Tuesday, December 12. 2006
Let us start this subject by examining the a few basic questions of business administration.
Why should a business embark on a business transformation?
What should be done to transform the business?
How the transformation process can be executed?
Motives for Business Transformation
Better Customer Service
As we are aware, today’s market is customer centric. The success or failure of a business is driven by how best it can serve its customers. Most businesses intend to adopt best practices and use the latest tools available in today’s information technology world, to facilitate its business with the objective of outdoing competitors, by providing better customer service.
Adaptable to Market Dynamics
Today’s market is highly dynamic and unless you are able to adapt quickly to the changing market, you are left out in the competition. Today’s customers are so demanding that, unless you are not able to come up with new products for your customers you will be left out in the race; and hence the need to have a strong information technology backbone to support your business demands.
Latest Technology tools
Most businesses which have been using information technology for some time now will be aware that customers in today’s market require services from the comfort of their homes and not be constrained by means to satisfy their requirements. In order to stand a place in the modern worlds' business, it is vital for a business to have the latest technology tools/products available in today’s IT world; obviously, you will want to use technology that does not get outdated.
Reduce maintenance overhead
One of the biggest challenges that business face today, is trying to reduce the cost involved in maintaining the IT systems that facilitate their businesses. Most often it so happens that businesses procure software to cater to the requirements of their various business domains or divisions, as a result of which they end up having disparate systems. Maintaining of each of these systems, such as infrastructure cost, support resource costs, etc., chew into a major chunk of the companies profits; and hence the quest for a single solution which caters to various business areas within the organization, is one of the reasons a business would embark on a Business transformation journey.
Provide a working environment that is conducive for employees
While one of the key success factors for a business is customer service, at the other end of the spectrum you will need to keep your employees happy by giving them adequate tools that make it easy for them to use in order to facilitate your business. You would not want to have a system, which takes an awful lot of your employee’s time feeding in information and spending long hours just trying to catch up with his/her work. This often stresses out employees and reduces performance; and this is one of the reasons why today’s businesses lay emphasis on BPR (Business process re-engineering) in order to adopt best practices revolving around the information technology tools that the business uses.
The challenges involved
Some of the challenges involved in a Business Transformation project can be categorized into :
Identifying the right solution
It could be with the best intentions that your business decide to embark on a journey of business transformation; however if the ends are not met you can never justify your means. One of the critical success factors in the business transformation process is to be able to identify the right package that suits your business needs. A compromise in identifying the right tool could only mean ending up with a long term expenses that will be significantly higher what you had budgeted for.
Some factors that play a critical part in deciding the solution you choose are:
Your budget usually will include costs associated with:
a. The technology required (The environment/infrastructure).
b. The solution required (The package that works in line with your business needs).
c. The resources pool (The people involved in implementing the solution).
d. The administration expense (The team managing the implementation).
You could decide to use a solution for the next 5 years before you decide to write it off from your assets (in other words decommission it), or you could decide to use it for a longer period. You would have obviously budgeted depending on this factor.
If you have a longer implementation time line, you can afford to choose a solution that is cheaper, but requires customizations to suit your business needs; however, if you are constrained by a challenging deadline, you might want to choose a solution that fits your business most and requires lesser customization (i.e., an out of the box solution).
Choosing the solution provider is often influenced by the following factors:
a. How experienced is the solution provider?
b. How many other businesses are using their solution?
c. How successful has their track record been in terms of implementing the solution?
d. How well organized is their firm (do they have the required process certifications)?
e. How well equipped are they in terms of maintenance?
f. What is the product road map?
As the wise men put it, it is important to plan your work and work your plan. A project’s success or failure depends on how well the project is planned; of course there is nothing like a perfect project plan, and hence we plan for contingencies. Most often projects are planned around a date driven by the management committee (i.e. the committee investing into the project). Based on this date, the program team work their dates to meet the end date, and often end up with challenges in meeting these dates. In order to avoid such a situation it is important to firstly consider elements that influence your project. A few examples are:
It is important to have a product walkthrough and perform GAP analysis before you start your project activities, as this is a critical factor that influences your delivery dates. You might not necessarily identify GAPS with the solution chosen, but you could have requirements to interface the new world solution with your existing applications that cater to other business requirements. It is important to understand the amount of customization and the time required by the solution provider to deliver them.
