Best Practices to Address the Challenges in Intelligent Document Processing Adoption | Market Insights™
Intelligent Document Processing
VIEW THE FULL REPORT
Intelligent Document Processing
VIEW THE FULL REPORT
Businesses have conducted change management programs for 20-30 years. Even so, change management programs are systematically ineffective in delivering results. Unfortunately, the ineffectiveness is much worse today.
That’s because companies are engaged in digital transformation, where the degree of change is much greater than in the past. What causes the ineffectiveness, and what is the remedy?
Change can be painful for companies and individuals. But if you are undergoing a digital transformation, there’s simply no getting around it. In fact, the degree of change is greater, and there is a cascading set of consequences for these deep changes, which each require their own change management.
At Everest Group, executives often ask us, “What is the most effective change-management tool or method for driving the necessary change in transformation?” Answering that question, I first point out two hard truths:
Executives cause their own problems with change management – often in three key areas – that make their efforts to drive change ineffective. As a result, they encounter big, expensive problems and passive-aggressive behaviors that delay achieving the objectives or even cause the transformation initiative to fail.
People don’t change unless they want to.
In a recent blog post, I explained that companies need to reconceive their services as an evolving journey and need to rethink how they manage services. That’s because services are becoming more strategic in a digital environment and require ongoing commitment and focus to ensure they deliver on their promise. Their evolving nature makes services a cascading change management challenge that remains as long as the service remains. One of the most difficult aspects that companies struggle with is how to build conviction and sustain momentum that they are successfully moving toward delivering value in the services.
Why do digital transformations experience more failure and face more peril than companies anticipate? Why do they take far longer than anticipated? With apologies to Einstein, I believe we can understand the answers to these questions by viewing them through the lens of “GUT” – (General Unified Theory) of digital transformation – and how many related factors intertwine to increase complexity and complicate change. I’ll explain those factors in this blog and discuss how to navigate them so your company can minimize the perils of change and end up with a beneficial economic model.
Read my blog on Forbes
There’s no silver bullet for driving change; it’s a challenge in any organization and services providers and their clients struggle with this. In working with providers and buyers on transformation deals over the years, I observed the need for breakthrough metrics to drive the change through the buyer’s organization.
As I mentioned in my previous blog post, transformation needs to start with defining the business outcome goal from the customer perspective and then translating it into issues and organizational implications that the delivery organization can align against. Those issues include metrics that you must clearly articulate at three levels in the buyer’s organization:
Having metrics at each level puts business transformation not in light of those who are doing it but, rather, those who are experiencing it.
Service providers need to keep in mind that this shouldn’t be a roadmap with a detailed plan. But people at each level in the client enterprise need assistance in understanding what they are trying to do, how they have to measure themselves against that goal, and what the implications are to technology, talent, policy, process, and sourcing. The metrics can’t be prescriptive.
If you’re an executive, you can break through your organization’s obstacles to change by driving change through the benefit goal and the metrics that allow the organization to understand and configure against the goal. First define the experience you’re looking for. Then ask how to accomplish that. You’ll end up with a set of metrics that defines what you have to do to get to that experience.
As an example, let’s say you want to improve the speed of the employee onboarding process. What are the technologies you have to put in place? What talent issues do you have to think through? What policies and processes do you need to think through? What are the consequences of changes to those technologies, talent, policies, and processes? Now you have the metric and sub-metrics that help guide those implications.
Once the client organization is committed to the transformation journey at each level, the service provider can then engage with them around how that should be done.
Photo credit: Flickr
The pace of new technology is advancing exponentially. But organizations change so slowly. This is particularly frustrating if you’re a senior executive who sees the opportunity to drive efficiencies or value and by making big changes in your organization, yet you find it’s painful and difficult to drive change and you can only make incremental progress. It’s also frustrating if you’re a service provider trying to sell a new vision to a slow-changing organization. What causes the slowdown?
