Introduction

When we are embarking on Digital Transformation, we are looking for the easy answers that will make transformation easier for us.

And this drives us towards a lot of misconception.

Let us try to explore how to make a Digital Transformation successful?

Hence I will take you to a journey about the top 10 misconceptions that you should avoid and watch out for in your Digital Transformation implementation.

1.Technology drives Digital Transformation

One of the most fundamental misunderstandings about Digital Transformation is that digital and technology are somehow going to drive the transformation.

There is a great amount of technological innovation that has happened in recent years.

The opportunities are endless so technology can certainly enable change

but it is not the technology that is going to drive the transformation.

Then what should drive the transformation?

The more successful ones are the things related to operational improvements

and organizational improvements

and also things which are aligned with your overall strategy.

So be sure not to fall into that trap of thinking that just because you bought the shiny new technology

that somehow is going to drive the transformation for you.

 It is still your business needs, your organizational needs, and your overall strategy

that should be driving your transformation not the other way around.

2.Agile is faster than Waterfall

In the world of software development and even start-ups the whole concept of agile is becoming more and more popular.

And so organizations are shifting their mind-sets from the traditional Waterfall approach to new age Agile approach.

Waterfall approach basically defines an implementation as spending your time up front defining your processes clearly, defining your requirements clearly

and having a cut off before you move on to the next stage of your project.

Whereas Agile is more focused on picking off little pieces of your organization, little pieces of technology

and deploying those quickly.

Now in theory, it sounds like the Agile approach is going to be faster

but what we found with enterprise-wide digital transformations is that if you start off with an agile mind-set

that is actually going to lead you faster down on an unclear path.

However it is going to be easier to get lost and you are just going to get lost faster in your transformation.

Whereas if you take the more traditional Waterfall approach even though it has a negative connotation to a lot of people

and you take the time to define a blueprint for what you want your overall transformation to look like in terms of your operations

and also in terms of your organizational improvements then you can shift to an Agile mind-set in terms of how you execute that roll out.

Which is better Agile or Waterfall?

So be sure not to get too enamoured with Agile or think that Agile is somehow going to solve all your problems.

Agile may be one arrow in your quiver but it is not necessarily the silver bullet you are looking for

so be sure to use Agile if you’re going to use it selectively

but don’t rely on it as the only method you use to speed up your implementation.

Sometimes starting off slower can actually speed things up later on.

3.Cloud is cheaper than On-Premise

One of the most common misconceptions in the market is the fact that a lot of vendors are out there selling this idea that Cloud deployments are cheaper than On – Premise deployments.

And there is also a further allegation that Cloud systems are cheaper in the long term even post implementation.

However we found that this is simply not true in the case of Cloud based Digital Transformation.

On one hand you may be saying that we are getting rid of our On – Premise servers.

We do not need as big of an IT staff.

This is partially true.

Although we do find that most organizations fail to realize those cost savings.

But the bigger challenge is that the problem with Cloud solutions is that you have high ongoing annual costs

that are going to be higher long term than your initial purchase of On – Premise systems.

So it is a lot like leasing versus buying a car.

Difference between On-Premise vs Cloud

When you lease a car you have a steady ongoing payment

and you have less flexibility as to what you can do with the product that you are leasing.

Same is true for cloud versus buying a car where you have a bigger upfront payment

but then you don not have a monthly or annual payment even though you might have some maintenance expenses to manage.

And that is a lot like On – Premise.

However please note that I do not want to suggest that Cloud is not a good solution because most vendors are going that way.

Or to say that most customers want Cloud solutions.

But my suggestion to you is that go in with eyes wide open and with clear understanding

that you are probably going to spend more money on your Cloud deployment

as well as on your long-term ownership of that Cloud solution than if you had On – Premise deployment.

Now you may be getting more value out of it and it is probably likely that you are getting a higher ROI out of that higher cost but do not go in thinking that you are going to save money because we find that most organizations simply do not save money in the long term.

4.Cloud technologies are better options

So just building on this whole misconception related to Cloud, we discussed about the cost side of things

but there is also a misconception that cloud is somehow better than On – Premise.

First of all it all depends on what you mean by better.

For some organizations it is clearly better.

For some organizations it is not.

