Harnessing Change Management for Digital Transformation

Although digital transformation (DX) was already well underway before 2019, the pandemic rapidly accelerated the widespread adoption of new technologies in every industry. This includes industries previously assumed to be impossible to conduct online, like maximising auto sales revenue and patience-focused digital healthcare solutions. Most organisations understand the need to implement a DX to recover and thrive in today’s digitised landscape. However, the unfortunate reality is that many DX programmes fail despite hefty investments and upper-level buy-in.

Forward-looking companies need to ramp up their DX initiatives to maintain an edge in the face of an uncertain future. However, a lacklustre DX won’t provide the necessary value to compete in a volatile marketplace.

The Missing Element in Digital Transformation

Ironically, the problem with most DX plans is not the technology, it’s the people. While you could pinpoint several factors that cause most DX implementations to fail, they all ultimately come down to a failure to change human behaviour. To succeed in your DX efforts, you must clearly articulate, define, and communicate the expected outcomes and benefits.

Every organisation has its idiosyncratic blend of needs, dynamics, and personalities. So a successful DX will look different for each one. There is no single digital tool that will fundamentally change your business. Instead, you need to start with a framework that considers all the people, processes, and technology in your organisation and approach it from a change management perspective.

How to Build a Successful Digital Transformation Framework

Your company’s vision, mission, and strategy will lay the foundation for your DX plan. To ensure that your DX strategy is guided by and tailored to your organisation’s needs, it should be an overarching and cohesive effort that incorporates all aspects of business operations. You can implement your DX programme with either a PMO or a TMO.

A Project Management Office (PMO) is a centralised unit responsible for defining and maintaining standards for project management across an organisation. A Transformation Management Office (TMO) is a similar unit, but its focus is on leading and managing large-scale organisational change initiatives, including digital transformation. Both PMO and TMO play important roles in driving the success of digital transformation initiatives.

A PMO can:

1. Define project management standards and methodologies for digital transformation projects, such as Agile, Waterfall, or Hybrid
2. Provide project management support, such as resource allocation, project planning, risk management, and project tracking
3. Ensure that project management best practices are followed consistently across all digital transformation projects
4. Provide a centralised repository for project management information, such as project plans, project reports, and project status updates

A TMO will do everything a PMO does in addition to the following: 

1. Develop a comprehensive digital transformation strategy — aligned with the overall business strategy — to drive digital maturity and competitiveness
2. Lead cross-functional teams and coordinate with stakeholders to ensure the successful execution of digital transformation initiatives
3. Provide governance and oversight to ensure that digital transformation initiatives are aligned with the overall strategy and are delivered on time, within budget, and to the desired quality
4. Continuously monitor and assess the progress of digital transformation initiatives and make adjustments as needed to ensure their success

Similarities:

1. Both PMO and TMO are focused on driving organisational change and improvement
2. Both units work closely with stakeholders across the organisation to ensure that projects and initiatives are executed successfully
3. Both PMO and TMO play a critical role in ensuring that projects and initiatives are delivered on time, within budget, and to the desired quality

Differences:

1. The PMO’s focus is primarily on project management, whereas the TMO’s focus is on leading and managing organisational change initiatives, including digital transformation
2. The PMO is responsible for defining and maintaining project management standards and methodologies, while the TMO is responsible for developing and executing a comprehensive digital transformation strategy
3. The PMO focuses on the execution of individual projects, while the TMO focuses on the overall transformation of the organisation

The Stages of Change Management for a Digital Transformation Strategy

Whether you choose a PMO or a TMO, you need an explicit transformation roadmap governed by your autonomous PMO or TMO that can communicate the need for change and follow through in delivery. The change management process should be customised for your business but include the following steps:

Define and Analyse 

During this phase, you’ll revisit your organisation’s vision, mission, and strategy to determine if it needs to be updated or re-evaluated. You’ll examine how your business objectives are linked to the DX and define what changes need to be enacted to follow your digital roadmap.

Plan 

Once you’ve determined your needs, you can create your roadmap. During this stage, you’ll identify how you can implement change processes to meet your goals as well as the schedule, budget, and resources you need. Then you’ll prioritise tasks, starting with the ones that will create the most fundamental change.

Implement

Now it’s time to go live. However, this isn’t the end. Quite the opposite — the time and attention you need to devote at this point may exceed your planning time to date. Continue to measure and manage how your workforce adopts the system.

Execute

This is the point when many DX efforts fail. Companies often plan for and adopt new technologies but miss the essential step of ensuring their people are fully trained in using them as expected. To execute well, you should define the change indicators to measure the success of your DX, such as the level of digital adoption. Monitor these change indicators and respond accordingly.

Continue to Improve

After a successful DX, you should celebrate your change. Build on this momentum to create an organisational culture that embraces change. The data analytics of your new system will show where you can improve your business operations. And accepting the challenge of continuous improvement will ensure you remain competitive despite changes in the marketplace.

A Proven Approach to Transformation Management

Working with a change partner like Renoir can significantly increase the value you gain from your DX efforts. Our proven approach provides:

1. A comprehensive transformation program that is driven by strategy to support your business vision
2. Alignment with your company’s perceived needs as well as your real needs to effectively execute the strategy
3. Analysis and planning at the initiative level to ensure all the elements you need for success
4. Faster inception and delivery of organisational change management initiatives
5. A transformation focus that centres around your core business performance and execution
6. Confidence and security that your business will realise the full financial benefits and strategic objectives of your DX
7. A TMO or PMO that drives continuous improvement and is ready to embrace the challenges of an uncertain future

The human factor must be at the forefront of your DX strategy if you want to scale up. And at Renoir, our extensive experience in managing organisational culture and change has given us the insight to future-proof your organisation in the ever-evolving business landscape. Talk to one of our experts today to find out how our digital transformation services can help you succeed.