Phase Zero - Starting Your Digital Transformation Journey
Getting to Zero
Several years ago in my role as Senior Manager with a Tier One consulting firm, I led the pursuit of a human resources software implementation project. Landing this deal would have represented the beginning of what was to be a multi-year, multi-million-dollar program. The prospect was at the beginning of their “transformation to the cloud” on a new software-as-a-service human capital management platform. Importantly, this opportunity was significant as there were few deals in my sales funnel of this magnitude. I needed to make a good impression for many reasons and I was still in the early stages in my time with this firm.
Everything went according to plan. The sales presentation with the prospect went exceptionally well. We were able to establish our credibility and reputation, and our pitch was well-received by the selection committee. Within a couple of days, I was contacted by the prospect’s procurement lead to congratulate us on winning the bid. Understandably I was ecstatic and, at the same time, incredibly relieved. So much pressure had released as I savored this great news. Then something went horribly wrong.
After the call from procurement, an uncomfortable silence ensued. And then I started to become anxious. Leadership was pressuring me for a project kick-off date. The call finally came. The client had decided to go forward with another firm. To say I was stunned by the news is an understatement. How could this have happened? I later learned that, in the two days following our firm’s sales presentation, the sponsor had been sold on an entirely different implementation approach than the one they had asked for in the procurement process. Phase Zero. Instead of implementing the first module in a series of many implementations to follow, the prospect was convinced to pursue a Phase Zero approach – to essentially conduct a program planning phase to launch the multi-year transformation journey. This would be followed by three or four implementation phases.
I learned the hard way that there are many times when the client is not always right. As it turns out Phase Zero is ALWAYS the right way to begin a transformation journey.
Phase Zero
“Business leaders will be digitally transforming their companies for the rest of their careers” (McKinsey, 2023)
Digital transformations are about “…having digital technology become the backbone of new products and services, new ways of operation, and new business models” (Digital HR Strategy, S. Sen, Kogan Page, 2020). More recently, McKinsey described Tech & AI transformation as “the process of developing organizational and technology-based capabilities that allow a company to continuously improve its customer experience and lower its unit costs; and over time, sustain a competitive advantage”, E. Lamarre, K. Smaje, R. Zemmel, Wiley, 2023). In the context of HR, I like to think of digital transformation as the perpetual pursuit of excellence in the delivery of digital products and services that create better places to work with more capable and agile workforces. Long gone are the days of ‘set it and forget it’ software implementations in which an HCM platform has a 10-year shelf life. Today’s organizations are bombarded with unprecedented change across socio, technical, political perspectives that transformation has become a perpetual necessity for survival. Phase Zero planning, also known as pre-implementation planning, is the best way to begin your transformation journeys.
As digital HR technologies like SAP SuccessFactors, Workday and Oracle HCM continue to evolve at unprecedented rates, so too do the organizational demands needed to leverage those enhanced capabilities across the employee lifecycle. Digital HR program teams must continually evolve their digital capability and capacity to deliver and sustain better solutions and business value. Many changes will be small and incremental. Others will require more extensive, complex and transformative programming. Phase Zero planning is about taking a disciplined approach to program and pre-implementation planning for complex digital transformation initiatives. Programs focus on delivering business value by managing multiple related projects in a coordinated manner - generally over multiple phases and several years. Pre-implementations focus on the preparatory activities needed for an upcoming program phase.
Examples of transformational business challenges that are best addressed through Phase Zero planning:
Becoming a skills-powered or skills-based organization (SBO)
Developing an HR technology strategy to address high levels of technological debt and duplicity
Launching a greenfield on-premise-to-cloud transformation program (e.g., SAP HCM to SuccessFactors)
Optimizing the business processes and operating model of a brownfield or existing Workday solution
Reimplementing a failed implementation program (e.g., low adoption, external workarounds, shelfware)
The key purpose of Phase Zero planning is to establish the conditions for transformation success BEFORE solution build or configuration begins. When implementing or optimizing digital HR platforms, many program teams skip or abbreviate Phase Zero planning in favor of moving quickly into the solution development activities of the implementation phase(s). This technology-centric approach often overlooks foundational components of the transformation and is why most digital transformation programs struggle to achieve success (see why only 30% of digital transformations succeed). To better understand what Phase Zero planning is, why it’s critical to digital transformation success, and how to go about building a Phase Zero Program Plan that’s right for your organization, this blog examines 5 key stages of Phase Zero planning.
