Shouldn’t Your Digital Transformation Actually Be Transformative?
Say you are the CIO of a large Fortune 200 global manufacturer. You have two lives.
At home you ask Alexa to play your playlist streamed from Spotify. You use your Google Assistant to turn on the lights from hundreds of miles away. Your car tells you to pay attention when you look drowsy. It parks by itself. Your phone warns you if an unknown caller is likely to be spam. Walk your dog? Order dinner? There is an app for that. Flight status? Trouble sleeping? Apps for that too. 1-click, next day delivery at your fingertips.
But then you get to work. And start using enterprise software that was essentially built in the 80’s. For the 80’s! A slightly better user experience if you are lucky. Bloated and unintuitive if you are not. Sometimes you wonder how anything works at all, and how you are still in business. But then you already know the answer – a patchwork of Excel sheets. Microsoft Excel - the duct tape and WD-40 of enterprise software!
You can hear your millennial employees grumble around the water cooler. Why can’t we be more like Amazon, they say. Whiners all! You stared at green screens all day long when you started your career and never complained. But anyway, you call your systems integrator and ask about this ‘digital transformation’ they have been pestering you with. They smell blood and show up at your office the next morning.
They tell a good story. Blockchain in the supply chain (interesting but not applicable to you). IoT in logistics (hmmm, that might work). And a lot of cool new technology to handle all the humongous amounts of data – Kafka, Apache, Hadoop, columnar databases. Clouds and lakes. Digital twins. Self-service analytics? Check. Augmented Reality? Check. And more machine learning than you can shake a stick at. Slideware that looks partly like scenes from the Matrix movies.
Sounds amazing, you tell them. What’s the approximate timeline and budget for all of what you said? That’s the first time the smile breaks from their faces and the mood in the room changes just that little bit. But they are seasoned professionals and bring that grin right back as they say “Well see, here is the thing. First, we got to start with the basics”. That should have been your first indication of something amiss. The meeting continued long into the afternoon.
Later that evening, as you dine with the them at an expensive steakhouse, you sip your glass of vintage cabernet and run through the day’s events in your head. You realize that with all the talk of digital transformation in their appealing presentation, the bottom line was that you were being sold an ERP re-implementation. $$$ millions of dollars and several years of effort. To “set the foundation” as they called it.
And all that cool stuff on machine learning? They have a couple of narrow use cases but much of it is ‘on the roadmap’. Cognitive decision support? It’s part of the product 'vision'. Would the new ERP be on the cloud? They have a cloud version but that’s more applicable for small businesses. With little to no customization possible for your complex large enterprise.
Your head hits the pillow that night, and you lie in a bed that automatically adjusts firmness learning from your sleep patterns. That’s when you start to question yourself:
Why do I need to rip out all my transactional systems that I just spent several years putting in? Maybe some time in the future that might make sense (once that big merger is approved!), but why is that a pre-requisite for digital transformation?
Why does this ‘new’ ERP look so much like the one we already have?
Where do I find all the people within the company to support a multi-year reimplementation? The best subject matter experts already have full time day jobs! Don’t these systems integrators understand that talent is our biggest constraint?
Why do I need to spend so much on integration between tools from the same vendor when it’s supposed to be ‘out-of-the-box’?
Why do I keep getting lectured on garbage in, garbage out? I thought the whole purpose of analytics was to get to the data I need from the data I have. Of course, I understand that minimal data hygiene is important but it can’t be a scapegoat for every project issue.
How can the implementation be ‘agile’ when it takes six months before my users get a first glimpse of a working model? And eighteen months to do a pilot go-live?
How does this help us scale our existing digital efforts? For example, to help our data scientists move from proof-of-concepts on their laptops to fully industrialized solutions in a production environment?
Where is the digital DNA of the system? Something that would initially enable our users to take data driven decisions, but over time, can be embedded into an automated and adaptive process?
What new foundational capabilities and competitive advantage does this give us? What can I do with this newer version of the ERP that I could not do before? What new disruptive business models can be enabled?
With no clear answers, you have one nagging thought before you drift to sleep - Shouldn’t my digital transformation actually be transformative?
Notes
Enough with the role play. This monologue was not meant to be a dig against any particular ERP system or even ERP systems in general. There is little doubt that systems of record (ERP, SCM, CRM, etc.) provide foundational value to an enterprise. But it is questionable whether they provide transformational value in many cases. Especially when you already have these systems in the first place.
If you hired a general contractor to modernize the home you live in, and they suggested tearing down the house first and digging up the foundation, maybe it’s time to find a new contractor?! Just saying.
Disclaimer: This publication does not represent the thoughts or opinions of my employer. It is solely based on my personal views and as such, should not be a substitute for professional advice.