Tag: Business Transformation

Building Capability For Successful Business Transformation | Sherpas in Blue Shirts

Many studies over the past decade reveal the high rate of failure in business transformation initiatives. I think that’s a daunting record that signals risk for companies considering transformation. Even so, I’ve worked with companies that succeed in major transformation. So, I blog frequently about some of the most significant principles for approaching these initiatives, de-risking the journey and the factors influencing success or failure. Recently, I spoke with an executive who is driving a major, company-wide transformation initiative at an energy company. What they’re doing is noteworthy and a model your company may wish to follow.

The company’s transformation initiative arose because the CEO realized the business needed to be more agile to survive and prosper in this new age of flexible energy production. In addition, except for the IT group, bench marking revealed gaps in departments and business units compared to world-class performance.

Principle: Go Slow To Gain Buy-In And Build A Culture For Change

As the executive explained to me, the CEO understood that successful transformation would first necessitate building a culture of change into the organization – a belief in their ability to transform. Rather than starting with large structural changes, they first created a simple but powerful framework to build the capability for change. The framework focused on starting with smaller initiatives that allow employees and leaders to learn how to drive projects, succeed and build belief in their ability to deliver.

Read more at my Forbes blog

How to Future-proof Your Transformation Project | Sherpas in Blue Shirts

I recently came across an observation about parenting that I think is wisely applicable to business decisions: “When we make assumptions, we contribute to the complexity rather than the simplicity of a problem, making it more difficult to solve.” It’s a trap that companies often fall into at the outset of a digital or business transformation initiative aimed at achieving breakthrough performance. Read more at Peter’s CIO online blog.

Who Should Be Responsible For Driving A Business Model Change and Breakthrough Performance? | Sherpas in Blue Shirts

The potential for breakthrough performance from digital transformation is enormous, but it requires a different approach to the initiative. The first step is to build a vision or strategic intent for the breakthrough performance and then build broad organizational support for the journey. The executives with responsibility for keeping the business running can’t allow the business to fail and can’t be deterred from running the business. This responsibility shapes their focus, sets their priorities – and doesn’t allow freedom for a grand experiment in transforming the business. It’s also highly unlikely that a company can dedicate its best resources for a multi-year project. So, who should lead the change initiative? There are two separate, distinctly different paths on the transformation journey. Each path needs a separate team driving the change on that aspect of the journey. I refer to them as the “journey team” and the “operational and capabilities teams.” Read more at Peter’s Forbes blog.

How Digital Technology is Changing the Status Quo in Services | Sherpas in Blue Shirts

What business wouldn’t want a 700% improvement in developer productivity or a big reduction in testing time or reduced time to market? The move to digital technologies carries the promise of dramatic transformation. With digital technologies, companies can do things that they have never done before. Digital is not a matter of delivering existing services in a different way; it’s delivering a new kind of service that really disrupts and changes the very fabric of how a company does business. That’s the digital promise. In a prior blog, I explained that technology is fundamentally changing how services are currently done. Now let’s look deeper into what the technology is really doing.

With digital technologies, companies have the providence of greenfield opportunities: to do new and different things, things that result in breakthrough performance in a critical business function. Let’s look, for example, at the customer onboarding process for a healthcare insurance company. It’s about a two-month process from the point that a new customer agrees to come on board to the point where the customer is fully registered and operating seamlessly in the company’s systems. The promise of the digital breakthrough is that a company can complete that process in 20 minutes – orders of magnitude faster than two months.

And that’s not all. The customer experience is also dramatically different. Customers become frustrated with the bureaucratic effort to enroll in a healthcare system and all the people involved (HR, actuarial, validating, authorizing, registering, etc.). Those multiple departments take tremendous resources and tremendous time. Changing a two-month process involving eight or nine departments to a seamless, 20-minute process delivers tremendous value to the customer, the insurance company and the customer’s employer.

The digital promise moves a business process from the provision of technology to the provision of a service. But the hard truth is that the old shared services IT construct simply won’t enable a company to achieve the digital promise.

In a shared services type of IT structure, the company focuses on unit costs or component excellence and component cost as well as trying to optimize each of those nine departments and their interactions. It’s a nightmare. And it’s very costly. Digital breaks that down and makes it “one and done.” For instance, an onboarding employee can work through the app, potentially a cognitive agent guiding the employee and prepopulating the app and doing much of the work. Consequently, there is no longer a need for the functions of those nine departments, certainly not in all of them.

The implications for an organization’s governance, policies, philosophies, procedures and people are dramatic, which is why few firms achieve a breakthrough performance. The tremendous change constrains them from moving in that direction.

A 700% improvement in productivity is astounding and hard to believe, as is a 59-day reduction in time to market and $600 million in savings over three years. These breakthrough performance outcomes may seem extreme, but they were achieved by leading financial institutions. Digital technologies such as analytics, automation, cloud and cognitive (AACC) enable companies to dramatically change their productivity and costs of delivering services.

Achieving such dramatic performance breakthroughs is difficult. But even when companies deploy these technologies in a less comprehensive way or not in a breakthrough paradigm, they still impact the market. For example, service providers are competitively bidding and able to deliver the same services at 30-50 percent less. While that’s not a 700% improvement in productivity, it is indeed a big change. Interestingly, that improvement is the same or more as what was delivered through labor arbitrage 10 or 15 years ago.

The times are changing – again – in the services world.

How a PMO May Cause Your Transformation Initiative to Fail | Sherpas in Blue Shirts

Enterprises have undertaken transformation initiatives for decades, and there is a bevy of books, articles, white papers and consultants that tout how to ensure transformation success. One of the top best practices touted is to use a central Project Management Office (PMO) that takes responsibility for the transformation plan and holds the organization accountable for achieving it. It sounds like a great idea. The problem is it doesn’t work very well.
I’m not saying companies shouldn’t have PMOs. Project Management Offices are known for effectiveness in tracking outcomes, directing resources and investments for the project, documenting decisions and reporting. But they’re not known for orchestrating change. In fact, the track record of PMOs for successfully driving and achieving change in a complex transformation initiative is very low.

Read more at Peter’s Forbes.com blog

How CIOs Can Deliver a Breakthrough Business Transformation | Sherpas in Blue Shirts

Imagine yourself in this situation: Your company is in a hyper-competitive market and has identified a compelling new opportunity through leveraging big data and the Internet of Things. But capturing the opportunity requires that you as CIO lead the company in a business transformation initiative – a journey where many organizations typically falter along the way, delaying time to value. What can you do to avoid this outcome, or even failure? What are the winning moves?

Read more in Peter’s latest CIO.com blog post.

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