Digital Transformation Terms and Definitions

In helping clients through their digital transformation journeys and speaking the language of digital transformation it is very important to be speaking the same language with your team internally and with your outside consultants and other stakeholders.

Making sure that you understand what these terms mean and how it applies to your organisation in your transformation. top ten terms that you need to know in embarking on your digital transformation

Types of Enterprise Technology

All the acronyms of buzzwords describe different types of enterprise technologies.

There are several similarities between different types of technologies, and they don’t necessarily need to be mutually exclusive, an organization may have more than one of these solutions and in many cases, organisations will have more than one, so understanding these terms upfront will help you find the one that’s best for you.

1)    SCM (supply chain management) is a way to manage everything from your procurement, to pay processes, par stock levels, to ordering of raw materials, storerooms or warehouse management to the distribution and logistics.

2)    HCM (human capital management) is the HR processes, benefits, payroll, performance management, all your performance reviews, staff training, engagement all this is done within in HCM system.

3)    ERP (enterprise resource planning systems), are technologies that provide broad capabilities across financials inventory management, customer relationship management, HR systems basically it ties together an entire organisation under one umbrella which is called ERP.  That’s what ERP enterprise software planning software means.

4)    CRM (customer relationship management) this type of software is basically Salesforce automation it’s how you automated your pipeline is, how you track the activities of your sales team is, how you track commissions, how you assign leads and prospects and opportunities and regions to your sales team. CRM is really the first contact that an outside perspective client has with your organisation and CRM is the way of tracking that.

Business Requirements

One of the first steps in any sort of digital transformation is to define business requirements and what business requirements are. Basically, a definition in description of what you need your technology to do, it’s usually based on your business processes, it’s usually based on what you’re trying to accomplish as an organisation, and it’s usually based on your future state of what you’re trying to accomplish in the future.

One thing to note is when you’re defining your business requirements, not all your business requirements may be created equally. There might be some that are higher priority because they are unique to you and or because there are requirements that are going to differentiate the different systems in the marketplace.

But regardless of how you use the business requirements, which by the way it can also be used for the implementation, you want to make sure you define those early on and understand what your business need is.

Organizational Change Management

Very important is to understand is organisational change management.

It’s important term that’s also misunderstood an organisational change management is commonly referred to as communications and training. But that is a very limited an inaccurate description of change management.

Change management essentially has anything to do with the people side of the transformation. That could be things like how jobs are going to be redefined, new organisational structures, new organisational design change impacts, understanding how people’s roles and responsibilities are going to change. All those things and the way we deal with all those things that all falls under the umbrella of organisational change management.

Now the important thing will not be the technology, it’s about change management. It is the number one reason why a majority of transformations fail, because they don’t adequately address organisational change management. This is a term you absolutely need to know and in fact I encourage you to contact me to have a conversation to cover change management in a lot more detail, there are lot of the strategies and tactics and frameworks of how to deploy changing management as well as a what is change management in more detail.

Cloud vs On-premises

Another distinction to understand is how the technology is deployed. Is the technology going to be deployed within your office or within your four walls or is it going to be hosted off site, by someone else in cloud? The difference between on premise systems and cloud systems means that you’ve installed or implemented the technology on your server within your organisation, cloud means that someone else is hosting that solution, so the software and all your data is in the cloud hosted by a third party.

Today more vendors are moving to the cloud and in recent years some argue that on premise will be dying sort of technology in a few years. Maybe that’s true, maybe it’s not but there’s still a majority of software vendors that are providing on premise solutions largely because on premises been around for so long, and those technologies tend to be more mature and more established than cloud still today.

Customization vs Configuration

To understand is what is the difference between configuration and customization.

First, it’s important to note that every organisation that deploys any sort of enterprise technology has to do some sort of configuration. We need configuring or personalising the technology for our specific needs. We choose what screens do use, how the information is going to flow, but we’re doing this all in the context of how the software was built and how was it meant to be used.

Customization on the other hand is taking the concept of configuration a step further and now we are actually changing the code and we are rewriting the software to do something it wasn’t necessarily meant to do.

Most organisations are very allergic to the concept of customization, but they find that they have to customise because there’s some deficiencies in the technology, they required that don’t quite meet their business requirements. While most organisations want to steer clear of customization, where they try to steer clear of customization inevitably most of them end up having to do some of that.

But is important to recognise that customization leads to a lot of risk in terms of difficulty of operating in terms of increased costs, higher risk and understand the downside of that but also understand that configuration is something we will have to do, as part of the transformation and to have a competitive advantage.

Project Governance

How you manage your project and how you make decisions, is essentially what project governance is.

Project governance is the overall framework that you used to manage the project, this includes your project charter which describes how decisions are made and who the team members are. Clear roles and responsibilities of team members is also included in your project plan. It’s a plan where the timelines, were the resource allocations, our major decisions made and escalated throughout and implementation.  As well as defining measures of success for the overall project.

Just a few examples of what you might include within your project governance framework, but in essence when you talk about project governance and controls, it’s an important framework this designed to manage your project and put in the right controls to ensure it stays on track.

Agile vs Waterfall

Another concept important to understand is the differentiation between agile and waterfall deployments.

Waterfall deployments are the traditional way of deploying technologies, you very clearly defined and sequential steps in implementation process, that start with defining your business requirements and then once everyone has agreed in, signed off on the business requirements. You then move into the design of the software and only once you signed off on the design then you moved into the build test training go live et cetera.

Now that’s how projects typically work but in recent years the whole agile movement has sort of scrambled.

That approach or that common approach for a lot of organisations many organisations are shifting to more of an agile and less sequential approach where you just are building stuff and testing it in real time to get people’s reaction and then you start modifying the technology. Meet whatever feedback you get from your audience so the idea here is to deploy technology as quickly as possible and get a minimum viable product in place you can get immediate feedback and adjust.

In theory it sounds great, but there’s a lot of risks to this, but there’s also a lot of risks to the waterfall approach to and I am happy to evaluate for my clients with my partners both possibilities.

Integration

Integration is a very important concept, especially in today’s technological day and age of multiple systems. That need to tie together and talk to one another.

Integration is the way that those systems tie together and talk to one another, the way they transition or transfer data between one another.  The way workflows transition between different systems, for example if you have a CRM system or customer relationship management that your sales team is using and its tracking sales commissions you would need that data on sales commissions to tie into your financial system which may be in your ERP system or whatever your accounting system is. You need to create an integration point where that data can flow from this CRM system into your financial system.

Here my technology partners and I will assist and solve and get into the technicalities of how that’s done, but in general the whole concept of integration is the flow of data and processes between your systems.