In an age of digital transformation, companies are struggling to answer questions such as: “How do I go about a large-scale transformation underpinned by technology change?” “Does my technology meet my business objectives?” and “What have other organizations that are in my situation done in the technology space?”
The answer to those and many other questions can be found through a coordinated framework and common approach to Technology Strategy & Selection (TSS), which helps organizations develop the strategies and identify the technologies that support strategic business objectives, drive business value and enhance performance. According to Donna Meshaka, managing director at KPMG US, TSS can help companies create a transformation vision, design an integrated roadmap, and get started toward reaching their technology goals.
Over the past several years, she explains, organizations have wanted help determining the right ERP platform, as well as what applications should support HR, finance, supply chain and other functional areas. “What we found as we embarked on that process with our clients is that many of them hadn’t thought through a lot of strategies needed to make a comprehensive and valuable transformation, which is necessary in a very cloud-based and solutions-oriented world,” she explains.
Applications were often seen as pure technology plays, she says, as opposed to fully aligning with the business and understanding the imperatives the business is asking IT to fulfill, as well as the pre-implementation opportunities they could be taking advantage of.
The need for large-scale transformation — with a push from the business
Today’s savvy businesses want to learn more about how disruptive technologies — such as blockchain, AI and RPA — can support them in creating competitive differentiation. As a result, they are pushing IT to be more than just about plan, build and run. “The business wants IT to step up and be more of a strategic partner to them and help them to think through those opportunities,” says Meshaka.
In addition, organizations across industries have realized they have been handcuffed by what may be two-decades-old implementations that they have, at best, done a technology upgrade on. “IT may never have taken the opportunity to say, ‘This is the world today and here is what our business is asking us to do, can we do that?’ They find that they cannot support that.” One client, for instance, has 26 systems supporting HR. “It is just something they are used to supporting, but imagine all the increased cost related to supporting that number of applications as well as integrations,” she says. “It doesn’t allow them to be nimble and support the business.”
TSS helps take organizations far beyond software selection to a business-led, technology-enabled strategic effort, she says. “Putting together this comprehensive framework and common approach can help organizations accelerate transformation and take advantage of some of the newer disruptive technologies that can provide immediate benefit, even before going live with the actual implementation,” she explains.
For example, she recalls a client going through a TSS effort, which can take between 12-18 months, depending on the maturity of the organization and its ability to sustain transformation. “We found there would be an immediate opportunity in the payroll area using robotics process automation (RPA),” she says. “The potential benefit was so great that it made sense for them to move forward.”
The TSS framework: What you should know about driving transformation success
- It’s about coordination between IT and the business.
The TSS framework is all about coming together to develop a target operating model that allows the organization to get to a foundational space that allows the business to be more aspirational in leveraging technology. “The majority of ERP implementations don’t fail because technology fails, or because processes fail, but the lack of adoption of the employees within the organization,” she says. “So getting that buy-in earlier and creating a coordinated and aligned vision around disruptive technologies really helps to ensure the success of transformation.”
- Establishing a Transformation Management Office is a must.
An essential part of the TSS approach is tying everything together with a Transformation Management Office that provides a governance framework and an organizational vision around tracking the value of the transformation. “I’ve met many CIOs over the years and asked them to quantify the benefit of their ERP implementation — and they often weren’t sure,” she says. “The Transformation Management Office ensures the ability of the C-suite to go back and support a decision they made 18-24 months ago.”
- It allows IT to understand business goals across functions.
Meshaka stresses that the TSS approach allows the IT organization to tackle more than one function at a time in an overall ERP strategy and selection — creating opportunities because of the dependencies from one function to another. “Doing this singularly creates more rework later in the process and may even require reimplementation, because the organization hasn’t thought through the implications of HR on finance, or finance on supply chain, for example,” she says. This can be a launching point to make sure there is alignment on ERP selection requirements based on unique things the business needs to be doing for competitive differentiation, she adds. One of the immediate benefits is cost reduction: “Some of our clients have realized hundreds of millions of dollars in savings through such an exercise, where we’ve done together the process work as well as technology requirements in implementing disruptive technology as ways to drive immediate savings.
The future of the TSS framework in a fast-moving era
Requests for the thoughtful, integrated, strategic work of the TSS framework often comes, interestingly enough, more often from the CFO and the COO than the CIO. “That’s why it has not been terribly difficult to get the buy-in,” says Meshaka. “Executives quickly understand that this is probably why they didn’t get the full benefits when they did their technology implementation before, because typically it was a pure technology play — now it’s a different world.”
The TSS-style framework will continue to evolve as disruptive technologies — such as cybersecurity as a business imperative — become more and more critical. “There is even more stress on the framework to make sure it stays current and valid and brings the latest to our clients for them to consider,” she says.