Arguably, the concept of ‘digital transformation’ has not always been easy to understand. It’s been thrown around for the past few years to describe anything from implementing disruptive technologies, moving from paper to digital, or simply applying digital technology to any aspect of business.
No matter what you mean when you use the term, competitive organisations are faced with having to ‘keep up or get out’ when it comes to technology.
Some say digital transformation of business is about meeting market demand:
“[It] closes the gap between what digital customers already expect and what analogue businesses actually deliver.”
Others say it’s more about:
“‘fungibility’: the ability for something to be changed.”
No matter how you define ‘digital transformation’, these definitions are reflective of any major change project that implements technology.
That is, they’re borne out of the need to improve processes to meet market demand, and they require flexibility in both project delivery and in setting the business up to remain agile in future. After all, technology changes; people don’t.
The key word here is ‘agile’, is a project management model. And it’s an appropriate model for digital transformation of business for two reasons:
1. Major digital transformation projects will often have a clear end objective, but it may not be clear how that objective will be reached, or what it will look like once it has been achieved.
This means: Businesses need both control and flexibility to mitigate risk and allow responsiveness in project delivery.
2. Major digital transformation of the business is not just about the technology: it’s about people.
This means: Businesses need strong change management processes, and regular stakeholder and employee engagement in order to really succeed.
What is Agile?
Agile is a highly flexible and incremental method of managing IT and engineering projects, especially those that aim to deliver a new or customised product or system.
These three areas of focus help to achieve flexibility and control:
- Prioritising: Agile focuses on the biggest value-adds or tackles the hardest problems first, rather than trying to do it all at once.
- Manageable: Agile breaks down project deliverables into bite-sized iterations called ‘sprints’ and implements them over a timeline in a series of releases to end users.
- Feedback loop: after each sprint is complete, a sprint review is conducted among project stakeholders, and the next sprint is planned. This means each sprint’s deliverables are visible to all project stakeholders at each iteration, and changes can be easily accommodated.
In practice, this could translate to frequent, partial releases of software functionality every 2–4 weeks, moving towards a completion goal.
Nukon Senior Consultant Damian Jolly explains, "In the first iteration, the customer may focus on some foundation steps such as integrations to their enterprise resource planning (ERP) systems for master data, production schedules and resource planning.
“This can be delivered independently of their existing system. Then they might move to some high-value shop floor functions in the second iteration that leverages this newly available data.
“This approach lets customers guide the delivery of the project with a compass of what is important to them. They can separate core or high-value functions from lesser-valued features in each iteration.”
Why is Agile better for transformational technology projects?
More organisational control
Whether the project is internally or externally delivered, Agile gives the organisation more control over every stage via iterative delivery (as outlined above). Iteration timeframes are predetermined and can range from weekly, fortnightly or monthly deliverables. This results in better overall engagement and more relevant outcomes.
Because there's minimal upfront design, no time is wasted making intensive plans that will likely change anyway – such is the nature of project delivery. This doesn’t mean there is no planning; it just means plans can be high level and brought to life through controlled iterations.
The very fact that the project is delivered in iterations with feedback loops means risk is constantly being mitigated. Budgets have less chance of being overrun as the project’s highest priorities are implemented first and the project scope can be fluid.
Highly targeted, useful solutions that are actually supported by people in the organisation
Regular iterations and customer feedback means the final product is optimised for the organisation’s exact needs. Employees are more likely to champion systems and processes they helped to design.
Finally, the iterative delivery should have given decision makers many opportunities to see weaknesses in current processes, visualise different possibilities, and build in improvements to current business practices using the new technology or product.
Already started a business digitisation project? Here are some do’s and don’ts to help ensure you get the best outcome:
- Don’t focus too much on technology, and instead pay attention to the process and people – Maybe this is why less than 50 per cent of IT projects finish on time and on budget, and have an average cost overrun of 59 per cent and time overrun of 74 per cent. People are what makes projects succeed or fail, not the technology, so be sure to ask stakeholders what they need from the technology (rather than imposing what you think they need) and get regular feedback throughout the process.
- Don’t think one mega piece of software will solve all the problems – Manufacturing software has come a long way. The market has diversified and it’s now possible to pick and choose from a combination of best-of-breed products, low-cost innovations and open source software that when combined are powerful and tailored.
- Don’t be rigid in terms of planning – The traditional waterfall project delivery method may be suitable for a simple ERP upgrade, but not so suited to a business digitisation project.
- The very nature of digital transformation – Whether it be in the form of a new paperless system for inventory management, or a new digital work order tracking system – is that it’s new and cannot be based on anything done before. Projects that drastically change business processes likely have a broad outcome, but not a predefined set of objectives. Agile is perfect for these projects, because it is based on minimal upfront design.
Plus, new systems or innovations lend themselves to the prototyping approach of multiple releases and testing in iterations. Then, based on the success of these iterations, the prototype phase would move into full-scale rollout. This is impossible using the traditional waterfall methodology of ‘design and planning’ upfront followed by ‘make-release-finish’.
- Don’t forget – this is an opportunity to improve processes, not simply upgrade current systems with a new software product – Many software projects will focus on the technology instead of taking a broader look at redefining processes within the business. This is akin to painting over old flaky paint rather than stripping it back and starting with a fresh canvas.
- Digital technologies can facilitate process change – but they are not central to that change. Agile can assist the organisation in working out how the new system might shape better processes and vice versa.
- Do get the right people on board – AITS reported that ‘68 per cent of projects don’t have an effective project sponsor to provide clear direction or help address problems’. Choosing a delivery partner or project lead can determine the success or failure of a project.
- Do involve people every step of the way – Agile is a perfect way to involve stakeholders in regular intervals. But, as a rule, you should always involve key personnel from all departments, and at varying levels and job roles. Don’t forget to constantly engage with these individuals – how many times have you been called to an initial project meeting and then not heard about it again until it’s been rolled out?
- Do your research or get in project delivery partners – The HBR warns that executives’ enthusiasm (but lack of understanding) for Agile can mean they “unwittingly continue to manage in ways that run counter to Agile principles and practices, undermining the effectiveness of Agile teams in units that report to them”.
- Do know when NOT to use Agile –
Agile methodologies are best suited to:
- product development functions,
- marketing projects,
- strategic-planning activities,
- supply-chain challenges, and
- resource allocation decisions
But are less applicable for:
- Routine operations,
- software implementations with clearly defined outcomes, or
- basic systems upgrades.
Defy the odds: deliver a successful digitisation project on time and on budget
Project management is not an afterthought. It should be front of mind. Get the right people to lead this process, whether it be a team of representatives from each department, or an integration partner.
Selecting this leadership team is the first step to ensuring any digital transformation of your business will be delivered on time and on budget, as well as ensuring it will actually be adopted by people in the organisation.
Ongoing maintainability, ease of use and ability to scale will ensure any digital transformation technology project isn’t just a one-off, thereby proving that the business can continue to grow and be flexible in the face of constant technological disruptors hitting the market.
Getting stakeholder buy-in for your ideas is the first major challenge that has the potential to derail them. Learn how to get stakeholders on your side with our free Managing BI Projects in Manufacturing: The Ultimate Guide to Driving Effective Change. Download it now!