Plan for Change
It’s the 4th quarter, and budget-planning season is upon us. Digital transformation is top-of-mind, but figuring out where to start can be tricky. Unlike most other expenses, digital transformation is not a static event – many changes, updates, and alterations may be necessary throughout the process. In most cases, expectations change as information becomes available, leading to an end result that’s slightly different from the original plan. With that in mind, it’s important to know that when creating a financial plan for digital transformation, flexibility is key.
Unfortunately, flexible is not a word that’s often used to describe a budget plan. So, how do we overcome the fear of flexibility?
Traditional Budgets vs. Digital Transformation Budgets
Most budget items are based on fixed costs, and many internal projects can be planned and executed within a short time frame. These expenses are easy to justify, as they are clearly defined up front. Due to the lengthy nature of most digital transformations, typically 6-12 months, it’s much more difficult to lay out exact costs for the project as a whole. One solution is to break up the project into shorter phases, each one lasting only two to four weeks. This practice can help identify the project’s ROI and inspire executives’ approval by showcasing the benefits of each phase.
One Step at a Time
Another helpful tool in the planning process is “Data Discovery.” This is a preliminary process, requiring only a small up-front investment, which helps define the parameters of the project. If mapping out a budget for the entire digital transformation seems like an overwhelming task, entering a budget line for Data Discovery may be a good place to start. This up-front cost is minimal, and is sometimes applicable to the remaining balance of the digital transformation, upon approval of the project. In addition, case studies and proofs of concept that align with your industry, may be provided. Again, this practice offers visualization of the project’s ROI and allows executives to weigh benefits of the long-term goals.
The Big Picture
Keeping those end goals in mind is an important part of the budget planning process. It’s often difficult for execs to consider approval for a project that will take up to a year, or more, to complete. Remember, showcase the little wins along the way by breaking the project up into shorter phases, and when applicable, offer examples of success in similar industries.
For more information on digital transformation, or to inquire about Data Discovery for your company, contact Inner Join Technologies at email@example.com.