Staying true to digital transformation in times of change

By Fred Sandsmark

August 10, 2020

A dramatic change in circumstances, such as a global pandemic, can derail a digital transformation program with serious, detrimental effects. According to a recent article in CFO Dive, CFOs are “too preoccupied by the pandemic to make the shift to automation even though they know doing so would improve their ability to respond to it.”

When COVID-19 hit, Deluxe—a provider of technology-enabled business services to small businesses, enterprise clients, and financial institutions—was in the midst of a companywide digital transformation. Rather than back off, Deluxe remained true to its transformational vision, and this unlocked some unanticipated improvements. Their story offers lessons and inspiration for companies in similar circumstances—which is just about everyone these days.

Deluxe’s Chief Financial Officer Keith Bush and Chief Information Officer Mike Mathews recently talked with Anaplan about their experiences in the first half of 2020. This blog post recaps some high points, but we invite you to listen to the entire conversation.

Growth without integration

Deluxe was founded in 1915 by W.R. Hotchkiss, inventor of the checkbook. Starting around 2000, company leaders began acquiring dozens of companies—from digital marketing to printing to payroll services—to remake the company for the 21st century.

Although the sprawling company was profitable and loved by customers, growth by acquisition brought a pitfall: Deluxe became what Mathews calls “a company of companies,” with disjointed IT to match. For example, Deluxe used more than 50 Enterprise Resource Planning (ERP) systems, dozens of customer relationship management (CRM) tools, and many planning and modeling software solutions. This fragmentation made it difficult to deliver products and handle sensitive customer information at an enterprise level.

Mathews and Bush set out to build an IT model that would enable Deluxe to operate as a unified whole. They chose six technology “flags” that would be used across Deluxe: SAP S4 HANA for ERP; Microsoft for collaboration; Salesforce for CRM, commerce, and marketing; Cloudera for data; Workday for Human Capital Management (HCM); and Anaplan for planning.

Then came the coronavirus

The company was well down the path of adopting the six flags when the coronavirus struck. Within two weeks, Deluxe needed to move some 1,200 people—and their digital tools—from offices to work-from-home arrangements.

Mathews and Bush could have put the transformation plans on hold, but instead they continued to move forward on their technology investments and turned plans into reality. “It's very fashionable to talk about cloud-based applications and capabilities,” Mathews explains. “But in a moment of crisis, like COVID, all of a sudden you realize [that] with the appropriate security and a certain level of processing capability that … people can work anywhere, at any time.” Because the move protected employees’ health and safety in addition to the company’s well-being, the workforce embraced the transition.

Physically distant, but more collaborative

The new arrangement had a surprising effect. “We're trusting one another in a way that we probably hadn't before,” Mathews says when asked to describe the situation today. “We're so physically dispersed at this point, [but] the platforms allow us to communicate and connect more frequently and more openly and share more collaboratively.”

Based on their experiences, Bush and Mathews have some advice on how to stay true to a technology vision in a changing environment:

  • Focus on broad, strategic objectives. “Keeping an eye on the horizon” is key to making continuous progress, Bush says. “What we’re trying to do is take the company to a new place,” he says, not nibble around the edges. “That opens up a lot of opportunity to do things in a bigger way.” It also empowers a simpler approach to problem-solving.
  • Create a technology framework based on transformational capability rather than specific tasks. Base technology investments on outcomes rather than cost and look for technology that provides maximum flexibility.
  • Don’t let constant change paralyze you. “It is incredibly important during these difficult times that you just keep making progress,” Bush says.
  • Be process-led and outcome-driven and let the technology follow. Technology-led transformation projects are more likely to fail, Mathews believes.
  • Remember that transformation requires people, both front-line workers and leadership. The CFO and CIO lean on each other constantly. “There’s no doubt that, by the two of us working closely together on this, we’ve been more effective than we would have had either one of us tried to push this initiative on our own,” Bush says.

Planning at a new pace

How have the coronavirus and ongoing digital transformation affected planning at Deluxe? The company’s initial moves with Anaplan were in sales incentives, and that remains critical in the new business environment. Indeed, the need to motivate salespeople has increased as the company realigns toward organic growth after a decade of acquisitions.

As planning transformation moves into finance (starting with CapEx forecasting), the big difference is that the company is moving from a variance point of view—looking at the past and trying to explain what happened—to being heads-up and looking forward. Doing that at the corporate level will require a new level of agility, and Mathews believes lessons learned in the current business environment will prove beneficial.

“Modeling and ‘what-if’ planning, literally in real time, is more important today than it’s ever been,” he explains. “Given the pace of change, we certainly learned this with COVID.”

Listen to Deluxe’s CFO Keith Bush and CIO Mike Mathews discuss digital transformation in times of change.

Watch the webinar