What’s blocking your digital transformation?
Innovation and transformation does not come from maintaining the status quo. Genuine change requires a different approach to many aspects of an organisation’s operating model including procurement and contract management, capability development, and accepting different forms of risk. These traditional ways of operating that may be stopping you from achieving outcomes.
Narrow contract definition
Traditional procurement methods often fall short when it comes to digital transformation projects. These methods force organisations to pre-define deliverables before the problem is fully understood. This ignores the importance of user-centric discovery phases and well-researched, well-defined use cases. This can result in delivering the ‘wrong’ outcome—complying with the contract but missing the mark on business or user needs. Or worse, no outcome and a failed project.
Transformation projects need mature procurement tools that allow contracting for outcomes, not just narrowly defined functional deliverables.
Short planning and budget cycles
Tying projects to a single planning or budget cycle can limit outcome achievement. Traditional accounting practices track costs and benefits within the same budget period. But outcomes-based engagements often yield benefits over time. Sustainable outcomes rarely materialise within a single quarter or year.
Trying to measure benefits too quickly can result in measuring the ‘easy’ things and not the ‘right’ things. Achieving outcomes is a marathon, not a sprint.
Capability gaps
Successful outcomes-based projects demand a different mindset. People need strong communication skills, problem-solving abilities, and user-centric design thinking. Staff must be adaptable, analytical, agile, and focused on business benefits. This type of work is not for everyone. Trying to re-purpose your existing team into these new roles is risky as a small group of entrenched thinkers can seriously slow your progress. These blockers can stifle innovation and drive your top talent to look elsewhere.
Building and retaining a diverse, capable, outcomes-focused workforce is crucial.
Low risk appetite
Conventional contracts are structured to define and manage risk. And when the problem and solution are well-defined, this approach is often the safest option. But outcomes-based transformation projects need a more novel approach. This could include risk-sharing between organisations and suppliers, collaborative solutioning, or experimentation through a proof of value. Contracts may need to be distributed across various vendors to benefit from the scale of a large supplier and the specialist skills of a niche provider.
Different ways of working demand the acceptance and management of different forms of risk and uncertainty. Adopting new approaches may be scary, but with the right partners by your side, it could be the key to delivering your best outcomes yet.
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