Before you start the Transformation…
Suhas Dutta
As we engage with organizations taking baby Digital Transformation steps, we notice commonalities. Some of those commonalities pose stumbling blocks, especially in traditionally run companies. Most, are easy to guess e.g. lack of overall planning or strategy, inadequate investments, leadership / ownership at the wrong level or even people dynamics resisting change.
Our experience says two other things can choke or derail a transformation program. Hint: one generic organizational characteristic and the other is an outward facing department.
Did you guess?
Organizational Effectiveness
We are referring to the characteristic Organizational Effectiveness. It is understood by the efficacy of six organizational systems, namely:
- Leadership,
- Communication,
- Accountability,
- Delivery,
- Performance and
- Measurement.
Some models spread it across areas of
- Talent management,
- Leadership development,
- Organization design and structure,
- Design of measurements and scorecards,
- Implementation of change and transformation,
- Deploying smart processes and smart technology.
You will notice, both streams are directionally the same; in terms of how effective an organization, is or how effectively it is aligned to its strategy.
This thread makes the organization tick and impacts its dynamism. You will appreciate, this is where culture and organizational change etc. become real and why it is crucial for transformation. Simple things, like the velocity of a communicated instruction and relevant action being taken, become important. Success of even baby steps, like an (independent) cloud migration of infrastructure and applications, depends on these things
Sourcing and Procurement
The other, as we mentioned, is a subset. Sourcing, and Procurement. It is a department that every organization has in some shape or the other. Procurement, in many traditional organizations, evolves into a manifestation of human egos, massaged by bureaucracy which nurtures not a win-win, but impedes progress. The long drawn sourcing processes, laborious onboarding, wanting to gather duplicative and unnecessary (and often not relevant) pieces of information cause lack of speed. Deliberately delayed payments, often up to 60 days, are stymying factors; often caused by a lack of understanding of the changing world. These are an indicator of an inwards focus of the organization.
Even compared to the last quarter of 2019, today’s world moves at a different pace. Transformations need different gear ratios, a certain level of agility, acceptance and flexibility to engage with humans (vendors, partners etc.) at a pace and level concurrent with today. There is a need to interact and collaborate with an altogether different eco-system and rapidly remove internal impeding factors. This eco-system comprises new world companies with little legacy or physical office space behind them, but often with stellar technology, an understanding of startling business models and an ability to perform. Hence, Procurement and sourcing becomes the first department of the organization which needs an overhaul even before IT.
In most cases, this department definitely needs a change in policies. Policies which are human centric, and standing on changed human orientation and outwards-in focus. Augment this with technology, to create a good start towards an enterprise-wide transformation.
Organizational Effectiveness or the lack of is an overall stumbling block. Procurement (and sourcing) is a facet. This must be one of the first areas to transform, and is a good low hanging fruit.
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