But I think the biggest pitfall that organizations fail to realize is that cloud solutions simply are not as mature as On – Premise.

However someday this statement will be completely obsolete and you can delete this comment at that point in the future.

But right now where we are sitting here in 2022, Cloud systems simply have not developed to the point of what the old On – Premise systems have

and the reason for that is not because Cloud technology is somehow inferior,

it is simply because the software vendors had years and decades of R&D and innovation in On – Premise solutions

and now they are trying to shift everything over to the Cloud

and it is just taking them time to get to the point where they were with On – Premise.

So again even if Cloud is the right answer for you and that is the direction you are going to go in with a realistic understanding

that you are probably going to have some gaps.

The products probably are not going to be as mature as you would like.

And you want to make sure you go in with a full understanding of where those weaknesses might be.

5.Easy upgrades

Another common misconception perpetuated by the software and technology industry is the fact that if you upgrade to a newer version of the solution that the vendor provides, it is going to be an easy upgrade.

It is going to be a simple lift and shift because you are just shifting from one platform to another.

As I mentioned before, the cloud solutions are largely rewrites of new technology for a new platform in the cloud

and so shifting from an on -premise system to a cloud system it is not as easy as most vendors will tell you.

So for example, if you are a SAP customer and you are using ECC or if you are a Microsoft customer and you are using Dynamics AX and shifting to SAP S4 HANA or Microsoft D365 then it is not an upgrade.

That is a re-implementation.

Yes there may be some common look and feel that looks familiar to you because you are used to SAP or Microsoft or whatever your product is but you are largely going through a re-implementation of an entirely different product, entirely different architecture, entirely different way of deploying so just recognize that you are implementing a new solution regardless of whether you have used that same vendor in the past or not.

It is generally more of a bigger shift and a bigger change than most organizations realize.

6.Change is going to be easy

One of the most dangerous hidden misconceptions that we see in Digital Transformations is the phenomena of organizations thinking that change is going to be easy.

Their people are ready for change.

Their people want the change.

They do not like their old systems.

They do not like their old processes.

So change management is not going to be a problem.

How hard can it be?

They are all on board.

They want to move forward and that is probably true.

I rarely doubt that statement when we are dealing with new clients.

But what I do doubt is that is going to be the reality what typically happens is people start off excited but then they get less and less excited as the project goes on because they realize how painful the change is really going to be.

So no matter how excited your team might seem right now wherever you are in your journey,

chances are they will be less excited over time and even the best intention employees are going to resist change even if it is unintentionally.

So you want to make sure you have a very solid change management plan and invest just as heavily in organizational change as you do other parts of your digital transformation to overcome this misconception.

7.Single ERP System is going to solve all problems

If your Digital Transformation entails some sort of ERP technology enterprise resource planning like SAP, Oracle, Microsoft whatever the case may be you are probably hearing a message that our system our single ERP system can solve all of your problems.

It can fully automate your entire organization from order to cash, procure to pay, customer relationship management, everything you need can be addressed by our ERP system.

However it is a great sales message.

It is what vendors typically will use.

But you just need to understand that by definition ERP systems can provide a broad set of capabilities

but it is impossible for them to be everything to everyone within your organization

and certainly within other organizations as well.

So inevitably you are going to have trade-offs when you implement new ERP technology.

There will be strengths in areas where the technology is a great fit for your organization

but you will have areas of your organization where the technology is not as great of a fit and that becomes an organizational change issue as well as a technology issue along the way.

So be sure you understand realistically that if you go with an ERP system, if that is the way you want to go, maybe the right answer for you but still look at the dark side of that, look at the risk, look at what the cost implications are as well as what the change management implications are because that is where the project will either succeed or fail.

It all depends on how well you address those risks so be sure you fully understand that a single ERP system is no more of an easy button than any of the other things we have dealt here so far.

8.Pre – configurations accelerate deployment

Another misconception is this idea that a pre-configured solution off the shelf is somehow going to speed up your implementation.

In theory, that is sort of true.

Certainly from a technology perspective to the extent that the vendor really does have pre-configurations.

Although I will say that.

That concept is oftentimes oversold and under-delivered by vendors.

But let us just say in theory your vendor really does have pre-configurations either an industry pre-configuration or pre-configured workflows.

