Digital Transformation, Change Management, and ERP Implementation Advice from 6 Experts

Digital transformation is not just a trend; it's a fundamental shift in how organizations operate and compete in the modern world. My team and I at Third Stage Consulting Group have seen firsthand how digital transformations can either propel businesses to new heights or, if mismanaged, lead to significant setbacks. This complex journey impacts every aspect of a business, requiring a thoughtful approach that goes beyond merely implementing new technology.

In a recent live interview, I had the pleasure of hosting six experts who will be speaking at our upcoming Digital Stratosphere conference in Denver, Colorado. These thought leaders shared invaluable lessons on what it takes to succeed in digital transformation, touching on topics such as strategy, people, culture, and legal considerations.

In this article, I distill these insights into practical advice that you can apply to your own digital transformation initiatives. You can also watch the full podcast episode and panel interview here:

Understanding the Importance of Vision and Strategy

A successful digital transformation begins with a clear vision and strategy. Without these foundational elements, organizations risk drifting aimlessly through their transformation journey, reacting to changes rather than proactively shaping their future.

Greg Benton , Chief Strategy Officer at Third Stage Consulting Group , emphasized the necessity of establishing executive alignment and creating a comprehensive business plan. "Digital transformation is no longer just about implementing an ERP system," Greg explained. "It's about moving towards a desired future state where technology, people, and processes are fully aligned."

Greg's point is crucial because many organizations fall into the trap of focusing solely on technology, neglecting the broader implications of transformation. A well-defined strategy should outline the organization’s goals for the next five to seven years, incorporating not only technological advancements but also changes in organizational culture, processes, and business models.

For example, if your goal is to enhance customer experience through digital means, your strategy should detail how technology will enable this transformation, how employees will be trained to deliver the new experience, and how success will be measured. This holistic approach ensures that all aspects of the organization are moving in the same direction, reducing the risk of misalignment and failure.

People First: The Foundation of Digital Transformation

The importance of a people-first approach in digital transformation cannot be overstated. Ema Roloff , Founder of Roloff Consulting , has built her career around this principle. "You just won't get adoption if you don't focus on the people," Ema stated. "When technology is implemented without considering the people who will use it, the project is doomed from the start."

Ema’s insights are rooted in her extensive experience in software sales, where she observed that the success of large-scale transformations was often determined by how well the people side was managed. She argues that organizations must start with people and processes before even considering the technology. By understanding the needs and concerns of employees, and involving them in the transformation process, companies can foster a sense of ownership and commitment that is essential for successful adoption.

One example Ema shared involved a healthcare organization that was implementing a new electronic health record (EHR) system. Initially, the project was met with resistance from medical staff who felt the new system would complicate their workflows. However, by involving these staff members early in the process, listening to their concerns, and demonstrating how the new system would ultimately make their jobs easier, the organization was able to turn skeptics into advocates. This people-first approach not only ensured successful adoption but also improved overall job satisfaction and patient care.

Building a Future-Fit Organization:

In today’s rapidly changing world, organizations must be agile and resilient. Friska Wirya , author of "The Future Fit Organization," provides a blueprint for how companies can achieve this. A future-fit organization is one that doesn’t just react to change but is proactive in planning, resourcing, managing, and sustaining it.

"It’s about building organizational muscle, agility, and resilience," Friska explained. "A future-fit organization is committed to continuous innovation and growth. They take change seriously, and they’re not just talking about it—they’re doing it."

Friska’s concept of a future-fit organization is particularly relevant in the context of multinational digital transformations. In such projects, cultural sensitivity and inclusion are paramount. She emphasized the importance of local champions—individuals within each region who understand the local culture and can advocate for the transformation. These champions play a critical role in ensuring that the global strategy is effectively localized, increasing the likelihood of successful adoption.

For instance, in a global manufacturing company, a one-size-fits-all approach to digital transformation could have led to resistance in certain regions. However, by appointing local champions in each region who understood the unique challenges and cultural nuances, the company was able to tailor its approach, ensuring that the transformation was embraced across the board.

Friska also advocates for a "fail forward" culture, where organizations celebrate failures as learning opportunities. This approach not only fosters innovation but also builds trust within the organization, as employees feel safe to experiment and take risks without fear of retribution.

Multinational Transformations: Navigating Complexity

Managing digital transformation in a multinational organization presents unique challenges. Aaron Patterson , Executive Vice President for EMEA at Third Stage Consulting Group , has extensive experience in this area and offered valuable insights on how to navigate these complexities.

"Effective communication is key," Aaron stressed. "You need to be consistent and transparent, ensuring that the project vision and strategy are understood at both the global and local levels."

