Digital transformation is a critical step for businesses aiming to stay competitive. As organizations grapple with the complexities of evolving from on-premises systems to cloud-based solutions, the need to embrace digital transformation becomes evident. It is the key to new opportunities.
On a recent episode of our podcast, iT2 DX Talks, Dan McGrew spoke with Ken Rundus about the power of digital transformation. Rundus’s extensive experience in leading transformations and nurturing executive relationships has driven significant growth at renowned companies like PepsiCo, Southwest Airlines, Mohawk Industries, and Michaels Stores.
In 2018, he founded BLC, an executive roundtable dedicated to leveraging transformation and continuous improvement to grow leaders and their businesses.
Through CEO-S, he continues to mentor executives, helping them achieve greater purpose and personal development. His knack for harmonizing diverse interests, cultivating individual talents, and resolving conflicts has been vital to the success of many complex technology and business initiatives.
Let’s take a look at what Rundus has to say about digital transformation, its necessity, and how leadership can make it easier by embracing change.
Understanding Digital Transformation
Companies often fear the move to the cloud, whether it’s to something that’s private or public. However, digital transformation is inevitable for organizations aiming to stay competitive. To ensure your transformation is successful, understanding its purpose and role in your organization’s future is a good starting point.
Start with ‘Why’
Any digital transformation journey needs to start with you understanding its purpose. Ask yourself, “Is this truly changing our form or structure, and to what degree?” Clear answers to these questions will help in aligning the right stakeholders and ensure that everyone is on board before diving into the project.
People First
Despite the increasing complexity of technology, successful digital transformation is fundamentally about your people. That’s why having the right expertise and ensuring the involvement of those impacted by the changes is critical.
Organizations should not try to navigate this journey alone. Leveraging the experience and expertise of others who have already undergone similar transformations can provide valuable lessons and avoid common pitfalls.
While technology continues to evolve, the principles of effective digital transformation remain constant. It starts with a clear understanding of why the transformation is needed and relies heavily on the expertise and involvement of the right people.
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The Importance of Leadership
In defining leadership, Peter Drucker highlighted the importance of elevating vision, performance, and personality of all team members. This concept is particularly relevant in digital transformation, where organizations undergo significant changes in form and structure. Such impactful changes require strong leadership to guide the process effectively.
In one scenario, a client struggled to gain adoption for a significant SAP technology investment. Despite the clear benefits, the user community and some managers resisted the change.
The C-level executive sponsoring the project faced intense scrutiny and questioned the decision for years. However, deep down, he knew it was the right move. Eventually, he had to assert, “This is no longer a democracy. This is what we’re going to do.” This decisive leadership turned the tide, leading to successful adoption and financial gains.
This story is common. Most people are naturally risk-averse and prefer to follow rather than lead. They need clear direction and understanding of why the change is necessary and how it benefits them. This is why having senior executives on board actively supporting the transformation is crucial. Without their commitment, efforts to drive change are likely to fail.
Here’s a vital lesson: Effective digital transformation demands strong, decisive leadership. Leaders must clearly communicate the purpose and benefits of the change. This approach not only facilitates smoother transitions but also helps achieve the desired outcomes.
Different Approaches to Digital Transformation With SAP
Socializing the Plan
One of the biggest pitfalls in change management is the failure of leadership to socialize the plan. Many projects, especially large-scale ones, falter because the leaders do not engage the right stakeholders from the beginning.
For example, an international company operated under the assumption that simply building the technology would ensure its adoption. This project failed because the leaders did not involve the necessary people from the start.
Despite the wealth of literature and case studies available from sources like McKinsey and Harvard, many projects still fail for the same reasons year after year.
The Project Management Institute also consistently reports that the number-one cause of project failure is the lack of proper leadership and stakeholder involvement. This repetitive mistake underscores the need for leaders to learn from past failures and ensure they are not repeating them.
The Cloud is Non-Negotiable
To stay relevant and competitive, embracing this shift is non-negotiable. Moving to the cloud is akin to past technological changes that initially seemed daunting but ultimately became essential.
Early adopters pave the way, and soon the mainstream follows. Those who resist are left struggling to keep up. If your company hasn’t started its cloud journey, it’s time to begin or risk falling behind.
Many organizations may hesitate to move to the cloud. For C-level executives, connecting with peers who have already made the transition can build confidence and reduce fear. Learning from others’ experiences offers reassurance and practical insights.
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Building Internal Support
Gathering “ammunition” to sell the cloud transition internally is critical. Doubters within the organization need tangible examples of success from other companies. Aligning organizational levels for peer discussions can be highly effective.
Have your CIO talk to another CIO who has successfully navigated the cloud journey, and have your CEO discuss the transition with another CEO. This approach builds confidence and provides practical advice tailored to your industry’s specific challenges.
Roger Bannister broke the four-minute mile. Before Bannister’s achievement, many believed it was physically impossible. Once he broke the barrier, a number of others followed suit.
Similarly, seeing other companies successfully transition to the cloud can dispel fears and inspire confidence. It demonstrates that what seems daunting is achievable, paving the way for more organizations to follow.
The Power of Community in Digital Transformation
When it comes to digital transformation, regret is a rare sentiment. Most organizations that embark on this journey quickly realize its potential. While some may feel they haven’t yet reached their goals, the overwhelming response is a recognition of the need to keep pushing forward.
Digital transformation often reveals more opportunities and challenges than initially anticipated, much like the experience of a student who, after completing a course, discovers just how much more there is to learn.
A key piece of advice for those undergoing digital transformation is to engage with a community. Joining user groups and CEO groups provides valuable insights and support. Understanding what other organizations are doing, learning from their successes and mistakes, and sharing your own experiences can make the process more enjoyable and profitable.
Navigating digital transformation alone can be a challenge. However, finding and connecting with a community of peers can transform this challenge into a shared journey. This collective wisdom helps organizations avoid common pitfalls, adopt best practices, and stay motivated throughout the process.
Your Digital Transformation, Made Seamless
Concerned about what your digital transformation will look like? Need advice from the experts? Partner with iT Services 2 (iT2) and leverage our expertise to navigate your journey with ease. Our team of top-tier SAP consultants, who understand your unique challenges and goals, are here to provide personalized, local support.
Don’t go it alone—work with iT Services 2 (iT2) and transform with confidence.
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