People do what they are incented to do and what is in their best interest. Just because technology makes something possible doesn’t mean that people are prepared to change. And driving change is dependent on relationships with other people; highly dependent technologies also impact change. It’s not that individuals want to thwart change; it’s just that change will be thwarted because people always do what is in their best interests, as they perceive it.
Making a change in technology forces change in policies, processes and relationships; and that requires realignment. Alignment is complicated. It’s a combination of organizational incentives, personal incentives, metrics and what we measure, proximity to people, how we relate to one another and technology.
The tragic mistake that clients and providers so often make is believing that changing one aspect – the technology or perhaps a few people – will drive others to change. But it won’t. Driving change requires realigning the organization and ecosystem.
Borrowing from the old adage, human behavior is like water – it flows to the lowest point or takes the easiest path. This is a defining principle about why Apple has been so successful: it makes it easy to operate an iPhone or iPad. When we fail to make those same accommodations and think through technology change thoroughly, we can’t drive the organizational and behavioral change we’re looking for.
Change and adopting new technologies is so simple for the architects and designers. But they fail to view it from the perspective of the people who will be affected by the technology. New technology requires creating new steps or more complexity; therefore, new technology is more difficult to utilize than the old technology people are accustomed to and trained on.
Often the new visions based on a breakthrough or change in technology rarely live up to their potential because the service provider only changes the technology or provide new technology to the aspects of the service for which the provider is responsible. So the remaining organization can’t or won’t change; it’s left with the original interests and metrics, and it won’t readily change to accommodate the new structure.
Unfortunately, service providers’ salespersons attempt to beat competitors’ offers by oversimplifying the nature of the change the client will need to undergo.
To ensure client satisfaction and to ensure the technology lives up to its potential, providers selling a new vision and making promises must be far more realistic around the cost and time it takes to accomplish the change from implementing new technology.
Click the image to enlarge
Implementation, change management support, relationship management, customization, solution breadth, SMAC capabilities, pricing flexibility
The 16th century political theorist Machiavelli wrote that there is “nothing more dangerous, or more doubtful of success, than to attempt to introduce a new order of things.” I think we should remember his words as we embark on the journey to embrace the next-generation solutions entering the services marketplace. Next-generation options are now changing the nature of the relationship between buyers and service providers. And there is plenty of significant change for both sides.
The traditional structure of solutions focused on cost reductions, RFPs prepared from a proscriptive perspective, and rigid MSAs included in the RFP package along with process descriptions, service level specifications and pricing exhibits. Value was created by onerous contract terms or traps for the provider.
Next-generation solutions give way to a much more fluid partnership approach to create value. The parties distribute the risks and develop a relationship built on flexibility and innovation. Contractual documents evolve with the discussions and negotiations. In a next-gen deal buyers and providers collaborate on how they might execute the buyer’s business objectives. Together they create value through building a framework for a successful relationship rather than through an onerous contract. The contract reflects the principles the parties agree to rather than predetermined contractual terms and conditions.
This highly collaborative process in developing the commercial requirements of the contract covers such issues as who owns the intellectual property. In many of these constructs, buyers ask their providers to develop or bring intellectual property with the buyer using it on a consumption basis. The discussions and negotiations articulate both parties’ risk, understanding of the business impact and the desired solution. They jointly develop the initial governance model and also participate jointly in refining it over time.
In a relationship developing a next-gen solution, the parties need to discuss — not dictate — the commercial requirements. Competitive tension is far less useful than in the traditional RFP structure where price is the dominant issue discussed. Instead, in next-gen deals, the parties discuss capabilities and design as levers for creating value.
There is another significant aspect that differentiates next-gen relationships. The commercial construct must allow for a journey rather than a destination. As the commercial constructs take place, the buyer often faces substantial change in organizational philosophies, policies and processes. This journey of change can be as daunting and significant as the one the provider must go through.
From our experience in working with clients in these kinds of relationships, the first step toward success is for the buyer to build a robust strategic intent that includes both its objectives and its vision of how to get there. Both parties can then use this strategic intent to keep all parties aligned over time and create a North Star to follow as they navigate through a collaborative but complicated process.
Photo credit: Hartwig HKD