One of the biggest challenges in multinational transformations is balancing global standardization with local flexibility. While a standardized approach can drive efficiency and consistency, it can also lead to resistance if local needs and cultural differences are not considered.

Aaron shared an example of a global financial services company that was implementing a new ERP system across its operations in North America, Europe, and Asia. The company initially attempted to roll out the system uniformly across all regions. However, they quickly encountered resistance in Asia, where the system’s standardized processes did not align with local business practices.

Recognizing the need for flexibility, the company adapted its approach, allowing for certain local customizations while maintaining the overall global framework. This flexibility not only increased adoption but also enhanced the effectiveness of the ERP system in meeting the unique needs of each region.

Aaron also highlighted the importance of local champions, echoing Friska’s earlier point. "Having local advocates who understand the regional context is crucial," he said. "They can help bridge the gap between the global strategy and local execution, ensuring that the transformation is both relevant and effective."

The Legal Perspective: Avoiding Common Pitfalls:

Digital transformation projects are complex, and the legal aspects of these projects are often overlooked. Marcus Harris , an attorney at Taft Stettinius & Hollister LLP specializing in ERP and digital transformation-related agreements, shared his perspective on the legal considerations that are essential for success.

"Many projects fail because of unreasonable expectations and a lack of due diligence," Marcus observed. "Clients often don’t know what they’re getting themselves into. They don’t understand how long an implementation should take or what it should cost."

One of the most critical steps in any digital transformation is setting realistic expectations and ensuring that contracts are detailed and clear. Marcus emphasized the importance of having a well-drafted master services agreement (MSA) and statements of work (SOW) that outline the deliverables, milestones, and schedules.

"These documents are not just legal formalities—they’re essential tools for managing the relationship between the client and the vendor," Marcus explained. "They provide a clear framework for how the project will be executed and what happens if things go wrong."

Marcus also cautioned against the dangers of relying too heavily on vendors’ promises without fully understanding the implications. He shared a case study of a manufacturing company that signed a contract with a major ERP vendor based on the vendor’s assurances that the software was "out of the box" and would require minimal customization. However, during the implementation, it became clear that significant customization was needed, leading to cost overruns and delays.

To avoid such pitfalls, Marcus recommends conducting thorough due diligence before signing any contracts. This includes understanding the full scope of the project, the level of customization required, and the potential risks. By taking these steps, organizations can protect themselves from costly mistakes and ensure a smoother transformation process.

The Role of Phase Zero: Laying the Foundation for Success:

One of the most critical yet often overlooked stages of digital transformation is what we at Third Stage Consulting call "Phase Zero." Greg introduced this concept during our discussion, explaining that Phase Zero is all about preparing the organization for the upcoming transformation.

"Phase Zero is about getting the organization ready for the significant changes that lie ahead," Greg said. "It’s about making sure that everyone understands the objectives and strategy, and that the organization is aligned and ready to move forward."

Phase Zero involves several key activities, including assessing the current state of the organization, defining the future state, and developing a detailed roadmap for the transformation. It’s during this phase that organizations should also conduct a thorough analysis of their data, processes, and systems to identify any gaps or areas that need improvement.

For example, a large retail chain that was preparing to implement a new omnichannel strategy used Phase Zero to conduct a comprehensive assessment of its current systems and processes. This assessment revealed several critical gaps, including outdated point-of-sale systems, fragmented customer data, and inefficient supply chain processes. By identifying these issues early in the process, the company was able to address them before beginning the implementation, ultimately leading to a more successful transformation.

Phase Zero also includes establishing governance structures and identifying key stakeholders who will be involved in the transformation. This ensures that there is clear accountability and that everyone understands their roles and responsibilities.

Greg emphasized that while Phase Zero may seem like an additional step that slows down the project, it actually saves time and resources in the long run. "By taking the time to properly prepare, you can avoid many of the common pitfalls that lead to project failure," he explained. "It’s about setting yourself up for success right from the start. Skipping Phase Zero might seem like a way to save time, but it often leads to costly mistakes, rework, and extended timelines that could have been avoided with proper planning."

Greg’s analogy of building a house resonates here—just as you wouldn’t start construction without a blueprint, you shouldn’t dive into digital transformation without a solid Phase Zero foundation. This phase also includes early stakeholder engagement, which ensures that all voices are heard and considered before the project moves forward. This helps in aligning the organizational culture with the transformation goals, which is critical for long-term success.

Overcoming Resistance: Creating a Culture of Change:

Resistance to change is one of the most common obstacles organizations face during digital transformation. Even the best-laid plans can falter if the people within the organization are not on board with the change. Friska discussed strategies for creating a culture that embraces change, emphasizing the importance of trust and transparency.