Five Stages of Phase Zero Planning
Based on my 25 years of experience delivering digital HR programs with public sector and mid-to-Fortune 500 organizations, I have found the following approach to Phase Zero planning to be particularly helpful (see Figure 1 below). I break up Phase Zero planning into program planning and pre-implementation planning. Program Planning - which includes Align and Mobilize stages - generally happens once at the START of any transformation program. It helps provide a common foundation or platform from which to launch all implementation phases in a consistent and predictable manner. Pre-implementation Planning, on the other hand, occurs at the start of EACH implementation phase. It is a planning framework used to help ensure the implementation phases (phase 1 to n) are set up for success at the time they are ready to be implemented. Whether you use these five stages or prefer to work with another framework (e.g., The Five Essentials of Implementation Planning in Phase Zero), Phase Zero planning helps you avoid the high probability of failure that comes with digital transformation programs. Depending on where you are on your transformation journey, it may make sense to skip a stage or two. However, if you do skip ahead, it is important to make sure you have the key components in place for any prior stages. Let’s explore what each of these stages are, why they are key to a successful digital transformation, and how to go about delivering them successfully with recommended activities and deliverables.
Figure 1. Using Phase Zero Planning to Improve the Odds of Transformation Success
Program Planning: Stage 1 - Align
The Alignment stage is critical for addressing the what, why and when aspects of the digital transformation program. Good alignment is like having a rudder to guide the transformation program - particularly in heavy seas and during times of program turmoil. To ensure good alignment, executive sponsors and key stakeholders must agree on what business problems need to be solved, why a digital transformation is needed, and when the transformation phases should take place. Together, these help program teams align on a Program Vision and are key to securing the right level of funding and the appropriate level of executive sponsorship and commitment. Alignment also clarifies the purpose and guiding principles of the transformation. These help keep the program team engaged and focused on the program’s objectives, how to effectively work together, and how to make challenging scope and design decisions. Alignment serves to excite and engage program end users/customers about what is to come. Without alignment, the program is at risk of not having a rudder to guide the program team nor the leadership and financial support needed to navigate difficulties that can derail the program.
Activities and Deliverables to Consider:
Executive Visioning Workshop to establish a North Star Vision (or Massive Transformative Purpose) and Objectives and Key Results (OKRs) that will guide your program
Problem Statement to clarify your current state (current challenges), your ideal state (what good looks like), and how you propose to deliver the ideal state (high level approach)
Technology Inventory - inventory your current technology landscape against your current process or product areas (e.g., recruiting, learning, performance). For each application identify purpose, number of users, license costs (if applicable), support costs. This exercise helps identify duplication, redundancies and ‘tech debt’ - “the cost in money and effort required for an organization to keep its IT systems up-to-date and capable of meeting business needs” (Accenture).
Business Case & Value Realization Plan - good practice includes preparing a detailed business case to justify the investment required for complex digital transformations. This often includes qualitative and quantitative benefits, costs and a break-even-analysis. A Value Realization Plan follows Phase go-lives to ensure OKRs are tracked and reported back to leaders to demonstrate that business case benefits have been realized. NOTE: Cost estimates and OKRs will be further refined during Pre-implementation Planning (stage give - Plan) for each implementation phase.
Delivery or Operating Model - how digital projects are delivered will likely require some revisions - particularly if moving from traditional on-premise models (using waterfall methods) to more cloud-friendly software-as-a-service (SaaS) operating models (using hybrid and/or agile methods) (see Improving Your Digital Proficiency with Product Management).
