9 Part Blog: The Reasons Transformational Change Can Fail – Reason 8.
Most forms of transformational change require the purchase of software or some type of proprietary methodology. This can include ERP or CRM software, sales force development, or performance improvement programs. Every implementation is unique in nature and in its requirements. For example, software implementation almost always requires extensive process mapping and data cleansing. As well, the company may need to coordinate and work with a systems integrator or 3rd party vendor which entails its own complexity and risk. For other types of initiatives (such as sales and performance improvement), follow-up training, coaching, and managerial support are required post implementation.
Most vendors are very experienced and have worked with lots of clients. So, they are good at spotting potential challenges that some clients may face when developing and implementing their solution. However, rarely are these challenges and down-the-road hidden costs acknowledged or discussed by vendors throughout the review process. This raises an important question. Why are these issues almost never discussed?
The Vendor Review Process is Flawed
There are 2 reasons these potential issues are not discussed in meetings with prospective vendors:
(1) Most organizations implement transformational change only once or twice every decade. As a result, many are simply not aware of the additional requirements and hidden costs they are responsible for. Depending on the type of transformational change, these can occur pre or post implementation. Hence many companies don’t ask about them because they are not aware of them.
(2) For most vendors (including system integrators and 3rd party providers), their primary business model is based on selling licenses and a standard amount of consulting time. Consequently, they focus on providing their stated services, which companies agree to. There is also no compelling reason for vendors to divulge potential issues they might be observing when they meet and speak with a potential client. (They assume that the client at their own cost, will deal with these as the project develops, and it is up to them to know this.) The challenge a vendor faces if they raise these potential issues during the selling process, is it could make their offering seem unattractive compared to other vendors. As a result, vendors focus precisely on answering questions raised by the client during the selling process; closing the sale; and meeting their stated commitments as per their well-written contracts.written contracts.
Most vendors and 3rd party organizations provide great software, training methodologies and services. However, it is ultimately up to the client to understand what they are acquiring, and what they will need to invest in beyond the vendor’s contract, to ensure successful adoption and financial results. So, what should organizations do to develop a robust knowledge of what they need to put in place for success?
Plan For The Vendor Review Process
The first thing an organization should do when it decides to implement a transformational change is to become knowledgeable about the challenge they are about to undertake. Executives and the Project Manager should speak with employees that have gone through similar change initiatives while at other companies. Some of the key questions to ask include:
- What went well?
- Why did it go well?
- What did the company do right?
- What did the company do wrong?
- If the company were to do it over again, what would they do differently?
- What do you think we need to plan for now, to ensure our success?
The answers to these questions should provide some guidance regarding some of the potential challenges that could emerge.
Another option is to speak with an outside consultant to gain their perspective on gaps and potential challenges they see. The consultant should speak with these employees and focus on the above questions. As well, they can create a confidential online survey for all employees to respond to. The consultant can then identify strengths, and gaps that will need to be understood, prior to discussions with potential vendors.
Meeting With Potential Vendors
Once your company has developed a list of prospective vendors and invites them in to speak, it’s my experience that if a vendor shows up and seeks further information about your company’s needs, as opposed to showing up with a pre-canned presentation, you should take them seriously. This is likely a strong indicator that they are trying to get further information, in order to provide you with a customized presentation that will meet your needs and displays their capabilities.
For your vendor review meetings, you should expect each vendor to come prepared to discuss some, or all of the following questions and/or topics:
For Software Transformations:
- Strategic Reasoning: Why is your company seeking to implement a major software system?
- RFQ Process: Are they asking questions regarding your RFQ, or just requesting a meeting to make a sales presentation?
- Internal IT Competency: Are they asking technical questions regarding your IT infrastructure?
- Project Management: Are they asking who will be responsible for project management?
- Software Customization: Have they identified what aspects of their software will require customization to meet your needs in your RFQ?
- Process Mapping: Are they using the process maps of your existing and desired (TO BE) processes, to demonstrate functionality?
In other words, are they taking the time to understand your organizational objectives, goals, and needs?
For Sales Force and Performance Transformations:
- Workforce Readiness: How much of your workforce has been through the implementation of a major transformation?
- Leadership Capability: What is the capability of your Executives and Managers to lead change? (Have they tactfully asked for examples?)
- Performance Metrics: Are they asking how employee performance is measured?
- Employee Accountability: Are they asking if your workforce is accustomed to being held accountable for results?
Should a vendor not ask these questions, you should restate them and ask how your organization should assess these areas. Then listen to their responses. If they are forthright, they will talk about common challenges along with what other companies do to address them. This is a good indicator that the vendor is credible and is taking your questions and concerns seriously. If on the other hand, they provide superficial comments, or indicate that your company should have no issues, think seriously about moving on to the next vendor.
It is also important to carefully listen to how they answer questions. Some vendors when discussing their offering, will tactfully present how their product or methodology “can” do exactly what you are looking for. The word “can” is sometimes code for hidden costs, which you need to be aware of. If you are unsure, ask if what you are talking about is part of their standard offering, or entails extra costs.
The next step after this set of meetings is to have each vendor make a presentation of their particular offering, and how it will meet your company’s needs. Out of this process, you should be in a position to evaluate each vendor and their offering. Engaging your prospective vendors in this manner will provide you with a significant amount of information and insight regarding their capabilities.
No vendor or consultant can guarantee an organization’s success at implementing transformational change. This ultimately rests with the company’s leadership and workforce. However, performing due diligence prior to beginning any major change and assessing the credibility of potential vendors are important steps to guide your vendor review process and selection of the right vendor for your transformation. The financial cost and long term impact of not doing this are too important to ignore.
In the next blog, I’ll review how an inadequate budget usually leads to poor implementation, adoption, and ultimate failure.
This article is based on my forth coming book Rethinking Change Management: How To Implement Transformational Change For Long Term Success, which will be publishing later this year. If you find this article helpful, please share and subscribe to our blogs and newsletter. Stay tuned for further details.
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