The objective
One of the oldest product based fortune 100 technology company realized that it needed to accelerate the business activities, processes, competencies and its operating models to fully leverage the digital tools and technologies driving higher revenue and better margins by getting the live information about its logistics, minimizing missing containers, damage deliveries and better predicting demand to match supplies.
Current Scenario
Management recognized the need for Digital Transformation to remain competitive in the world where everything is getting transformed and developing newer business models faster than we ever imagined, from farming to manufacturing to information technology nothing is untouched by the digital transformation.
The company had a robust and one of the best in industry supply chain capabilities and third party based highly efficient and reliable logistics system. Business spread over 124 countries and distribution across 70 countries through its partners company needed information to make crucial business decision just in time.
Company manufactured its products and components in Asian countries like Thailand, China and Taiwan and products were distributed through its logistics service providers to all over the world through is hubs, ports, distribution centers and warehouses however company knew it was missing out to leverage the new age tools and technology that can drive higher efficiency and accuracy saving millions of dollars every year. Company was willing to utilize the business intelligence that the modern technologies can provide to better predict and forecast the demand and plug in the gaps it has in supply.
The problem – The major problem it was hoping to solve by digital transformation is to detect its shipping containers almost on real time basis and its partners will know precisely when the orders are arriving. Company will also get the real time information on its damaged goods and missing containers. This will help reduce the theft and enable faster recovery and replacement to the partners to achieve higher operational efficiency. Company also expected the real time information will increase the partner satisfaction and customer engagement driving future business.
Company looked out to hire an external consultant to leverage their expertise in digital transformation and another fortune 500 IT company was hired, which was building their expertise in consulting.
The Challenge – The contract was signed and the work commenced. The consulting company started understanding the business and developing their knowledge on a very efficient but complex logistics model. At this stage the functional staff was made aware that the company is undergoing digital transformation on their legacy system which is based on GT Nexus, Sea Burger Application, SQL, Business Objects and reporting to business on regular basis in excel and HTML format. Though company was married to legacy technology stack it had done automation utilizing Microsoft scheduler, VBA coded excel dashboards for most of their work over a decade but still require a large number of employees to support the business in various business functions.
Consulting company begin the work as almost Blind Challenge to understand overly complex and rigid legacy IT infrastructure and begun data ingestion from Legacy database to new platform. Ineffective gathering and leveraging untransformed logistic data was the initial hurdle and post that it was expected to build the reports as it is received by the business currently. The problem here was the user interface decided for the business users was Tableau. Tableau is a visualization tool, however the business reports are in excel data format largely of columns and rows. Consulting company pitched to transform 100 of columns and thousands to rows into graphs but this was not accepted because company needed to see information in detail to action upon. For example they do need to see what percentage of containers are missing but they precisely need to know which container was missing to action upon. Another problem that consulting company faced during transformation was absence of their business object knowledge. As the transformation was happening from BO to new technologies, consulting company still needed to dissect the code and understand the formulae mentioned in BO, which they were lacking. Company was essentially trying to retro fit the legacy technology backbone with new-age technology.
Major setback was when the final output for the business were not usable by the business users because it was either defined incorrectly due to consulting company’s business knowledge or was not in form that can be utilized by the business to take business decisions. After numerous corrective sprints the project was partially called off and company decided to transform the reporting and business intelligence part on its own and this is where the current in house team was assigned to take up this additional work.
Improvisation – WHAT HAPPENS WHEN YOU PULL THE PROJECT INHOUSE FROM THE VENDOR
This looked like a right decision in the starting to the management but Digital Transformation Needs Change Management
- Skills – The current team did not have skill sets to transform the current business intelligence to new platform and they were asked to develop skills using websites and online videos on their own.
- Bandwidth – Time availability was another issue with the current team as they were expected to deliver the regular business intelligence until the new system is fully functional
- Domain Knowledge – Team also faced lack of domain knowledge as most of the team were new in logistics and faced a challenge defining the automated reports into the new platform
- The employee pushback – The current team was mentally unprepared to take up the additional work as they were under impression that consulting company will deliver the end result
- Cultural challenge – Company being old product based company the change was not something that was fast adapted by employees. Company faced silent push back.
- Human barriers – Not only the tenured employees were reluctant to change their habits, but corporate politics, fear and skepticism obstructed efforts to move it inhouse.
- Lack of leadership communication – Involving business users was another major task as business users were reluctant to spend time with the functional staff in transformation as they suggested providing Business intelligence in staffs responsibility and they are only information users
- Mind Set – Most of the employees believed that automation will take up their day to day job and company will go for work force reduction and thus 80% of the functional employees were not putting an effort to make it successful.
The project plan which started with yellow soon become red and after few months there was so much resistance that the project remain in red. Timelines were missed over and over again and project delayed for over a year costing company millions of dollar that it paid to the consulting company contracted support employees and in the form of loss in business.
What could company had done differently to make this transformation successful?
- Leadership Communication – Digital transformation is not only the transformation of tool, technologies and process but it is transformation of entire business model. It changes not only the way a business operates but also how it interacts within itself and with external world. Business transformation is a change in mind set that business is evolving faster than we are adapting and change is a rapidly changing constant. Communication department should have chalked out plan to communicate that the company’s digital transformation journey doesn’t belong to one individual or department. It is a Company-Wide Digital Transformation.
- Top Down and Bottom Up approach – During the digital transformation decision process management would have consulted with the functional stuff, business users, support functions and everyone in the supply chain business and communicated clearly why the company is undergoing transformation. Keeping employees informed and involved through the whole process would have generated confidence.
- Consulting and Counselling – Lack of understanding of digital solutions and impact were the major fear among staff. Management should have explained that transformation will generate better skill based jobs that will increase their employabilit.
- Training – Management should have arranged training on new tools and technologies as soon as the project started
- Incentives – Employees should have been communicated about Incentive plans to achieve extra miles finishing project as early as possible and contract workers should have been hired if needed.
“Digital transformation is an ongoing process of changing the way we do business. It requires investments in skills, tools, technologies, infrastructure, and often cleaning up IT systems. Digital transformation is a cultural change that requires integrating people, technology and business together”
I vouch for the authentication of this article and it is originally written by me. – Devansh Chaurasiya