Governance Model(s) - how programs and projects will be managed, how escalations will be processed and how decisions will be made (e.g., strategy, process and data ownership) will all need to be (re)considered as part of the program’s governance model(s). In simple terms, this typically requires a Steering Committe of executive-level stakeholders and a designated sponsor, a Core Program Team, and one or more project teams. Depending on the scale and complexity of the transformation, the Core Program Team can be comprised of a Transformation/ Program Lead (reports to the Steering Committee), a Change Management Lead, Functional or Product Leads, and a System Architect. Like most teams, it's a good idea to keep the core team to between six and eight people. Roles and responsibilities should be well-defined for all.
Program Charter & Roadmap - this strategic control document will summarize the program vision, OKRs, approach, high level multi-phase roadmap, governance, risks, assumptions and constraints. It is critical for guiding all downstream planning, budgeting and execution activities and for keeping the program team aligned to program purpose throughout the implementation phase(s).
Program Planning: Stage 2 - Mobilize
Once the Program Charter and Roadmap have been approved, the program team can focus on standing up the PMO, onboarding the core program team and kicking off the initiative with key stakeholders. To ensure program success, it is important to have the following in place: a consistent way to deliver programs and projects (tools, methods, frameworks), integrated project planning and reporting, clear role mandates, and the right talent. All are key to ensuring consistent expectations and the successful delivery of program phases to follow. Without this, projects will be led inconsistently (generally with tools and methods supplied by the various vendors), and most will be understaffed (the number one reason digital transformations fail) - creating undesired redundancies, confusion, duplication and risk.
Activities and Deliverables to Consider:
PMO Mobilization - if an enterprise PMO already exists, it is important to align the HR transformation program with it to leverage existing tools, methods and infrastructure (e.g. PMO systems and applications like Confluence, MS Project or Smartsheet, Jira, Miro or Mural, etc…). If an enterprise PMO does not exist, now is the right time to establish one to drive consistent programming across the multi-year roadmap.
Resource Planning - now is also the time to ensure program/project roles, responsibilities and headcount are planned for as per the Program Charter.
Onboarding the Core Team - using the Resource Plan, onboard and backfill with the right resources. It is important to assign top talent to critical program roles and to free them up from their day jobs to ensure success and avoid burn out. Where necessary, leverage contingent talent for back-filling operational roles.
Program Kick-off - with the core team onboard, kick-off the multi-year program with key stakeholders. This helps align expectations, communicates critical information to those most impacted by the transformation, and answers key questions like why, what, when, where, how and who.
Pre-implementation Planning: Stage 3 - Discover
Following program kick-off, the core project team leads a series of discovery workshops to identify key learnings from the current state, to define the desired future state, and to capture high level requirements (functional and technical). Design Thinking methods should be used during the Discover stage to help ensure that the requirements reflect the desired employee experience.
Discover occurs prior to the Design stage in order for the project team to better understand current pain points and opportunities and to clearly articulate what the business needs before technology constraints influence solution design decisions during the Design stage.
Activities and Deliverables to Consider:
Current State Assessment - using a combination of assessment tools and design methods like surveys, journey mapping, personas and sentiment analysis, analysts and facilitators work with stakeholders to uncover pain points and opportunities associated with the current in-scope environment. Ideally this involves an analysis of current state process maps and associated artifacts like configuration workbooks and business requirements documentation (BRD)
Target State Design - using the Current State Assessment as a key input, facilitators help project teams and SMEs surface high level business requirements of an ideal target state
BRD Documentation - business requirements are then qualified (functional, technical) and prioritized - using a value-based approach that considers desirability, viability and feasibility
Pre-implementation Planning: Stage 4 - Design
Once the BRD has been finalized during the Discover stage, the program team switches the focus to solutioning during the Design stage. Now is when the team is able to use the business requirements to flesh out technology-agnostic target state workflows or process maps that are streamlined and deliver the desired employee/user experience. It is important that the constraints of any technologies are NOT part of this process so that the design team is free to consider what the ideal experience would look like (the constraints will be considered during subsequent steps). If employee experience is particularly important, the team should consider Service Blueprinting as a method for capturing the people and technology hand-offs. SIPOC Mapping (sources, inputs, process, outputs, consumers) is also recommended to ensure the upstream and downstream process data flows are clearly captured.
