5 reasons why core system transformation goes wrong

Most companies undergo a core system transformation at some point in their existence. For a variety of reasons, these projects often go wrong. In this blog post, we will explore five common reasons why core system transformations often fail. From that, you could have some practical advice on avoiding these pitfalls and ensuring your project is successful. Stay tuned!

Applying current operations to the new implementation

Many organizations are under pressure to transform their core operations to remain competitive. In response, they often put the operations team in charge of the implementation. However, this can be a mistake. The operations team is usually responsible for running the existing system, so they may lack the technical expertise and objectivity needed to design and implement a new one successfully. 

In addition, they may be too close to the current system to see its potential flaws. As a result, putting the operations team in charge of the transformation can often lead to delays, budget overruns, and other problems. It is usually better to appoint a separate team of experts to oversee the transformation. This team can work with the operations team to ensure that the project stays on track and meets its goals.

Late to engage stakeholders on the new system

Aligning stakeholders to the function and scope of the new system is essential for a successful core system transformation. Without alignment, key decision makers will be working at cross purposes, leading to confusion and delay. 

Additionally, failing to align stakeholders can result in a lack of buy-in from those using the new system daily. As a result, it is essential to take the time to ensure that all stakeholders are on the same page before moving forward with any business system transformation.

Long-term implementation phases

The most common cause of failure in business system transformation projects delays planning and implementation. This can lead to years of stagnation as businesses struggle to adapt to new technologies and processes. In order to succeed, it is essential to start planning and implementing immediately. By doing so, businesses can avoid the pitfalls of delay and ensure a successful transformation.

Keeping legacy components to exclude a broader system revamp

The reason for this is that legacy components are often not designed to work together with newer solutions, which can lead to integration issues, data inconsistency, and performance problems. Additionally, relying on legacy components can also limit an organization’s ability to take advantage of new innovations and technologies. 

As a result, it is often best to consider a complete system revamp when embarking on a business transformation project. While it may require more upfront investment, doing so will ultimately provide a more robust and future-proof solution.

Prioritizing price while choosing partners

A company’s core business system is the set of processes and technologies that it relies on to produce and deliver its products or services. When these systems are transformed, it can have a profound impact on the company’s performance. Yet, all too often, companies choose their transformation partners based on price rather than capability. 

As a result, the transformation process often goes wrong, leading to cost overruns, schedule delays, and subpar results. To avoid this outcome, companies need to carefully assess the capabilities of potential partners before making a decision. Only by choosing the right partner will they be able to ensure a successful transformation.

Final thoughts,

Despite the best of intentions, many core system transformations go wrong. The five reasons we’ve outlined provide a starting point for understanding why these projects often fail. If you are considering a core system transformation, it is important to understand these potential pitfalls and take steps to avoid them. At SMARTOSC Fintech, we have helped numerous organizations successfully navigate large-scale changes to their business operations. Contact us today to learn more about our services and how we can help your organization achieve its goals.