SAP is at the heart of the enterprise, running over 41,000 companies globally that have chosen and implemented this leading Enterprise solution.
It is invariably a long term investment, which supports core and emerging business processes, functions, innovation, integrations, value creation and efficiencies. SAP change can often be complex but is nonetheless crucial to improving competitiveness, decreasing time to value, responding to disruptive threats and digitally transforming your business.
Sometimes it can feel like rebuilding and refining a vehicle for a new purpose whilst actually driving it on a really demanding and constantly changing route!
Whilst in lockdown, I started re-reading some of my books which included the awesome “The Goal” by Dr Eliyahu Goldratt. In this book, Dr Goldratt introduces us to the ‘Theory of Constraints’ where every process has a single constraint and total process throughput can only be improved when each constraint is resolved and eliminated. Equally, it is important to invest time and focus on areas that are not constraints as this will not yield significant organisational benefits. Constraint focus will help companies achieve their ‘Goals’. As economies the world over re-emerge from the challenges of COVID-19, many companies will be reflecting on different Goals including digital transformation agendas and how to enable and transform their businesses moving forward.
Recent IDC and Everest Group research confirms what I often hear from industry colleagues and thought leaders. Put simply, the majority of transformation projects fail to deliver or realise the anticipated business value. In his blog, Everest Group CEO Peter Bendor- Samuel captures really well 3 core failure reasons including lack of upfront commitment, failing to take an iterative sprint approach and onboarding a technology-first approach. Peter uses some great examples based on SAP companies targeting a transformation of their ERP implementation.
But when you start to analyse in more detail the constraints and underlying reasons for failure in these ERP modernisation programmes, there are some really interesting lessons learnt that almost certainly were not considered sufficiently prior to initiating a transformation.
Modernisation is a huge topic, so I have chosen to break this down into a number of different areas highlighted not in isolation but that fundamentally affect the success and value created from any digital transformation. In this blog series, I thought I would share these modernisation challenges and tackle each one in a dedicated manner to help reflect on the considerations, preparation, leadership and governance ‘Goals’ we should have in starting any SAP modernisation programme. Embedding these attributes and eliminating associated risks enables a significant increase in transformation value and success.
- Understanding and reinforcing the transformation vision
- Quickly managing out Decision-making blockers
- Overrunning projects and enabling Agile responsiveness
- Updating the Operating Model
- Transformation culture, change resistance and fatigue
Just like Dr Goldratt’s set of tools for identifying, analysing, resolving and eliminating constraints, many constraints will consist of multiple linked activities where one or more may act as a brake on the entire business. These five areas are tightly linked, none more so than the last, and most significant being Culture, resistance and fatigue.
It is far far easier said than done to manage risk, disruption, differing perspectives, people and investments and coordinate in the same direction at times of uncertainty.
Huge transformation pressures and the need to demonstrate continual improvement is exceptionally challenging when working with large, complex business applications and a business that needs to be more agile.
SAP Modernisation can and will deliver increased business value if we look to remove these constraints.
Even in our business, there has been contention between maintaining our transformation vision and our agile iterative approach which reduces the scope into smaller, more digestible and manageable metrics and goals. The problem comes as you scale out the value chain and transformation goals to drive the transformation vision.
Understanding the metrics at an iteration level is fine but joining these together has been one of the most important and difficult actions and tests of overall leadership. We are a small, tightly integrated team of creative, highly experienced thought leaders but I have been surprised on so many occasions how difficult maintaining clarity on the transformation vision has been. I would not describe it as a transformational culture issue rather many points of view have been formed without the context of the wider vision and goals.
Feedback is provided at the end of each iteration in the retrospective and maintains energy and momentum but when goals become linked, further decision-making blockers emerge and there are real challenges to updating the Operating Model. It is in itself a continual process which does necessitate high levels of energy and commitment to the goals. The removal of blockers, previous mindsets whilst ensuring the updated agile Operating Model and a view of the collective problems of an organisation must remain front of mind. Over challenging problems, taking problems out of context or allowing others to revert to previous mindsets may risk removing the very transformation value just created.
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In Part 2 of this SAP Modernisation series – I focus on understanding and reinforcing the transformation vision to enable leaders to drive the change agenda and maintain momentum when projects deviate from plans or lose sight of the goal as new constraints are introduced.