploying technology faster, technology itself without necessarily focusing on processing people improvements, then that methodology is going to fail, just as methodologies in the past have,” he says.
To watch Kimberling’s presentation on fake news in digital transformation, go to this link.