How to steer your digital transformation to success

The Covid-19 pandemic has shifted the way we do business and sped up the pace of digital transformation. More than half of products and services are now digitised, according to industry analysis.

Businesses big and small are reckoning with the new normal – and the sudden arrival of the future now. But rather than leaping in, it’s important to plan an IT transformation carefully. “If you’re going to invest in external expertise, it’s essential to get them in as early as possible,” says Peter McMenemy, managing partner and head of transformation at Analysys Mason, global leaders in telecoms, media and technology (TMT) management consulting.

Digital transformation programmes can easily go awry because of decisions made in the first six months of the programme. McMenemy compares it to steering a huge ship on a transatlantic voyage without a map. “You get into situations because you haven’t taken the time upfront to answer some of the really big questions,” he says. “Too often, organisations simply try to replicate what they already have in a new system, rather than defining what they want to be in the future and working towards that.”

And it’s vital to do so. “As soon as you’ve finished the initial roadmap and design, any change in direction you want to make after that is twice or three times as expensive as if you’d made it earlier on in the programme planning phases,” he says. “The old adage: ‘design hard, build easy’ is a really appropriate one. Most people don’t do that.”

Analysys Mason’s Transformation practice is currently supporting one of the biggest telecoms firms in western Europe through their business support systems (BSS) transformation – a five-year, billion-euro upgrade programme. Yet they’re equally adept at working with startups that have spun off from large telcos, and also work across financial services and utility companies. The process is similar, whatever the sector: you need to be clear on your goals before you set off – and take big decisions early to set up the programme with flexibility to cope with challenges and problems that can arise. 

“Businesses often focus only on the ‘what’ and ‘when’ in terms of systems and technology and don’t put enough thought early on into the ‘how’,” says McMenemy.

McMenemy recommends trying to keep responsibility for transformation in-house as much as possible, rather than buying in expertise. “You want to have as many of your own permanent employees working on any transformation as possible,” he says. “Ultimately, these are the people you want to be trained up and understanding how the system works. This way you can also manage the impact of the transformation on your people and their processes.”

Outside vendors should be thought of as partners who can fill in gaps: McMenemy recommends setting up an outcomes-based contract with vendors where both parties are incentivised to work together fruitfully. “You’re going to be spending years with these vendors putting in the lifeblood of your IT and software systems,” he says. “Why on earth would you not want to treat them as a partner and also incentivise them to do a great job with potential financial upsides? You’re going to be working with these companies for many years into the future.”

By setting clear goals, and building strong relationships within and outside your company, it’s possible to tackle even the trickiest challenges on your journey towards IT, digital or business transformations – and to avoid wrecking on the rocks along the way.

This article was published in The Times on 30 September 2021 in a special report on Digital Transformation.