From 0 to 100 – digital transformation can only happen with organizational change

February 8, 2019 ・ 4 minutes reading time
Digitalization, strategy

Thanks to digitalization, process flows can be accelerated. This means, for each person, that they have to deal with these new technical options and their effects on increased effectiveness and transparency. In the process, it will very quickly become apparent that digitalization is not a no-brainer and that the organization cannot be accelerated from 0 to 100. Successful digitalization projects are often only achieved by keeping the handbrake on, so that you don't outpace your organization.

No transparency at zero cost

Let's take an example that we often encounter in service procurement projects: the "unlimited overfulfillment" - not a friend of great transparency. The project controller is thus given a lot of leeway, which he should fill responsibly. Changed requirements from authorities, customer wishes or even a changed situation on the construction site - everyone is clear and aware that this entails adjustments to the original order. Thanks to "unlimited overfulfillment", settlements can be made in excess of the order value. The budget in SAP remains untouched for the time being - controlling via SAP is hardly possible in this constellation. Transparency is therefore required.

From a purely technical point of view, this can be fully mastered through digitalization. However, the real challenge begins when you look at the consequences from the perspective of the people involved: Putting an end to unlimited overfulfillment means at least restricting, or even eliminating, the previous leeway of those involved. This is because they now have to ensure that the order value is sufficient for billing. If not, they must first adjust or increase it. This should ensure at an early stage that the order value corresponds to the actual scope of services – and this opens up opportunities for controlling in SAP.

This is where the organization comes in. It is important to determine a level of regulation for the new organizational processes that is (also) acceptable to those involved. Existing organizational regulations and freedoms must not be excluded. The organizational development should be planned on this basis.

Digital processes require organizational guidelines

The path to digitalization should be determined by the type and scope as well by the intended level of acceleration – intermediate goals, of course. Instead of going from 0 to 100, a gradual strategic realignment of the organization may be more effective. In the course of digitalization, this particularly affects the division of work between different roles in a continuous process flow, such as approvals and releases. To come back to our example of unlimited overfulfillment: Instead of ruling this out completely, the use of tolerances – successively adapted – can help to constructively overcome reluctance.

After all, For the bigger the changes compared to the analogue world, the greater the challenge for the organization not only to convey them to those involved, but also to engage them in the process.. In this context, the role of clear decisions on the part of the management cannot be overstated, as digitalization affects many people in the company who also work in different departments.

Long-term change in resource allocation 

And not to forget: Greater efficiency in the digital process does not automatically mean saving resources in all areas. It will rather lead to a shift in resources because the requirements increase in certain sections of the procurement process and decrease in others.

With regard to FUTURA® SRM, our collaboration platform, relocating invoice verification BEFORE invoicing significantly reduces the workload of the process by eliminating redundant entries – however, this requires an increased qualitative contribution from planning, as changes in the procurement process in particular must always be documented and evaluated (supplement management). This is the prerequisite for the subsequent process leading up to payment to run almost automatically.

This demonstrates the importance of change management. On the one hand, it is important to raise the individual's awareness of the benefits in the overall process. At the same time, any additional burdens in the work area of each individual must also be taken into account in a tangible way. This means that the individual must be heard and taken seriously. In this change process, it is important to turn those affected into participants.

From 0 to 100 – with the handbrake on

Change management is successful when it is based on planning how the change in work processes – dictated by the technical possibilities – should be managed:

It is advisable for the management to issue a kind of digitalization guideline and form a cross-departmental steering committee. A good foundation for a successful digitalization project can be created with such a guideline and the steering committee, which should first start with an analysis of weak points.

In our project experience, regular interdisciplinary jour fixes, involving managers and key users in close contact, are also very useful measures. They provide a framework for breaking down general statements such as "I can't work like that" and "We've never done it like that before" into constructive solutions and thus significantly improve user acceptance. Although the preparatory coordination work, training and discussion rounds involved in the actual change phase are time-consuming, they are nevertheless the most promising approach for ensuring the long-term success of the introduction of new digital systems.

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