Friska introduced the concept of a "fail forward" policy, where organizations celebrate failures as learning opportunities. This approach not only fosters innovation but also helps to build a resilient and adaptable workforce. "If you want to build trust, your actions need to match your words," she said. "Organizations need to create an environment where failure is seen as a stepping stone to progress."

In addition to a fail-forward culture, Friska suggested implementing a "change sabbatical," where employees take time off from their regular roles to work on a transformation-related project. This not only breaks down silos within the organization but also encourages cross-functional understanding and sparks new ideas. For example, a marketing manager might spend a few months working with the IT team to better understand the technical aspects of a new CRM system, which in turn improves their ability to leverage the system in their own department.

Creating a culture of change also involves recognizing and rewarding those who embrace new ways of working. By celebrating successes, no matter how small, organizations can motivate employees to continue adapting and innovating. This cultural shift is crucial for ensuring that digital transformation is not just a one-time project but an ongoing process of continuous improvement.

Leveraging Technology: Avoiding Random Acts of Technology

One of the key themes that emerged during our discussion was the danger of focusing too heavily on technology at the expense of people and processes. Ema referred to this as "random acts of technology," where organizations chase the latest technological trends without a clear strategy or understanding of how these tools will actually benefit the business.

"AI is a perfect example," Ema noted. "While AI has tremendous potential, many organizations are implementing it simply because it’s the latest buzzword, not because it solves a specific problem or enhances a particular process."

To avoid this pitfall, Ema advised organizations to start by identifying the problems they are trying to solve and then determining whether technology is the right solution. This approach ensures that technology is used as a tool to enhance business processes, rather than being an end in itself.

For instance, a large insurance company was considering implementing AI to streamline its claims processing. However, after conducting a thorough analysis, the company realized that the real issue was not the lack of AI but rather outdated manual processes that could be automated with simpler, less expensive technology. By focusing on process improvement first, the company was able to achieve significant efficiencies without the need for a complex AI implementation.

Ema also emphasized the importance of digital literacy within the organization. "Having a workforce that understands the basics of technology and how it can be applied to their work is crucial," she explained. "This digital literacy empowers employees to make informed decisions and helps prevent the implementation of unnecessary or ineffective technology."

The Importance of Continuous Learning and Adaptation

As digital transformation is an ongoing journey, organizations must commit to continuous learning and adaptation. This includes staying up-to-date with the latest technological advancements, industry trends, and best practices.

Aaron highlighted the importance of continuous improvement in multinational transformations. "The world is constantly changing, and so must your organization," he said. "You need to be continuously evaluating your processes, systems, and strategies to ensure they remain relevant and effective."

Aaron suggested that organizations establish regular review processes to assess the effectiveness of their transformation efforts. This might include quarterly reviews of key performance indicators (KPIs), annual audits of systems and processes, and ongoing feedback loops from employees and customers.

For example, a global logistics company that had implemented a new transportation management system (TMS) conducted regular post-implementation reviews to assess its impact. These reviews revealed that while the system was working well in North America, it was not fully meeting the needs of their European operations due to differences in regulatory requirements. By identifying this issue early, the company was able to make the necessary adjustments and avoid potential disruptions.

In addition to internal reviews, Aaron also recommended that organizations stay engaged with industry forums, conferences, and peer networks to learn from the experiences of others. "Digital Stratosphere is a great example of an event where you can learn from industry leaders and peers," he said. "It’s an opportunity to gain new insights, share best practices, and stay ahead of the curve."

Conclusion: The Path to Successful Digital Transformation

Digital transformation is not a one-size-fits-all endeavor. It requires a strategic, people-first approach that is tailored to the unique needs and challenges of each organization. The insights shared by this expert panel provides a comprehensive roadmap for navigating this complex journey.

From the importance of a clear vision and strategy, to the need for cultural alignment and legal diligence, these experts have highlighted the critical success factors that can make or break a digital transformation. By focusing on people, embracing flexibility, and committing to continuous learning, organizations can not only survive but thrive in the digital age.

As we prepare for the upcoming Digital Stratosphere conference in Denver , I encourage you to reflect on these lessons and consider how they apply to your own organization. Whether you’re just starting out or are well into your transformation journey, the strategies and advice shared here can help you achieve your goals and avoid common pitfalls.

Remember, digital transformation is not just about technology; it’s about creating a future-fit organization that is ready to adapt, innovate, and lead in a rapidly changing world. I look forward to continuing this conversation at Stratosphere and helping you on your journey to digital transformation success.

You are of course invited to the Digital Stratosphere conference, which you can join in person or virtually. Below you can learn more about the agenda, speakers, and registration info. I hope to see you there!