Successful business and digital transformations are about more than installing new or updated software.
Medical technology business InveTech had retained its previous platform for over two decades. That platform was complemented by a range of in-house bespoke applications.
Janet O'Meara, the CFO and Head of IT at InveTech, explained.
"We're a medtech business that works with life science companies to design and build complex diagnostics, and cell and gene therapy equipment. It's a complex business model because we have long term projects and FDA regulated manufacturing in Australia and in the US. We also had a range of sort of disconnected products because our engineers, if we had to do something, they'd just design it. For example, our purchase requisitions were designed by one of our engineers and sat standalone."
Brendan Tanner, the Head of Finance at accounting and advisory form McGrathNicol, faced similar challenges.
"We had an older on-premises ERP that was at the end of its supported life, so we had a trigger point that was part of our process. That platform was being updated by the maker, but we went a little bit broader to make the best decision for where the firm was moving. We broadened the range of services we deliver and needed to move to something that was going to be a bit more flexible as we move forward," said Tanner.
The shift to SAP S/4 HANA and adopting what SAP calls 'Clean Core principles' - a simplified, standardised cloud foundation designed to accelerate innovation and reduce complexity - proved pivotal to the success of both companies' transition.
"I think a lot of the benefits that we got in the early days are now just baked in. They're just assumed as BAU. Staying as close to standard as we could has set us up really well," said Tanner.
O'Meara added the regular updates that that come as standard now that InveTech operates a Clean Core ensure that industry best practice is delivered without the pain of complex upgrades or bespoke customisations.
A key to the success of any major transformation project is ensuring that every impacted party is engaged in a timely and appropriate way. For an technical organisation like InveTech, the challenge meant ensuring a technically adept team of engineers needed to be involved.
"Most of our people are engineers," explained O'Meara. "They're extremely smart people so we knew that we had to have them on board right from the start. When they look at something they're very good at figuring out how to break it. And, believe me, they did a pretty good job. When we went into the implementation process, we were comfortable with how the technology implementation would go, but we really focused on the change management as a separate swim lane in our implementation."
In one instance, a member of the engineering team found that upper limits for purchases weren't set, and they were able, in testing, to order a $10M Ferrari. This happened because O'Meara and her team held regular 'Lunch and Learn' sessions and allowed people to play on a development site to familiarise themselves with the new system and to iron out issues.
For McGrathNicol, getting the business engaged in the change was straightforward but there were some post-implementation challenges.
"We had good buy-in. Everyone was keen as they hated the old system. The hard work starts when you go live and we didn't get that quite right," Tanner said.
Tanner said they leaned into using webinars, video and quick reference guides. While that seemed like a solid approach they found that they needed more, which they were prevented from doing as they took on the upgrade just before the pandemic changed things.
"Once we got the first couple of months of stabilisation in place and we were ready to go and start doing workshops, the world shut down. While the approach we took worked, it's important to communicate continuously. But there is a place for workshop-type training which we didn't take advantage of," he added.
Both O'Meara and Tanner said there have been significant measurable benefits because of their move to SAP S/4 HANA and Clean Core. For McGrathNicol, month-end processing has been shortened and the reliance on external spreadsheets and manual processing has been reduced. Similarly, InveTech is now processing about 35% more invoices that before without an increase in headcount.
Unsurprisingly, both organisations see AI as part of the future.
"It's not replacing jobs, but it's helping improve and automate parts of people's day jobs. We are taking advantage of those where they appear in various modules and in the core finance," said Tanner.
InveTech and McGrathNicol show that a successful digital transformation is built on more than new software. It requires a clear migration strategy, an approach that delivers ongoing best practice without costly customisations, and a disciplined change management plan that engages every stakeholder.