7 point plan to avoid digital transformation disasters

In the last blog article, we pointed out a few topics that are fundamental to the success of a digitalization project, especially specific to the utility sector. As ever in life, digital transformation is littered with unsuccessful projects and hick-ups along the way. In this blog article, we will shed some light on the uncomfortable truth in digital transformation, failings within a project and how to avoid digital transformation disasters. We will take a look at mistakes made, lessons learned and offer up some solutions to recognize them early on and most importantly how best to rectify them.

Here is a 7 point plan to avoid digital transformation disasters .....

Have a mission, a vision and plan what it needs to do

• Decide on a strategic level what your target market is and what fundamental features are needed in order to compete on the market.

For example, what feature set do I need to provide in order to support my target markets customers? What level of automation is needed to ensure that my product is competitive on the market.

We have been involved in numerous projects where the business requirements came only from one department and did not fit with the strategic goal of a platform. 

These deficiencies usually are a result of a few simple, but fundamental factors:

• Strategic goals of product management were not aligned with the operational readiness needs.
• In-house consultants were not properly utilized and external resources, that were not well versed in business processes, drove the project.
• External vendors gave a fresh approach, however lacked the basic know-how of industry processes.  
• Project resources lacked all-round, E2E experience of the process chain, leading to disjointed requirements and solution designs.

• Insufficient utilization of in-house resources allied with common deficiencies of the skill sets of external resources, can lead to the "the wrong people in the right job".

Although your overall team possesses the necessary abilities, the wrong deployment of these people led to an imbalanced project and delivery team.

• If there is no clear goal from the project management and product owners, the risk of a lack of guidance when designing and implementing a solution, is very high.

• Pick a team based on a mix of heavy experience from within the sector, fresh thinking of key resources from outside the industry and most importantly, choose vendors who know their market and obviously the processes.
• Strong management, adhering to a clear mission, vision and project governance will ensure that these values trickle down the team and everyone has a clear goal.

MVP (minimum viable product) should only be used as a stepping stone to reach MMP (minimal marketable product) and not be used for your landscape foundation.

MVP is a buzzword that continuously rings throughout the development phase of a project. An MVP approach is fine from an incremental delivery model perspective, but it’s often overlooked that your IT foundation needs to support your clearly defined goals, mission and transformation vision.

The genesis of many failed IT projects came from an insufficient clear vision, an inadequate functional and technical architectural design at the start of an implementation.

If the foundation does not support your clear end-goal, a costly and noisy rework of processes and architecture is often needed halfway through the project. This is especially painful and risky if a rework is needed after go-live.

• Ensure your project team comes from the right background, make sure you always know your direction of travel and invest time defining a clean, future-proof architecture and data model which is flexible enough for you to change direction and add enhanced functionality down the road.

Remember: the better the foundation, the higher you can build.  And more importantly, the more flexible you are to adapt to changing requirements and avoid digital transformation disasters.

A caveat: This section uses extreme jargon that some readers may find offensive. 

A quick MVP (Minimal Viable Product) might get you a political go-live and keep the wolves at bay for a while, but what about the future….? 

Utilities require a Heavy MVP, due to the regulatory requirements which can in the utilities sector be understood as a Minimal Marketable Product (MMP).

Aiming for the low hanging fruits continuously will concoct the perfect storm of a missing vision for your target market and an insufficient foundation to fulfill your customers needs and regulatory frameworks.

• Although a hurried MVP seems to save time, money and effort repaying technical & functional debts will quickly eat up those early gains.
• All to common delivery pressure quickly turns an MVP into a BVP (in the sense of a Barely Viable Product)

What one usually fails to recognize that when targeting a MVP turned BVP approach there will be collateral damage to the organization. Usually business cases are not thought through and tend to ignore the operational costs and social costs (team morale, user and customer satisfaction) which are caused by this short cut.

Try to avoid digital transformation disasters:

• A rushed MVP should never be the guidance for your feature functionality if in reality a Heavy MVP may be required. 
• More often than not in utilities a MMP is the bare minimum that should be deployed on a productive system.
• MVP should be used sparingly at the start of a feature design and implementation, and any MVP implementation must be compatible with a MMP and a full-blown solution.

The team around you needs to know this. The deficits mentioned at the start of the article are often the cause of this problem. Again the paradox is, the right team may be in place, just the focus and feature-set awareness may be missing or suppressed due to a BVP mindset.

A clear vision, strong team and experienced staff who know their processes can prevent a bad case of the BVP (Barely Viable Product) flu.

So you want to build this ship and sail it, but you have no visibility on the building costs or even have any nautical maps...

The phrases "rudderless ship" and "runaway train" are ones that come to mind when thinking of well-intended projects, without a strong project management team behind them.

• You might have the ideal team in the roles most suitable to them and you might be lucky enough to be working with great vendors, but who can tell you what needs to be done, by when and within which budget?

Many projects have the shortcoming that nobody can pinpoint who is doing what, to what timeframe and expected budget. The failure of project management to get basic information like estimated effort in man days and duration of work, completion rates and cost of delivery, will make it inevitable that any business case or mission statement will be continuously missed.

