6 questions you must ask before starting your operation’s digital transformation

Implementing new operational software or technology is a stressful, risk-filled undertaking for any business, but it is a necessary part of any digital transformation journey.

In projects like this, the costs are high. Everyone has their own expectations about the benefits. And the outcomes are uncertain. Such projects are risky and will require involvement from multiple stakeholders from both inside and outside your business.

 With limited human resources and time, who do you choose to implement your software project?

a) the vendor who knows the software product inside-out?

or

      b) an operational delivery partner who knows a wide range of products and systems and has taken the time to work with you to develop a digital transformation strategy

As operational delivery partners ourselves, we’re familiar with the challenges businesses face when implementing software or system changes. Based on our experience, we’ve come up with 6 questions that businesses should ask before they implement their next project.

But first, it’s worth pointing out the complex world of vendor–integrator–customer relationships:

Vendors need delivery partners

Vendors and delivery partners are not mortal enemies. In fact, they call each other ‘partners’ because they share a symbiotic relationship. Each has a dedicated strength and commitment to deliver the best outcome for the customer. But they serve two very different functions:

 Vendors develop and sell software solutions
 Delivery partners deliver outcomes for your business

Who implements vendor software?

Nearly all software vendors have a market strategy that relies on partners to deliver projects for the customer. This lets the vendor focus on their key business outcome: selling and developing products. Sometimes vendors will lead the project too, but this isn’t their core business.

The point being? Before you choose who’ll deliver the project, understand their business drivers; asking the vendor to implement the software themselves may be counterproductive to their strategy. If they primarily operate on a partner model, why would you ask them to implement it?

Now to our list: The 6 questions you must ask before starting your operation’s digital transformation

1. Is new operational software part of your ‘transformational strategy’?

Cyber incidents and new technologies were recently named as the top business risks for Australia. The software changes you implement today must be futureproof. 

How’s this relevant?

A digital transformation project is more than just replacing old software with new software.  It should be part of a strategy that begins long before you drive down to the vendor supermarket with a credit card. This process should involve everyone from executives, IT, technical and customer relations personnel. External advice on industry best-practice, technology trends, risks and opportunities will also make you better placed to make decisions.

In short: Vendors will know about their tech, but may not know about other tech, or think about the implementation in the context of the of the wider and more long term business strategy. Delivery partners – particularly those who specialise in digital architecture roadmapping  – can help nail down this strategy and pull together different departments in the business.

"We can really bridge the gap between the operational side of the business who are the primary stakeholders in a system, and their IT people. We're very good at bringing those together and recognising the amount of effort that each of those will need.”– Damian Jolly, Principal Consultant Nukon.

The vendor's definition of a successful digital transformation project may be different from yours.

Vendors see success in product sales and addressing bugs and issues in the software. An organisation's definition of project success is likely to include a broader set of goals, outcomes and priorities.

Software implementation isn’t just running setup on a server, configuring software, turning it on and saying ‘off you go’. It must also address: user adoption, change management, risk management, integrations, testing, operational disruptions, roll-back, business security and supportability.

In short: Vendors see success in product implementation but businesses see success in broader terms. Partners will align their success metrics with the businesses’ strategy. 

“A partner is interested in the customer’s strategy and aligning the solution to that. It's in our best interest to do that. A vendor is interested in their component of solution and not necessarily in delivering that whole strategy.”– Damian Jolly, Principal Consultant Nukon.

3. Do they have the right project management approach?

Based on industry statistics “less than 50 per cent of IT projects finish on time and on budget”. Such projects have an average cost overrun of 59 per cent and time overrun of 74 per cent. 

Why does this happen? Inadequate project management. AITS report that ‘68 per cent of projects don’t have an effective project sponsor to provide clear direction or help address problems’. Project management is not an afterthought. It should be top of mind.

We know that the vendor’s business model isn’t necessarily geared towards project delivery. The project lead is likely a time pressured, pre-sales engineer who doesn’t have the resources required to lead the project effectively (we'll cover this more in question 6). They may also use the traditional ‘waterfall’ method of project delivery, which isn’t ideal for software integration.

In short: Vendors are specialists at their software, but may not be geared towards project management and delivery best-practice.  Most vendor business models rely on delivery partners to take care of this aspect. This allows them to focus on the product and customer service after installation.

