Companies are facing more complex challenges than ever, requiring a variety of disciplines to come together to set a future vision and strategy. Historically, says Alec Binder, director, advisory at KPMG, these challenges have been treated as technology problems that can be solved simply by buying a better platform or solution.
However, as explained in Part 1 of this series on KPMG’s Technology Strategy and Selection (TSS) framework, that outlook often does not drive the outcomes or the value that companies are expecting. For large transformations, a business-driven, technology-support effort is becoming an imperative, not a nice-to-have. The modular approach of the TSS framework allows for the right services and business ideas to be brought in seamlessly and holistically — toward setting a future vision and choosing technology that truly drives change.
Phase 1: Who Do We Want to Be?
The first phase of KPMG’s Technology Strategy and Selection framework, says Binder, is all about setting the right course that aligns all of the key stakeholders around what a successful future looks like. This goes beyond collecting requirements from the business stakeholders and going technology shopping — instead, the process focuses on co-developing business imperatives that respond to today’s and tomorrow’s market pressures and disruptors.
“This really allows the business and IT to come together on a common vision of the future and decide what is expected out of this transformation,” he explains. To that end, KPMG’s E-Brainstorming digital platform allows global stakeholders to interact and brainstorm in real time, while its U-Collaborate interactive multi-day workshops bring stakeholders together to develop guiding principles and strategies around the future transformation. They can focus on target operating models for both the business and IT functions, and apply design thinking concepts to understand and solve complex business issues.
Going through this visioning phase takes advantage of a very different approach and entry point for companies seeking transformation, says Donna Meshaka, managing director at KPMG US. “Most companies can’t take this huge leap into aspirational things like predictive analytics, for example,” she says. “They really have to take a two-step approach and this phase helps them through that journey.”
Phase 2: What Do We Need to Do?
Building on the transformation vision of Phase 1, the second phase in KPMG’s TSS framework turns the visioning results into a blueprint for the future organization, including things like developing the business, functional and IT target operating models that will support the goals, and creating a technology landscape strategy.
“This is usually the first time we’re beginning to discuss specific technology solutions and how they can support this business-driven transformation,” says Binder. “When a large platform change is involved, be it ERP or a large move to the cloud, this is when we start talking about the technology selection activities.”
The TSS framework uses pre-built operating models aligned to different industries and goals that are then adapted to the company’s specific needs and desired outcomes. “We also look at the standard requirements companies are looking at for a technology solution,” he explains. “What are some of the big differentiators?” This allows clients to make decisions that drive the future vision, particularly homing in on the technologies that can offer big competitive advantages, as opposed to focusing on table-stakes requirements.
Phase 3: How Do We Get There?
Once a TSS blueprint is created, it’s time for a plan of action, says Douglas York, director at KPMG. “The third phase is all about how our clients take what they need to do and build around it towards a different way of working,” he says. That means defining and acting on all of the target state initiatives, including technology selection, to support the overall transformation — as well as creating a high-level roadmap with solution design and implementation initiatives.
There are several key accelerators that help on this front, he adds. One is Implementation Cost Methodology, which helps form the overall business case for change — what can the company expect to spend money on and what are those things they should look for to generate cost savings and cost avoidance? The second is a Technology Evaluation Scorecard, which takes all of the outputs from the initial visioning and feeds them into pre-set evaluation criteria related to the new targeted operating model. “This makes sure everything is appropriate for the client and what they need,” he says.
Phase 4: How do we start?
After going through the first three phases of the TSS framework, the company can finally mobilize its efforts, says York. All of the stakeholders need to ensure they are aligned and that commitments for a successful transformation are fully developed before embarking on implementing the new technologies.
“Our clients get finalized roadmaps with a list of detailed commitments required across all the groups,” he explains. “This is also where they may create a Transformation Management Office, to provide short-term governance processes for the whole transformation effort — around program management, value management, change management and enterprise architecture.”
The Challenges and Opportunities of Technology Strategy & Selection
Companies don’t embark on a full-scale technology transformation every year, so any component of the TSS framework can be challenging, says Binder. However, the advantage of a modular approach is that clients can approach the process in pieces, at a pace that works for the entire organization. “This may happen only once every 10 years, so it’s not a repetitive thing they’re used to doing,” he says. “Getting that business alignment and vision, especially across functions or divisions, can be one of the biggest challenges.”
However, going down the TSS journey can create tremendous opportunities for driving transformation success, which make the challenges along the way well-worth it, says York. “With the traditional process, you help a client select a technology and build a business case, but they are left wondering how they go about making it real and putting it into place,” he says. “The TSS framework really integrates that so they are prepared, ready and can mobilize to start immediately — it really drives acceleration to achieve those outcomes faster and to a higher degree of success.”