Why Business Transformation Projects Fail And How to Fix Them

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The term “business transformation” (BT) may be a buzzword now, but BT is a longstanding practice—and has been the focal point of my 25-year career in technology.

BT has evolved from other names like Business Process Reengineering and Digital Transformation. New practices have sprouted up over time to support it, too, including customer experience management, lean process management, continuous improvement and business process management.

From my perspective, however, the definition is simple: business transformation describes the adjustments that an organization makes to People, Process and Technology in order to address changing market conditions or, occasionally, to proactively reinvent a company or function.

Market conditions are constantly in flux and can change as a result of technology shifts, new regulations, competitive pressures, business priority changes, changes to product offerings or evolving customer engagement expectations. The cause of the change generally dictates whether BT should occur at a business line or process level or if it should transform the entire organization.

Regardless of the cause prompting the change, I’d caution you against thinking of BT as a goal unto itself. Keep in mind that it should be the process that underpins support for a well-defined strategy and it is only successful when People, Process and Technology are aligned with that strategy.

People, Process then Technology

When I talk about People, Process then Technology, I do emphasize the order of those elements.  Your first step is always to get the right people in the right roles.  The next priority is to understand your current processes and to determine how those processes should evolve.  Last is technology.  As a technologist, I am obviously passionate about the role that technology plays in BT.  And I do think it is extremely important to select the right technology.  However, I find that BT initiatives often fail for reasons which have nothing to do with technology. I’ll discuss People, Process and Technology in further detail below.


It’s All About Alignment

Lack of alignment is the single greatest cause for the failure of BT initiatives.  Alignment among stakeholders, alignment between the business and IT, alignment of the program and business case with the corporate strategy and priorities—all of these elements are critical to success.

The most effective BT firms have a strong focus on governance and alignment, and their project leaders are true consultants.  They work with the client to define a solution vision which lays out the scope, ensuring that it is mapped to the client’s business strategy and priorities.  They also extract the right requirements to support that vision, rather than asking the client what they want or telling them what they should do because it fits their model of doing business.

In most cases, BT firms will use additional resources on-, near- or off-shore to support projects. While organizations tend to think of location of resources as tied most closely with cost, location has a much more pervasive impact on alignment. For example, if business analysts, developers, testers, PMO, etc. are all completely aligned, there is more efficiency, higher quality and less rework.  By having development and testing in the same time zone as the rest of the program, teams can effectively communicate and collaborate for better results.

Voice of the Customer (VOC) Is Critical

It is critical to enroll the customer in the BT process.  If the initiative is in direct support of a customer engagement, then focus group and direct client feedback is essential.  If it is an internally-focused initiative you’re working with, business participation is essential.  Often, the time of key business stakeholders is hard to come by.  However, they will lose more time addressing sub-par transformation results than they will if they commit to being active participants in the process.  Try to have direct business involvement, rather than proxies or intermediary groups.  If 100% participation in the projects isn’t possible, at least have very frequent checkpoints.

It Isn’t About Good Requirements, It Is About the Right Requirements

Good consultants will not just gather requirements.  They will strive to understand the business objectives and work with the client to extract the right requirements for that phase of the project, and will ensure that the scope is appropriate from a technology perspective.  A consultant’s skill in this area is paramount.  A missed requirement costs orders of magnitude more to correct after you are in production and can affect not only the cost of development and testing, but also time to market and user adoption.  

More than an Afterthought: Culture, Adoption and Communication

I always recommend having wins for three levels of constituents within each iteration of a BT program.  Those three groups include: the end-users, business management and the executive team.  Change is challenging for everyone, even when it is positive change.  Having improvements at each constituent level that map well to the corporate priorities will ensure alignment with the corporate culture and ultimately accelerate adoption. Creating a communication plan at the inception of the project with defined touchpoints throughout—and, of course, executing that plan well—keeps everyone enrolled in the process and focused on tie-ins to the overall strategy.  It is absolutely clear that setting proper expectations with the user community, senior executives and stakeholders has a significant impact on program success.


Where There Is Smoke, There’s Fire

BT solutions shouldn’t chase symptoms, but rather should address root causes. Breakdowns in an organization’s processes can be great divining rods that uncover root causes, and when those causes are addressed with a comprehensive BT strategy, the symptoms are corrected as part of the process.

Embrace a Methodology, Don’t Create One

When it comes to software delivery lifecycle (SDLC), there are several methodologies which can be successful.  While I am personally a fan of Agile/scrum, I recognize that programs can be very productive leveraging other methodologies, such as Waterfall.  The important thing to remember here is to select a methodology that’s proven and fits your program and goals well, and then to adhere to the chosen methodology.  Don’t try to invent your own methodology because it is challenging to implement the required organizational and cultural change.

Proper Governance

Ensure that you have the proper governance in place to manage and oversee the project based on the methodology you choose.  Use tools that provide transparency and management of the process.  Most importantly, embrace and learn those tools yourself.  Don’t expect to have a project “done to you” and achieve the goals you desire.  Leveraging consultants and partners is fine, but ensure that they are enabling your organization to allow your people to manage the program and learn from those consultants.

And now…Technology

There are specific characteristics of technologies that are imperative to a successful transformation project.  Most important is flexibility.  Since BT is a journey rather than an event, and because it is often impossible to anticipate future needs, your technology must be flexible.  It is better to iterate and evolve than to rip and replace.

Next, in terms of imperative technology characteristics, are scalability and power.  The future is hard to predict, and the last thing you want is to successfully launch a new capability, have it be wildly successful and then find out you can’t scale to meet your maximum demand.  While overbuying may not make sense, being able to add capacity, computing power, users, and so on, is important.

One final note on your core transformation technology: embrace it.  Enable your people.  You don’t have to do all of the work yourself, but do ensure that your people truly understand the technology and have effective tools in place to govern and manage the deployment and maintenance.  This may take time.  So, when you bring in those consultants to help, make it clear they are doing it “with you” and not “to you.”  Send your people to training before the program begins and have them work with your selected partner through the whole process.  Allocate extra time and budget for your people to become enabled.  Adding your people to the consultant’s team won’t speed things up, it will slow them down.  Plan for that. Have them educate and guide you to the right conclusions and understand why they were the right conclusions.  


About the Author

Dana Reiner is a Business Transformation thought leader focused on helping client organizations transform their business operations through the use of innovative technology solutions.  In his 25-year career he has worked with and for some of the most distinguished names on both sides of the transformation equation — on the software side and on the consulting side.  He has helped clients transform their businesses on a small scale as well as organizationally. His diverse clients have come from a variety of industries and spanned in size from small to mid-size up to some of the largest global organizations.  

He is thrilled to have joined Rulesware, LLC, which he feels fully supports what he has come to recognize as the most important factors in BT success…he works with incredibly smart and passionate people, who bring along a process based on true best practices and focuses exclusively on the gold standard of BT technology, Pega.

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