Critical Success Factors For Each Phase Of Digital Transformation

Raimar Hoeliner

Part 1 in a 3-part series. Read Part 2 and Part 3.

With the pace of business change, companies are seeing the value in adopting digital technologies that enable ongoing innovation and evolution. They’re looking to transition from standard software systems to intelligent platforms that connect the enterprise with people, business networks, the Internet of Things, Big Data, and anything else the future may hold. Approaching this transformation can be intimidating, and many companies want advice on how to successfully navigate this journey.

My attendance at industry events leads me to believe that many prefer to learn from the experiences of others. Therefore, this three-part blog series identifies critical success factors for the planning, design, and build phases of digital transformation. These recommendations are based on first-hand experiences with the implementation of digital technologies and the many companies my colleagues and I have guided on their journey to become intelligent enterprises.

Starting with the end in mind

The most important step in preparing for digital transformation needs to happen long before you start thinking about the software. You must begin with the end in mind – and then devise a plan to achieve your future state. What does your organization hope to gain in terms of business needs, not technical functionality?

Your organization must have an understanding of where you want to be a few years from now and what drives value to customers, vendors, and employees. This awareness not only keeps you laser-focused, but it also prioritizes and sets boundaries for the direction that you take. A world of technology becomes available when moving to an intelligent software platform. The key in today’s fast-moving economy is to steer toward incremental successes with the grand vision in mind and a transformation plan that allows for course corrections as needed.

Identifying value drivers

Understanding how to increase the value of your products or services sets you apart from your competitors and is the foundation for a successful transformation. In many industries, enablers for driving value are often based on cutting-edge technology. In retail, for example, differentiating factors or value drivers can be innovative supply chain management, excellence in customer service, or the speed and accessibility of purchases to the consumers.

When identifying value drivers, take your time. Work with transformation experts who can guide your efforts, challenge you, think outside the box, and talk to your customers, vendors, and employees. Value-generation workshops leveraging design-thinking techniques can help your organization achieve its vision.

This planning process will help your organization fully understand its capabilities, meet its transformation targets, and guide its digital journey to success – all at a pace that your company is able to absorb.

Discovering your potential

Driving value is a process of change, influenced by people, culture, and the speed to adopt newer technologies. To discover your potential, you should ask for guidance from your trusted IT advisor. In addition, you can take advantage of free self-services that provide insight to the latest product maps by industry or line of business. Self-service tools exist to help your organization reimagine innovation for your businesses and provide guidance on how to chart a path to the intelligent enterprise. You can assess your current IT landscape, business strategy, and industry trends, and review a report with recommendations for the solutions that can enable you to realize your digital strategy.

Developing a plan

Once you understand your options, you can start thinking about your current state and the required steps which take you to your intelligence enterprise. These plans are driven by your vision, value drivers, business needs, time to market, product roadmaps, current environment, and budgetary constraints. The deployment approach, project investment strategy, and partner choice are critical decisions that should be made early in your planning phase.

Deploying in the cloud, on-premise, or hybrid

Your organization must decide whether to deploy on-premise, in the cloud, or both. There are implications for whichever path you choose. On-premise deployment may give you more flexibility and control of your solution landscape – but it also comes with the cost and effort of maintaining software and infrastructure. A company with a global footprint may have highly complex processes in some regions and minimal processes in others. For that organization, it may be best to run more complex processes on-premise or in a private cloud environment where you control everything and run simpler processes in a public cloud. You need to understand the capabilities of the target environment and find the best fit for your organization’s needs.

Choosing greenfield or brownfield project investment

Another dilemma for companies approaching digital transformation is whether to convert an existing solution landscape (brownfield), start fresh (greenfield), or execute a landscape transformation. Greenfield is often considered by companies that have a very complex or highly configured, developed environment and have lived through the pain of such an environment. They aspire to standardize rather than carry that complexity forward. If a company has been staying close to standard all along, if the environment is not too complex, or if they’ve been regularly updating their software, then it makes sense to do a conversion.

Partnering to move ahead

Guidance from a knowledgeable system provider will help you form a plan that is tailored to your needs. When choosing a partner, you’ll want to consider these key questions:

  • Whom do you want to hold accountable?
  • Who knows your industry and business best?
  • Whom do you trust?
  • What is the cultural fit?
  • Who has the most comprehensive knowledge of the solution to be implemented?
  • Who has the skill set for state-of-the-art technologies and innovations?

In the end, a trustful relationship with clear mutual expectations will be the most economical choice, and this is not necessarily measured by the initial price tag.

The next post discusses how to put your migration plan into action through the design phase of digital transformation.

Companies that want to make the transition to an intelligent enterprise with the greatest speed, efficiency, and minimized risk can look to the SAP Advanced Deployment service. Experts from the SAP Digital Business Services organization will lead the planning, design, and build phases of your implementation of or migration to SAP S/4HANA. This state-of-the-art offering includes outcome-focused services, proactive support offerings, intelligent tools and platforms, a global team of experts, and value-added partnerships to bring that vision to reality.

Raimar Hoeliner

About Raimar Hoeliner

Raimar G. Hoeliner is Vice President of the Global X+O Incubation Hub at SAP. His team is focused on integrating customer and employee experiences in every differentiating business scenario for SAP customers. Raimar is a visionary and creative leader, who is experienced in driving innovation and developing organizational excellence. With over 20 years at SAP, he has established himself as an accomplished leader, speaker, and author focusing on accelerators and leading-edge solutions for customer success.