The key word in Digital Transformation is not digital - digital merely refers to the enabler - it is transformation. This post is not advocating whether you should jump aboard this train - you will determine the timing that is right for you. The objective of this post is to make us all look more critical at those that are claiming to be experts in delivering Digital Transformation, and charge accordingly. Some are doing fantastic jobs, and many others have not succeeded in putting a meaningful transformation in place at their own company. Especially when companies get larger, the mantra "we are totally transformed" usually holds no water in practical reality.
Cool or Kool-aid?
Digital business platforms, the 4th wave of industrial revolution, digital transformation - it is hard to escape these terms. We may well be on the cusp of the 4th wave of industrial revolution - but I would hesitate to call this out before the event. Let the historians judge us. For now, let's focus on what is actually practiced, versus what is preached.
Let's take a moderately large to very large company offering this "digital transformation" services. How have they transformed themselves? Would the credibility be impacted if they have actually not transformed anything themselves? Just moving an application to the cloud, does not mean you are doing anything different. Just having a new tool, does not imply a different way of interacting. Some examples: Uber has significantly impacted the personal vehicle transportation industry. Their model? Not to employ, but to match demand with supply via an app. The taxi industry has followed by adding applications to book a taxi, but the model itself has not really changed. Similar with the music industry. Spotify has put a model forward where you can listen to (almost) any music from (almost) anywhere, for a flat fee per month (equivalent to the price of 1 CD per month). The rise of streaming services saw a decline in music piracy, which in turn caused a decline in music sales. Cool, right?
Now for the Kool-aid - Uber and Spotify have yet to turn a profit. Is their model flawed? Inevitably - otherwise, the market would reward them with profitability. But that is not to say that they don't have any value - the question is, can companies like these, or their successors (I can't help but think of the adage: "the pioneers get the arrows, the settlers get the land") transform the business model further into a profitable one?
The Product Factor
Back to the issue at hand- how can you trust your digital transformation provider, if they actually have not transformed anything themselves? Case in point - an IT systems vendor claims that with their software and platform, you will be more collaborative, have real time data insights, and you can respond to the market with agility. The same vendor provides you with pricing that locks you in for a year (agility?), and proposes a three year "transformation program" that is executed in a "waterfall" method. For this project, the traditional project pyramid is constructed, with lots of people doing lots of things - but you will not see the benefits until the first (or second) release is in production - usually after a year. This is how we have implemented business software for the last three decades. Why? Because the traditional business software is so complex, with so many interlinked and interwoven functionality, you cannot just simply turn it on.
It is difficult to imagine that using the same product features (yeah, we moved them to the cloud - big deal) will bring about such never seen before transformation.
If your service provider still operates with separate project files, and excel files to "collaborate and communicate", it is difficult to imagine how they are going to bring about transformation to your business.
The Service Bench Factor
Service providers make money when the "bench" is cleared. As they primarily invoice time, an hour not billed is an hour lost. The delivery of product is less relevant to the service provider's bottom line. Capacity drives the solution - not your business. To put it in other words, sales people sell what is available.
It also is an incentive to do the project as it is always done - scare prospective clients with risk, and pad the project with resources to mitigate this risk. Just like space in your cabinets in your home - it does not matter how much you have, it always finds a way to fill itself. Projects are no different, tasks have a way to consume the time that is allotted to them.
With the availability of tools, and the enlightenment of collaborative and iterative delivery, it is difficult to justify the lack of change here.
Be the Transformation you Sell
I hold the belief that you should drink your own Champagne - if I buy a car, and see the car salesmen drive a different brand than what his dealership sells, I get suspicious - doesn't he believe in the product? Why is the car he sells me good enough for me, but not him? Same with software companies. If you are a vendor delivering an ERP system to your clients, but don't use it yourself... well... what does that say about the system? Too hard to implement? Not easy to use?
I am proud to say that my entire business runs on Zoho. And Zoho runs on Zoho. As such, I have no problems recommending it to my clients, as I know how it can work for their business, as it works for mine.
But that is not all.
It is not just the product - Zoho One has the ability to truly transform the software applications market. It is a comprehensive suite of products to run your business, without the complexity. You can implement it in small steps, iterative with benefits delivered in an almost weekly frequency. As such, I have decided to go along with this disruption (the commoditisation of business applications), and change the way that services are delivered. This is paying dividends.
The model is based on the premise "teaching how to fish" - meaning the client builds confidence and competence in the solution - where the consultant is not doing the work to them, but with them. Where possible, with the client's appointed super-user at "the wheel".
The second change we have made is the method of delivery itself. Instead of long term releases with all features packed into them, we offer first a brief analysis of the business capabilities in a capability map, and appoint potential solution components to these. Then, on a weekly basis, small, but with measurable impact, features are delivered to the users. This increases adoption, reduces the demand for training (small features are easily adopted), and decreases the implementation budget by 50% to in some cases even 80%! It can be done - it should be done. If we want to truly commoditise the business applications, it should be simple and relatively inexpensive to implement - with rapid value delivered to the customer.