4. How will (unavoidable) integration problems be tackled?

Let’s explore three potential problems that could come up:

Problem 1: software issues such as installation errors and bugs

The vendor is the best resource to solve software errors BUT partners have deeper connections with vendor technical support. They can often work directly with the multiple vendor representatives to access quicker solutions. Plus, they’ll address issues around how the vendor software interacts with other systems and software because it is their responsibility to do so.

Problem 2: your priorities have changed

Vendors are more likely to be stuck in a capital expenditure sales arrangement with fixed budgets. This limits their ability to be flexible. The result is a more rigid approach to the roll out of the project.

A partner who uses the agile project management methodology will be able to respond to changing needs because the project is broken into smaller, more manageable chunks. The result?

More control over:

• Iteration timeframes – pause the next installation if you need to keep production on.
• Flexibility – make changes to the next iteration, such as “We don’t need X functionality, we need Y”.
• Change management – staff adapt to small, regular releases rather than one large, instant change.
• Budgets – for example, an IT server component of software can be charged to an IT budget line not the operations line.
• Reporting – because smaller iterations are easier for us to get our heads around.

Problem 3: a piece of technology isn’t working the way it should

There's a myth that if you single-source manufacturing software from one vendor, it will address all the requirements. That's just not the reality today. No single vendor solution covers everything and integration problems will crop up.

Vendors can only solve problems from within their own product range. Yes, there are hundreds of ways to fix a problem but only a few will meet best practice, standards and fit your purpose.

 Good delivery partners have access to many ‘best-of-breed’ products, so there are more chances of finding a suitable solution. These could be products from smaller vendors who specialise in doing one product well, or products from larger vendors. The point is, delivery partners will search for a solution based on your needs and will not be limited to a single vendor’s product suite.

 In short: As it’s their core business, delivery partners know how to integrate vendor products with different operational software and systems. Turn to them for this expertise, rather than going to the vendor for something outside their core focus. What's more, a delivery partner can respond to your needs in a more flexible manner because their processes are designed to suit the requirements and challenges of implementing in a live operating environment.

5. Has the integration been scoped correctly?

Before even thinking about implementing a new piece of software, the integration with other systems needs to be scoped in detail. Overconfidence and blind faith in the vendors integration promises is a widely reported mistake clients make in vendor-led integrations.

The fact of the matter is that vendor software solutions are targeted to a mass audience and therefore often can’t meet the customer’s entire needs. This can lead to an endless list of customisation requirements and associated costs. Plus, vendors have a tendency to play down the integration requirements in their sales pitch.

Why?

Integration is difficult and no one wants to hear it will be challenging. We want it to be easy. Every time. So the vendor will paint a blue sky picture of how the project will run.

Mr Jolly says he sees this problem often. "Time and time again we see vendors quoting very vanilla integration paths that don’t necessarily address the customer’s needs,” he says.

“We don’t have a vested interest in playing anything down because we're responsible for delivering the project to meet the strategic outcome. We're going to call a spade a spade.”

 In short: Commonly, vendors supply the product, while partners will deliver and integrate it across your business. Partners will act as an intermediary between you and the vendor; plus they aren’t afraid to say when there’s a problem.

6. Is there a dedicated integration and support team?

The success of any project relies on the people driving it, not just the product. In most cases time-poor sales engineers and support engineers deliver vendor-led projects. They’re likely working on multiple accounts and under considerable stress to deliver on time.

Why is this a problem?

It follows on from our other points: Vendor sales engineers aren’t geared towards project management. They have different ideas of success and may not understand (or will underplay) the integration requirements.

This can lead to another common problem: there’s a gap in expectation between how much effort is required from the side of customer to manage the integration successfully. Vendors often just work on assumptions which aren’t communicated adequately to the client. If you don’t have the resources to give to the project, and neither does the vendor there’s a high chance of failure.

In short: Time-poor vendors can rely on the company’s internal resources to manage an implementation, so be clear on resourcing expectations before starting. Delivery partners use specialists from project management, operational, manufacturing and IT backgrounds. This ensures the project is well-resourced and that they understand and involve all departments in your business.

Getting brilliant project outcomes

Involving an operational delivery partner in your operational software project might seem like adding unnecessary extra layers (and cost) into the mix but it’s more likely to save money and deliver value quicker.

Great digital transformation outcomes occur when delivery partners and vendors work together to ‘do what they each do best’. It’ll mean you futureproof operations, reduce implementation risk and complete the project on time and on budget.

Implementing new software is only half the battle. Read our guide to driving effective change for how to get the most out of employees in your change programs.