• Project management needs to be on top of roadmap planning and delivery schedules. They should be the eyes and ears for upper management when they notice patterns of inefficiency within the project.  They need to ensure that delivery teams start finishing deliverables and stop starting and never finishing.
• Often the operating costs of your shiny new platform are overlooked. If the foundations are lacking and your hosting and agent costs therefore go through the roof due to inefficient processes and deficient technical implementation, your business case can end up in tatters.  
• Project management & leadership needs to ensure that a clear, approved business case is the foundation for any architectural or functional decisions.

Your project management team needs to have the full picture of the current state of play, the future direction of travel, budgets and any historical decisions and mistakes previously made, that will dictate whether history will repeat itself in the future.  

This is where project management plays a crucial role. 

• These guys need to have an overview of the financial controlling aspects, the business case of a transformation project, good functional awareness of feature set dependency, be the glue between upper-managements vision and mission and the boots on the ground.

A project will consist of many strands. These need to managed and aligned accordingly. A disjointed migration, testing and feature delivery cycle is a sure-fire way of missing your budget targets and deadlines. 

• A simple timeline is always your friend. It’s surprising the amount of projects we have seen, when there is no milestone planning. Use timelines as an anchor around which other key decisions can be made. 
• Project Management must ensure they work closely with financial controlling and delivery management to ensure the project remains “ship-shape” and does not hit “rocky ground”.

Democracy is the worst form of Government, except for all those other forms that have been tried from time to time

This above statement holds true in many aspects of life, especially projects.

• Nevertheless, all democracies need a strong leadership to give guidance and a clear mission and vision statement. A leadership team needs to ultimately feel ownership and responsibility for the success or failure of a project.

Management will need to stick to their guiding principles and align these continuously with all levels of hierarchy within the project. Without a strong management structure, project members further down the chain become uncertain as to what direction the project should follow. 

Strong leadership should result in clarity within the project organization, however strong leadership needs to trust and rely on a strong team around it. 

The management team should be constantly aware of the risk of worker rebellion and declining team spirit by adopting an inclusive and transparent aspect to their management style.

A strong and stable management structure needs to find the sweet spot between a strong and decisive decision making process, delegation of tasks within the chain of command and taking overall responsibility for the project.

• The leaders need to regularly assess the project team composition,  be aware of project shortcomings through  working closely with project management, delivery teams and product owners. They need to be decisive enough to make changes accordingly.
• Leadership also needs to be aware that a largely dictatorial approach to the project will discourage innovation and can trigger low morale amongst the team. One recommended approach is to regularly shake up the team in an incremental manner, enabling promotion within the team, bring in fresh ideas from external parties and be transparent towards any issues a project may be facing.
• Leadership needs to be self-aware and address it's own deficiencies too. 

As any amateur psychologist will say, the first step to solving a problem is knowing there is a problem.

It's one thing to design and develop processes, but how do you migrate?

Migration can be the make or break of a platform. Migrate badly and the end results will be horrendous. You can’t hide poor data quality, that won’t cut it with your customers.  

• Migration is not only the transfer of legacy data from one system to the other, it's much more than that. For example, cutover planning is very often overseen and testing and operational readiness are rarely properly aligned with migration milestones. 

Badly migrated systems coupled with badly implemented processes have led to the financial ruin of many a utility company.  Regulators have been known to impose penalties, ranging from fines to prohibiting the acquisition of new customers. Centuries old municipal energy suppliers, who have gained the trust of the community, are suddenly faced with low customer satisfaction and a heavy reduction of their once guaranteed market share.

Migration should never impact your customers or your bottom line.  Your company needs to withstand the potential distribution of a migration and mitigate any severe shocks. The process needs to be managed transparently.

• A migration project needs to understand the requirements of the system, needs to align its cycles with delivery and test management. 
• It needs to have a full understanding of the old and new system and be able to provide full transparency to all levels of project members.

What happens for instance when the whirlwind romance with your vendor ends?  Costly divorce or do you stay together for the sake of the kids?

If you have made the decision to place not only your trust in your IT vendors but also your financial security, what happens when things go wrong?

This is not a one-night stand but a long term commitment.  Promises made during the dating phase may not be kept...

All too often, a company will undertake a venture with an external delivery partner / IT vendor and not have an escape plan. The future roles their loyal, hardworking internal IT and business departments will undertake once the project goes live are rarely anticipated. 

• Companies need to avoid the risk of over-dependency to their software vendors, they need to still retain the freedom, and more importantly, the ability to “take back control”.
• Usually external parties lead the delivery of a project with the expectation that the internals will pick up the slack and take over the maintenance and future enhancements after go-live. This is seldom the case and blows your business case out of the water.
• Utility companies also need to get real and know exactly what a SaaS scenario really means for them. Many are unaware that the world will drastically change and they fail to plan for this.  Worse still, external vendors don't make them aware of this as they have a conflict of interest in pointing this out.

Vendors will always make you feel that you are “the one”.  Well, shock horror: they often say that to other partners and when push comes to shove, you might be at the back of a very long queue.

• Choose a vendor where there is at least a degree of partnership and co-ownership. Ensure that your internal staff is able to co-maintain or augment the platform going forward.  

Co-development, co-design and co-ownership are crucial factors in ensuring stability in the future, should anything untoward happen.

Paddington Utilities Consulting offers a full-blown portfolio of services for the utility sector:

• Strategic consulting 
• Functional assistance in utility processes
• IT development of enterprise software for utilities 
• Project management 

Feel free to contact us for a free consultation to see how our experts can assist you!