The five fundamentals of digital transformation

Enterprises are increasing the scope of service provider engagements beyond delivery by partnering to achieve their digital strategy goals. This demands close collaboration between enterprises and service providers to function with a one-team mentality.

A digital transformation journey must address what, why, who, and how: What does a successful journey require? Why are you on this journey? Whom will it impact? How did you plan the transition journey? Technology often takes the limelight during a digital transformation journey, but a clear objective, leadership buy-in, alignment across all levels of an organization, effective change management, a focus on collaborations and co-creation, and user experience all need as much attention in the digital transformation journey.

In recent unfiltered stories videocast, HFS spoke with IBM and CEMEX about how they unlocked the potential in their digital transformation. CEMEX is a vertically integrated heavy building materials company, headquartered in Mexico. CEMEX has been working with IBM for a decade, and recently set out on a journey to design future business processes of their shared services to better their business outcomes. The videocast uncovered a fine example of an enterprise and service provider partnership embracing the five fundamentals of the HFS OneOffice organization. (Exhibit 1).

Exhibit 1: The HFS OneOffice vision 2025: Five fundamentals of the OneOffice organization.

Source: HFS Research, 2022

How to achieve a dynamic digital organization by focusing on the five fundamentals of the OneOffice organization

The HFS five fundamentals represent the north star for enterprises that want to design their organizations to thrive in the new digital era. The rationale includes unlocking new sources of value through analytics, automation, and artificial intelligence. Here is how the IBM-CEMEX operating model aligns with the five fundamentals of HFS OneOffice.

Improve experiences by connecting front to back offices by leveraging technology

The pandemic required businesses to be more agile; CEMEX seized this opportunity to reshape its shared services and add value while shifting focus from individual tasks to business outcomes. Oscar Elizondo, VP of Global Enterprise Services, CEMEX, wanted to leverage digital technology to change behaviors, and manage the business efficiently, focusing on a superior experience for suppliers, employees, and customers. The CEMEX-IBM partnership goes beyond operational triage, delivering front-to-back-office connections which take advantage of CEMEX’s industry experience and IBM’s technical experience. Khalid Siddiqui, Partner, Global Offering Leader at IBM, also spoke about how IBM generated insights by adding intelligence to data and charting a path for those insights to the plant and relevant field sales team—it is a crucial decision-making step of what needs to be produced, bought, and delivered.

Align employees with the necessary experience and skills

It is important to create an ecosystem that allows people to know the impact of their work on the client’s strategy. Identifying user personas and a roadmap of their roles helps declutter the data they need to scan to get their job done. By providing relevant insights into a role, IBM could elevate an analyst role; analysts could spend more time transforming processes and enriching their roles. Today, some of the analysts at IBM are helping new analysts onboard as they have the attributes and access to intelligence that CEMEX is looking for.

Build an architecture that supports experience and is focused on customers, employees, and partners

IBM converged systems to be a part of intelligent workflows to drive interactions. In partnership with CEMEX, IBM created a platform architecture keeping in mind the design principles and, more importantly, the user experience of different personas (analysts, finance managers, finance directors, and head of operations), and a platform that could be integrated with CEMEX’s digital platform.

Expand people, processes, and technology to include data and change management

“At CEMEX, we believe that our approach to people, process, and technology is very aligned with the HFS OneOffice, and change cannot happen unless you touch the three of them,” affirmed Elizondo. Both IBM and CEMEX emphasized the need for strong change management. CEMEX worked through a strong communications plan to support change management during the transition and to give people the time to come to terms with change. During the migration, both IBM and CEMEX had to work in tandem with a focus on flexibility and agility. Additionally, a strong governance structure was implemented to support the change management plan to maintain diligent stakeholder-level engagement.

To hone its shared services model, CEMEX embarked on a journey to create region-focused groups and Centers of Excellence (CoEs).  Elizondo quoted an example of Over-the-counter (OTC) operations where teams were region-focused to build better competencies. This created a roadmap for future processes as this was related to managing the working capital. IBM infused AI and analytics to turn data into insights that threw light on customer behavior and propensity to pay, which empowered a stronger collections plan. It also took this opportunity to introduce new decision-making and digital twin concepts in business processes without causing much disruption. The configuration of personas and intellectual workflows also provides visibility on the impact on performance and global KPIs.

Collaborate internally and externally to find new thresholds of value

Together IBM and CEMEX reflected on their learnings and experience to design future processes to result in better business outcomes. IBM’s goal was to not only set up stable operations but also bring in enabling technologies to provide insights, it successfully addressed CEMEX’s broad digital transformation agenda to improve customer and employee experience and bring in efficiencies. One of the challenges organizations face after a contract is signed is the lack of executive support and collaboration, but in this partnership, the continuity in designing solutions and implementing was seamless, and they shared responsibility for risks, failure, and accolades received.

The Bottom Line: Service providers must orchestrate a journey keeping in mind user experience, client expectations, and integrating technology with the least disruption to operations.

The IBM-CEMEX partnership is a compelling example of a forward-looking transformation. Learning from the unfiltered story of IBM and CEMEX – sharing ideas, pain points and challenges are vital for successful partnerships. Enterprises embarking on a transformation journey need a game plan; one size doesn’t fit all. A clear objective, efficient use of insights from data for improving the experience, use of technology to provide visibility on their impact on the end goal across all levels, and help enterprises look for new improvement opportunities and build efficiencies must be a part of the transformation journey.