Optimising financial processes

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Are the New Problems still the Old Problems?

I can no longer count the number of conversations I have had with executive stakeholders discussing the performance of substantial “digital transformation” initiatives, which have fallen well below their expectations.

The most memorable quote is “we have spent a lot of money over the past two years and delivered, but the new problems are still the old problems”.

We thought we were transforming processes with the technology, but in reality we haven’t really touched the end-to-end process experience”.

We all know the statistics.

80% of companies claim disappointment with the returns on their digital transformation investments.

There is an abundance of technologies claiming to be the ‘silver bullet’ to help drive transformational change.

The reality is more complex and nuanced; there are human, process and organization issues, each of which introduces compromises and trade-offs that are challenging.

Success requires focus on the following key themes, in my experience;

• We need a more productive mindset for transformation. Success is far from assured. We need to engage widely among stakeholders and participants with curiosity & questioning, rather than absolute confidence. If this surprises you, check out the research of Dunning and Kruger.

• Take time to understand and agree “what GOOD looks like. This is a far harder question to answer than we give it credit for. End to end processes are nuanced. There is no single KPI that captures success. It is more of a balanced scorecard of outcomes we need to balance. Invest in this effort. It pays off.

• Focus on Communication, Collaboration, Understanding. End to end business processes incorporate complex multi-dimensional interrelationships. Easy to misunderstand, assume and accept received wisdom. Don’t allow or facilitate “groupthink”.

• Don’t forget the Data. Need we say more? 83% of those surveyed identify that master data does not get the attention it deserves with regard to it’s integrity and governance due to lack of ownership and alignment. Digitization depends on data.

Alignment. Easy to say, much harder to achieve. The functional silos in our businesses create plenty of scope for lack of common understanding and alignment. It’s about influence rather than control, “winning hearts and minds”. Not all key stakeholder groups are inside our organization – customers, suppliers and business partners all have a part to play.

Benefits Case. This is the tangible expression of the level of progress on the points above. If the benefits case does not drive value for all stakeholders, you have failed before you start . . . .

Pareto Principle, 80/20 Rule. How do we identify and execute the tactical initiatives that deliver significant value at a fraction of the timescale, cost and effort of our multi year strategic initiatives?

There are no “Silver Bullets”, “Quick Fixes” or Easy Hacks to success. Yes, sometimes the suppliers exaggerate their claims, their business value and time to value, but it is our responsibility to identify what is desirable and achievable for our business.

We explore this topic in a webcast and summarized in a synopsis. The examples are process specific but the lessons apply to all transformation and change initiatives.

You can read here or watch the recorded video.

Thanks for reading . . .