Unleashing the Power of Benefits Realization in Digital Transformations
Fujitsu / July 4, 2023
In today's rapidly evolving digital landscape, countless companies have embarked on expensive digital transformation journeys, only to be disappointed by the elusive benefits they were promised. This all-too-common scenario resonates particularly with manufacturing leaders who have witnessed their digital investments falling short of delivering the expected value. However, amidst this disappointment, there is a subset of top-performing organizations that are successfully reaping substantial business benefits through a value-led transformation approach. The crucial differentiating factor lies in their practice of benefits realization—a vital organizational capability that infuses a business value dimension into digital initiatives.
As you read on, we delve into the significance of benefits realization and explore how it sets successful organizations apart from the competition. By examining the practices and strategies employed by these high-performing companies, readers can gain valuable insights and actionable takeaways to drive their own digital transformations towards tangible and sustainable outcomes.
Whether you're a manufacturing leader or an executive looking to maximize the value of your digital investments, this aims to provide the knowledge and guidance necessary to navigate the complexities of benefits realization and unlock the true potential of digital initiatives.
After working closely with numerous Fortune 500 executives, it becomes evident that benefits realization is a crucial capability that often goes overlooked. This capability involves using a modeling technique known as Results Chain, which focuses on articulating, targeting, and achieving key business outcomes while navigating the changing dynamics of an organization and its business environment. Surprisingly, many executives mistakenly believe that benefits realization is already a corporate competency, leading to missed strategic goals and unnecessary exposure to competitors.
Planning for Benefits
The traditional technology-led approach to transformation often falls short of delivering the desired business outcomes. Typically, manufacturing organizations focus on functional requirements and prioritize them based on features rather than their potential for generating the greatest business value. Furthermore, the lack of well-articulated, targeted business outcomes exacerbates the problem. The result is a transformation that fails to meet an executive sponsors' expectation, primarily because the linkage between initiatives, capabilities, and targeted outcomes was never established.
The Outcome-Led, Capability-based Approach
To address these shortcomings, an outcome-led, capability-based approach proves to be more effective. By establishing a clear linkage between targeted outcomes, required business capabilities, and the corresponding projects or "epics," organizations can align their transformations with corporate strategy. This approach facilitates successful transformations and enables the identification and prioritization of critical business capabilities. Through this process, measurable benefits associated with each capability can be validated and aggregated, helping determine which capabilities are crucial for achieving desired business outcomes.
The Secret Sauce
Although organizations have been slow to adopt benefits realization, it is becoming increasingly recognized as the missing link for achieving business value. The Results Chain modeling technique is gaining traction among companies of all sizes, including Fortune 25 companies. This modeling technique visually represents the various components of a transformation, highlighting their interactions and value contribution, thereby ensuring full traceability from project to outcome. Additionally, risks and assumptions are addressed early on, minimizing costly surprises down the line.
The Results Chain modeling approach involves stakeholder interviews and workshops to iteratively build a comprehensive model. Executive interviews establish or validate targeted outcomes and ensure top-down organizational alignment. Director-level interviews help identify intermediate outcomes, required business capabilities, and ongoing initiatives. Workshops provide a platform to discuss outcomes, initiatives, and dependencies, ultimately developing a detailed model. The modeling process informs the benefits register, which supports Digital Outcome Monitoring—tracking the delivery, adoption, and value realization of key capabilities.
Realizing Business Benefits
Increasingly, manufacturing companies are prioritizing critical business benefits throughout their digital transformations and leveraging Results Chain modeling to facilitate this process. This elegant modeling technique bridges the gap between initiatives and business outcomes, providing the necessary traceability to deliver value. However, modeling is just the first step. Ongoing monitoring and management of digital business benefits are crucial for sustained success.
Conclusion: Embracing Benefits Realization for Digital Success
Manufacturing leaders that are looking for a clear path to business value in their digital transformations should embrace benefits realization and adopt the powerful Results Chain modeling technique. By leveraging these approaches, organizations can significantly de-risk their transformation programs, align their teams, deliver key capabilities, and achieve critical business outcomes. Stay tuned for our next article, where we delve into the ongoing monitoring and management of digital business benefits.