Modernization initiatives are supposed to be transformative. Expectations for return on investment are high. Despite the commitment for resources and executive support, these initiatives often deliver lack-lustre results.
There are five reasons for the lack-lustre results.
1. Conservative approach
Concerned about potential chaos created by sudden drastic changes, the business chooses to take a gradual approach to avoid any big-bang effects. The approach breaks the initiative into “chunks.” Unfortunately, a lack of integration of the disparate piecemeal projects leads to incoherent practices. For instance, invoice processing is an accounting function but it is also part of the end-to-end procure-to-pay process. Instead of improving the invoice processing function as a standalone, it would be more beneficial to incorporate that “chunk” of work as the overall procurement process modernization. This adds complexity to the procurement process overhaul, but there is more synergy to do so.
2. Automation focus
It is good to eliminate manual, onerous work by introducing technology to automate the tasks. The benefits include speed, error reduction, and free up capacity for other work. However, the focus on automation runs the risk of mechanizing unnecessary tasks. This turns the manual overhead into mechanical overhead. For instance, a workgroup was using a checklist in Excel to manage workflow within and across departments. A new application has been implemented to streamline the core functions performed by this group. This new application does not have the capability for workflow management. Subsequently, the group opted to build a static task list in the new application to replace the Excel list. The task list was simply converted into another format. There is hardly any improvement.
3. Incoherent choices
Many applications offer extensions of their core functions to manage peripheral work. When it is necessary to implement multiple applications, there would be overlap. This complicates the technical as well as the operational aspects of modernization. If the implementation of the various applications is not well planned, the end users and customers are impacted. For example, a process management application is a backbone application. It drives how information is shared, tasks are assigned and decisions are made. If a niche application such as construction estimates is also needed, it is important to assess if it makes sense to use its native workflow capability or bypass it altogether. There would be differences in the logic, look and feel between the process management application and the construction estimates application. Using the process management functions from both for different segments of the project proposal preparation process would introduce confusion, affecting productivity.
4. Baggage from past experiences
Successful modernization is guided by a clear vision for what is best for the business. While it is good to have subject matter experts involved in the initiative, it could be a liability because of their past experiences. Former conflicts and decisions might skew their choices, impacting the ultimate solution design. For example, problems with an existing tool for time reporting had led to a number of processes put in place to verify the time reported. As the new application is being designed, the subject matter expert is adamant that multiple checks and balances must be built. This adds redundancy and certainly does not help to eliminate unnecessary work.
5. Inability to overcome change resistance
It is not surprising to see resistance to change over the course of a modernization initiative. When resistance becomes a show stopper, the project would be delayed. Often, the solution is compromised, affecting the benefits that would be realized. For example, an insurance company had a central data processing group to enter client data into multiple systems. A new fully integrated application would allow data to be entered as they are collected by different areas. Concerned that there would be a reduction in headcount, the manager of the data processing department argued that data integrity would be compromised if the new application was open to other areas. It took many discussions before the manager agreed to the change. The implementation date was delayed as a result.
These hiccups dampen the outcomes. Avoid them so that the return on investment is not impacted.