If yes, then deliverables from your process consultants have an influence. Most often this function can co-exist with other functions, unless, you decide that you would like to test the solution based on the new world design. This is a critical task, should you decide to do a business process reengineering. The consultants are required firstly to understand your “As Is” process and then derive a “To Be” or your new world design, which requires detailed study. You will have to plan for time and availability of your subject matter experts, who in conjunction with the process consultants will have to draw the blue print for your new world.
This is one area which is most often overseen and could end up causing a project slippage, sometimes to the extent that the project fails. It is important to analyse the source of your information that will have to be migrated into the new solution. You could have a single legacy system from which data needs to be converted and migrated to the new solution, which would require less time for conversion; alternatively, you could be living with disparate systems, some automated and some manual, and would require a significant amount of work to migrate the data into your new world solution.
Testing requirements are most often driven by the complexity of the solution and business requirements. The number of test phases and scale of each test phase would be a critical factor influencing your project plan. You can choose to perform a detailed test execution or a brief test execution depending on the complexity of your business and the compliance requirements from your business world. Further, you can have test phases that can run in parallel and test phases that need to follow a “Waterfall” approach. For e.g., you can plan to have your interface testing, co-exist along with your business or functional test; however, if you plan for an integrated test phase then it depends on when you can complete both your functional and technical test. Most large businesses also would plan for a separate performance test phase and operations test phase. These test phases would play a major part in project planning.
If the solution you choose requires customizations, then you end up having a “Bespoke” version of the solution and hence might want to have an intense test plan execution.
It is important to derive your CSF (Critical success factors) and identify milestones in the project which need to be achieved. These would act as logical points during the course of the project to do a health check on your project performance.
Obviously, these are just factors that you will need to give emphasis while planning your project; nevertheless, you could have business reasons or requirements to decommission an existing solution by a given date which also drive decisions to complete a project within a stipulated time frame. If you have a challenging deadline it is wise to scope your project accordingly. It would be unwise to bite more than what you can chew, wouldn’t it?
Identifying key players and responsibilities
While project planning is an important aspect of any project, it is equally important to identify key responsibilities and associate suitable resources to execute those responsibilities. Typically within a project starting in a chronological order, you would want to have the following roles and layers:
Within each management layer, it is important to make sure that you have planned for continuity. You would not want to end up project delays due to unavailability of resources, especially if the team leads, and work stream leads are indisposed. Hence it is advisable to apply a “Two in a Box” concept, meaning all key roles will be executed by two individuals, both complementing each other during the course of the project. You could choose to have one of the members from your organization playing they role, while the other being an external resource, or have both members from your organization. It helps to have external resources who are proficient in certain areas involved in the project. They could bring in new ideas based on their experiences and also provide un-biased opinions.
A successful project is one where the implementation of a solution is accepted by end users or business users. If you implement an excellent solution for your business which takes care of all aspects, be it business related or IT related; however, fail to get end users or business users to accept the new solution and use it effectively, then the project is clearly a failure though a solution is implemented.
This is one area where most business transformation projects are affected. Key elements for a successful change management include:
Who should drive this initiative?
This is often a dilemma that most projects involving business transformation face. There are obviously two key parties involved in this project from the business undergoing the business transformation, one being the Business Users and the second being the IT Team. Most often these projects are driven by the IT team as the initiative is towards business transformation through effective use if information technology. Such projects usually end up meeting the IT requirements but often fail to see the business angle and result in failing to meet business user requirements.
It is important to strike a balance between IT and business users, especially in such projects. The program team should comprise of Business users involving SME’s, as well as, IT or Technical team. Both these teams need to work in conjunction if the project needs to be successful. Issues around Process Workflow, Usability, Data analysis, etc., can often be judged well by Business users, while areas such as Application Scalability, Stress Test, Operational testing etc., are areas which the IT team can analyse better.
Resources conversant with both areas (i.e. Business as well as IT), if available, will be able to contribute significantly to the success of such projects.
While one could end up writing a thesis on this subject, these are just a few critical aspects, which when given due consideration could make a business transformation project successful. Of-course no two experiences are the same and this is one area where one can learn lessons from every project.
Business Transformation - A Challange?
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