Once process mapping is complete, Fit-gap Analysis is used to identify and troubleshoot any gaps the incumbent system(s) has in supporting the desired future state design expectations. It is during this time that the team determines whether a replacement system is needed (too many critical gaps), if a third party extension app(s) is needed (key gaps), or if manual or policy change workarounds will suffice (minor gaps). Once gaps have been researched and solutioned, a Solution Design Summary is developed that clearly articulates the high-level technical details of the target state solution including system requirements, configuration scope, system gaps and how gaps will be addressed. This is also referred to as the Scope Statement.
By investing in good design work up front, the program team will be able to identify and mitigate the solution gaps BEFORE the implementation. This is one of the easiest ways to avoid program derailments during the implementation phase - at a time when the contingency to properly resolve gaps will not exist.
Activities and Deliverables to Consider:
Workflow/Process Modelling - essential deliverable that provides visual clarity to requirements, helps qualify user experience and identify gaps, and is instrumental for designing effective target operating models (TOM) and change management programs
Service Blueprinting - structured diagram for showing how a service is delivered from both the employee’s and HR team’s perspectives. Used for process improvement, it considers front stage interactions with the employee, backstage interactions amongst the service teams, and the supporting system interactions.
SIPOC Mapping - a visual representation of the upstream and downstream systems and data flows for a given process. Used for process improvement, SIPOC stands for Sources, Inputs, Process, Outputs, Consumers.
Fit-gap Analysis - working with technology and system integration partners, identify any system gaps and troubleshoot workarounds.
Vendor Selection - if gaps remain, you may need to go to market for extensions or third party solutions to augment the current technology landscape.
Solution Design (Technical Scope) - document the high-level technical scope by function/product to identify high level requirements, known gaps and workarounds, and any remaining risks and risk mitigation strategies.
Pre-implementation Planning: Stage 5 - Plan
With the Solution Design in hand, you have completed the majority of your due diligence. You have the right solution for the business requirements, and you have identified and addressed any gaps from a systems point of view. You have also identified the appropriate process and service expectations for both end users and support teams. Now it is time to develop the Implementation Plan for the upcoming implementation phase (1 to n). The (pre-implementation) Plan stage begins with conducting impact assessments by functional, technical and people perspectives. These assessments help identify prospective people, process, technology and data effects of the proposed future state. In other words, what should be considered and what will it take to deliver the proposed solution? These are key inputs to creating a defensible Implementation Plan. The final step of the Plan stage is to develop and present an Executive Summary for review, tuning and approval by the program sponsors and HRLT.
Activities and Deliverables to Consider:
Impact Assessments - functional, technical and organizational impact assessments of the solution design and supporting documentation (e.g., process maps, service blueprints). These assessments help ensure key considerations are identified and factored into the implementation planning efforts.
Implementation Plan - high level plan that includes (at minimum) high level scope, approach, roadmap, resource plan and budget. Prepared in this way, the Implementation Plan is a defensible summary of what the solution is and what it will take to deliver it.
Executive Summary - a summary of the Implementation Plan with highlights and financials. It clearly articulates the why, what, when, where, how, how much and who of the implementation phase. It should also include the value realization plan and any break-even analysis (if available).
Summary
Digital transformation programs are an essential part of the HR mandate to deliver effective, employee-centric services and programs. At the same time, they are complex and fraught with many risks and challenges that often result in failure. Phase Zero planning helps you and your digital team navigate the complexities and risks known to derail digital transformations.
If you need help building a case for, or delivering your Phase Zero planning, please contact us.
Further Reading
To learn more about why digital transformation success is so difficult to achieve read Why Digital Transformations Fail
To learn about building your transformation team’s digital proficiency read Improving Your Digital Proficiency with Product Management