The word Digital Transformation (DT) gets thrown around a lot. Before we get into why Project Management Excellence is critical for DT’s success, let’s look at what does Digital Transformation really mean to enterprises. There isn’t really a standard definition.
"Digital Transformation is fundamentally changing the way organizations operate or do business with its customers. Is it internal or customer facing? Answer is both. Is it technology or process? Answer is both."
Organizations need to go thru DT for both internal and customer-facing functions. If an organization is embarking on a DT journey, internal DT should be prioritized or should happen in parallel to customer-centric DT. This will help prepare internal stakeholders to experience the DT so they can provide the similar rich experience to customers. One great way to internally rise the tide is to Digitize HR functions. Businesses should look at 360° process re-engineering and lay the technology on the optimized processes to derive most value.
We could continue just on what is Digital Transformation for the entire article but that’s for another day. Let’s focus on what are the critical Project Management (PM) characteristics that need to be focused on to execute DT to excellence?
In general, everything the PM bible says should be religiously followed at the tactical level, however, if you are operating at the strategic level, the following aspects become key requisites for a successful DT execution:
- Vision – Vision needs to be aligned and driven by DT business strategy standpoint. Project Management should help articulate and evangelize the vision clearly across the organization, working thru the leadership. DT that does not support or aligned with the business strategy in one shape or form should be challenged.
- Operating Model – Assuming the vision comes with executive sponsorship, new business operating model needs to be defined and accepted by the business functional owners. PM needs to orchestrate the new world operating model across business functions to get a consensus so both process engineering and technology team can devise an executable business solution for the DT. The goal should be to simplify, standardize and centralize the processes as much as possible except for compliance, regulatory or customer requirements, where it can be localized.
- Business Value Proposal – No, this is not late in the game and yes, the business case needs to be documented from strategic, operational and financial analysis perspective so the true business value of the DT can be analyzed. How does one arrive at business value – it differs widely from the companies and it cannot be based only on financial ROI. Business value needs to be looked at from several viewpoints. More on this in a later article.
- R&R – More than ever, everyone involved in the DT project needs to understand what their roles and responsibilities including sponsors and leadership. A simple and comprehensive RACI matrix needs to be reviewed with all constituents by Project Manager to get commitment and approval.
- Velocity – Long gone are 12 or 18+ months enterprise projects, need to show velocity in the delivery of the DT projects. Project Director should phase the projects in such way that bite sized deliveries are scheduled to show quick wins and keep the community engaged and motivated.
In a traditional approach, Change Management is part of the Project Director’s role. However, it doesn’t work effectively in DT. A dedicated Change Director married to the hip with Project Director is a must for successful high-velocity DT.
"One other very critical attribute of DT project management to handle the Velocity is Change Management."
How should the Change Management be structured for DT? There are many principles and framework that could be employed but just like the DT itself, it should be simple - a four-prong approach is effective.
- People Management – Change Management’s critical and foremost activity as part of DT should be the formation of core project team, their goals, R&R, rewards, and training. Also, engage solution partners early in the game for effective solution design and execution
- Culture & Leadership – This is the second most important factor in DT’s success, after finalizing the Operating Model. Change Director should engage the leadership to drive the cultural change that is needed for the DT - red tape should be cut thru and silos need to be broken down.
- Business Process Assessment- To de-mystify, keep the internal community less anxious about change and to get the engagement & alignment to the DT high – Change Management should clearly assess and communicate process change that is underway and how the community will be supported with resources and training to get ready to take on the DT.
- Communications – Nothing earth-shattering here, but quite often missed. Right message, to right communities, at the right time, in a right format is a key to keep the engagement high. A good forum needs to be provided for the core DT team to interact with wider community regularly during the DT.
Every organization is different from leadership, culture, people and process perspective. All the ingredients from Project Management need to be altered in dosage for a successful Digital Transformation. As you can imagine, each topic discussed here warrants its own article, but due to the space restrictions, only a tasting is given.
One other aspect we didn’t get to touch is Transformation Portfolio Management, which is a half science and half art. We will come to face-off with that behemoth shortly.
About the Author:
Siva Saravanan is an IT Executive with 20+ years of experience in helping organizations with business-centric digital transformation, change management, developing technology roadmaps, big data, portfolio management and program execution.