Companies spend billions each year to migrate critical business systems such as ERP to the cloud, enabling the office of the CFO to dramatically improve operational efficiency and reduce costs while taking advantage of innovative automation and AI capabilities and proactively managing risk.
This move to cloud computing is only accelerating as companies race to rethink their operating models and create more value for customers, shareholders and employees. Gartner projects worldwide spending on public cloud services to reach $679 billion in 2024 and to exceed $1 trillion in 2027. And senior finance executives are expanding their influence on these critical technology investments, according to a study conducted by SAP and StrategicCFO360.
But a large percentage of firms fail to realize the coveted payback on these investments and encounter major obstacles, including cost overruns and frequent delays, as they migrate to the cloud (McKinsey).
Why Cloud Migrations Fall Short
What’s going on? We believe the core problem is inappropriate project oversight made worse by talent shortages. Companies turn over many key project tasks to outsiders such as systems integrators (SIs), who have deep technical expertise but often lack familiarity with the client’s operations, cloud objectives, internal politics and employees.
Getting outsiders up to speed can take time, and program management offices (PMOs) can struggle to weave outsiders and insiders on cloud migration initiatives into a cohesive whole. They often emphasize hard skills (functional and technical attributes of key players) over cultural fit.
A one-culture team can be the difference between cloud migration success and failure.
Creating a One-Culture Team
To overcome these pitfalls, firms should use what we call a “Dynamic Workforce model,” which takes advantage of the best cloud migration talent available — hot-shot coders, data modelers and implementers, FinOps experts, or workflow designers — regardless of where they reside, internally or among SIs, consultants and gig workers.
This involves purposefully selecting a combination of employees and outside talent to create project teams with the right mix of technical skills and functional knowledge – and, of course, personalities that blend well. Employees on the team typically handle financial and some project management tasks that jibe with their institutional and operational knowledge. Individuals from the SI firm tackle technical challenges like configuration management. Independent contractors provide highly specialized technical skills applied from previous cloud migration projects they worked on.
Ultimately, all of these individuals must be able to work together as a one-culture team with the same values, beliefs, and behaviors.
Leading with Empathy
RGP’s 2023 survey of more than 1,000 companies in North America, Europe and Asia found the companies that succeed most often in business transformations take advantage of a Dynamic Workforce. But making the Dynamic Workforce model work requires an experienced and empathetic project leader. This individual facilitates collaboration among disparate and dispersed team members and heads off differences that may sidetrack the project. The leader is typically neutral — neither an employee of the firm nor of any systems integrators.
Leaders must treat everyone equally and prevent an ‘us-versus-them’ divide to build a team of ‘we.’
What’s more, project leaders must bring exceptional soft skills like conflict management. Importantly, they must screen team members to ensure their collaboration and communication skills are as strong as their functional or technical expertise.
Ensuring a One-Culture Team Takes Hold
We recently helped create a one-culture team at a NASDAQ-listed digital marketing firm, which underpinned the project’s success. After first gaining a deep understanding of our client’s organization and objectives for the migration, we stressed the importance of strong client stakeholder sponsorship — in this case, the CFO.
So that team members had the same understanding of the project’s goals and challenges, we worked with our client to do the following:
- Detailed the responsibilities and expected outcomes, including governance and decision-making roles.
- Stressed that team members would not be treated differently based on who they worked for.
- Created an environment conducive to sharing knowledge, such as scheduling weekly meetings and establishing collaboration sites where all team members could access project information and “in progress” deliverables.
- Prevented misunderstandings, by providing an open and transparent description of the client’s culture to all team members.
- Established feedback loops to address concerns and highlight improvement opportunities.
- Held “lessons learned” sessions after each major milestone.
Ultimately, we delivered the project on time and under budget.
A one-culture team can be the difference between cloud migration success and failure. For instance, SIs or other contractors may pursue their own agendas, which can undermine collaboration. And, sometimes, two departments within a client’s organization don’t agree on key components that affect both — such as a payroll system to be used by finance and HR. Moreover, the IT team may withhold cooperation due to worries they won’t be needed post-migration.
Addressing such cultural challenges and communicating openly and frequently is essential to project success, our research found. Ninety-seven percent of the 278 people we surveyed in the IT/digital function ranked “camaraderie, positivity, and a strong team culture,” as the top drivers of success.
Leaders must treat everyone equally and prevent an “us-versus-them” divide to build a team of “we.” This is a challenge in cloud migrations, where the stakes and stress levels are high and skills are in short supply.
Here are tips for building a one-culture team that will help you overcome the people-related challenges that can lead to project failure and advance your organization’s cloud ERP migration goals:
- Dismantle silos across IT and business units and replace them with cross-functional teams led by the best available talent — regardless of whether they’re employees, consultants or gig workers.
- Align goals and objectives across the project to instill a shared purpose.
- Allow team members to experiment with new technologies and more creative approaches to solving challenges.
- Provide learning and professional development for all team members to keep pace with the swift evolution of cloud technologies and the business change they enable.
Considering or planning a move to cloud ERP? Get expert guidance for a smooth, successful migration from system selection to strategy and planning to successful execution.