They can just work off the shelf out of the box from a technical perspective.

That is true.

However it will speed up the deployment but what it does not speed up, in fact, it might actually slow things down is as it relates to adjusting your business processes to those pre-configurations and adjusting your people to those pre-configurations, that is what takes the most time and effort.

It is the people on process side of things.

So even if you could speed up or even if you do speed up the technology side of the equation you might be speeding that work stream up but you are extending the other parts of the implementation on the people and process side of things.

So be sure you just go in with eyes wide open.

Again understand that it is a sales tactic.

If they have pre-configurations and they really exist.

Great, that is a good starting point.

I would not say to abandon that concept but just understand that you are going to have to make up that time and effort and focus elsewhere in the transformation.

9.Big system Integrators reduce risk

When I was working as Project Manager in Rockwell Automation in the late 90s into the early 2000s a common saying we would hear is no one ever got fired for hiring IBM to handle their transformation projects except I learned over the years that plenty of people have gotten fired for hiring IBM as well as  Accenture and Deloitte and some of those other big names that you might feel safe with just because it is such a big well-known name and because you have hundreds of thousands of people on the bench that could support your project.

Big system integrators, we found, are no more likely to reduce risk than other types of solution providers.

In fact, I can make a pretty strong argument that your risk is actually increased by using a big system integrator simply because you are going to pay for that system integrator.

You are going to pay for an army of consultants that are full-time dedicated to your project.

Big system integrators are very good at getting more and more people on your project.

That is their job is to staff consultants on your project.

That is how I started my career right out of IIT Kanpur, I joined Debikay Electronics at Kolkata in 1980 and I was put on a project where I probably did not need to be on that project but they found one to put me on and I started handling that project full-time from day one.

I was getting trained on the job.

Mid Tier System Integrator

This is  just an example from my background but even beyond that going forward over the last 40 some years I find that same phenomena that system integrators  generally are going to cost you more when they are one of the big names so if you’re a big global organization and you feel like you need that global footprint you certainly want to consider those big system integrators  like Accenture, Deloitte, Capgemini, Ernst & Young, IBM, whoever it may be but it is also important and imperative to look at those mid-tier providers as well such as Sofcon Systems India Pvt. Ltd..

There is a lot of really good mid-tier system integrators that may not have the best known name.

But oftentimes they can get the more experience, better resources because the big system integrators are better known for hiring kids out of college whereas the mid-tier solution providers are often the ones that will get the senior people that want to stay in consulting or project management side but they do not want to work at one of the big system integrators.

So really look at those mid-tier options and really fully compare your options to make sure that you are getting the best option for your organization.

10.Your System Integrator is Your Project Manager

Tenth misconception is that your system integrator is your project manager.

This is a common mistake.

It may sound like I am splitting hairs here but it is important to split these errors in this example.

So what I mean by this is oftentimes organizations pick a technology and then they go hire a system integrator and that system integrator is viewed to be the outsourced model that is going to manage the entire project and do the project for them.

There are two problems with this approach.

First of all, you need to have ownership of the project as well as you need your people just as involved in the project if not more than the system integrator.

Second of all, it is important to recognize that the system integrator is only providing project management as it relates to the technology of the software.

So if you are deploying an ERP system or CRM or whatever the case may be that is their job is to focus on the technology but you as an organization need to focus on the entire transformation.

You need to look at the business process model, the overall strategy, the organizational change strategy, the data migration strategy, the overall solution architecture, your end-to-end business processes, all the things that your system integrator may say they do but they are doing it in the context of technology and you need to look at everything outside of that.

Project Manager

So really resist that temptation to fully outsource a project to a system integrator and resist that temptation to assume that the project manager from the system integrator is going to manage the entire thing.

You should have someone sitting on top of the system integrator as well as other work streams within your project managing all of the internal and external resources as well.

So I hope this has helped dispel some of the common misconceptions related to the myth of the easy button.

There is no easy button.

There is no easy answer.

And if it sounds like it is an easy button or silver bullet type of answer,

then chances are it is probably not real.

I hope you found this information useful.

Please let me have your feedback.

                                                                                                    By Digital Prabhat

Resource: Eric Kimberling-Digital Transformation /

Third Stage Consulting Group

               www.thirdstage-consulting.com