Why Most AI Transformations Fail and How to Fix It

Absolutely. their customer, their, their reps were very interested in their sales reps were very interested in the customer service side of things as well and needed everything in one place. And by the time we got done explaining how a system could actually work that way, the light bulb, so to speak, went off with the executive team and said, well, we need to be doing this, you know, but we need to find the right product. And, and, and there are several amazing CRMs out there. Dynamics 365 is one of them. know. You know, Salesforce is right up there where you're going to, you're going to see a lot of the big organizations competing. And what I, what the explanation and the, and the education that we provided was that it's not as much about at that point, which product you pick. Sure. There may be a few nuances either way of why one is better than the other. It's all about how you use it and how, how you mandate it to use internally and how you manage that change in your organization to

There's a resolution to make sure that it gets adopted. I always like all the shelfware that we see in technology is primarily because somebody had the will to buy it, but there was no will to actually make good use of it. Otherwise there would be no shelfware in the software industry.

That's right. Ryan Pollyniak (04:25.24) Yeah, Taron, absolutely well said. so that unpacking what it actually means to connect people to technology, there are many facets to it. You you could tell them, okay, we're going to change. We're going to get a CRM and everybody's going to use it. Okay. End of meeting, right? No, it can't be that way. If anybody has kids, you know, you tell them to do something. And the first question out of their mouth is what?

Why do I need to do this? Yeah.

Why do I need to do this? Right. Well, you know, explaining that further and having a plan before you go to implement the software, not when you're in user acceptance testing, but before you go and embark on this project in terms of here's why we need to change organizationally. And here's how it's going to benefit you, right. As a salesperson, as a sales director, as a VP. you're going to be able to keep track of your pipeline and to communicate better and to follow up better. And it's going to help the company grow. It's going to help your career and your compensation. So connecting the dots in terms of not just we're changing and here's why, but also why we're changing and why it's going to help you. And here's how we're going to help you do it. We're going to go through a project with a consulting firm. I don't recommend short-cutting it guys. And I've heard this before, right? We're going to Well, we just want to get our hands on the software and look at it and we'll figure it out on our own to save the consulting cost. It's going to fail. You have to have experts. You have to have people who have been through these changes with companies guiding your organization and how they're supposed to be used.

Well, that's also what I've seen is the number one cause of failure of implementations is because you don't. A lot of times companies don't budget for the total cost of ownership. yeah, the software may be like, let's say $50,000 a year, but you're gonna need to implement it properly and that will require some professional services. And then beyond that as well, it's gonna have its life of its own basically. You gotta have people that are actively managing it, enhancing it. Every software company comes out with new features, new releases. You have to stay ahead of the curve if you want to really be adopting that software. Ryan Pollyniak (06:50.06) Yeah, absolutely. Really well said. And that point that you just made about ongoing costs and evolving software and things changing, it's now relevant in today's day and age more than ever, because it used to be that you would go implement a software application on premise 10, 15 years ago, even seven, eight years ago with some of big players. And you'd stay on that version of software and you might... You might update it with some security patches, but the general application was staying the same until you underwent your big upgrade years later and it was costly and disruptive and everything else. Anyone who's ever been through a big business system upgrade knows that today is different.

Yeah.

Yeah, and then today is absolutely different because, I mean, look at how AI is transforming every business application that is out there. And obviously Microsoft is at the leading edge of it, through their investment in Open.AI and the... copilot and everything else that is happening. So I would be interested to like, know, obviously my next question would be like, you know, AI, I mean, it's a big disruptor. I think it's going to help unlock, you know, more efficiency and possibilities for everyone that is using any level of technology. What are you guys seeing, you know, in your customer base?

Yeah. So it's, it's, it's what am I seeing to answer that question? It's, you know, we want to embrace AI. Okay. What do you want to use it for? Well, we're not quite sure, but we need it now, you know? So, and that's normal. I mean, it's bleeding edge stuff, you know, Taryn, you're in the industry every day and it's, it's, it's constantly evolving and it's very much tied to what I was mentioning a moment ago, which the, landscape has changed. applications update several times a year in the cloud now and you need a long-term plan for that. Most of those updates right now on the Microsoft side are around AI, co-pilot enhancements and how to leverage this stuff, right? so what I'm hearing from my customer base is we want to use AI. What I, what I'm telling our, our, our clients, our prospective clients is number one, you have to have your data ready for it, right? You can use chat GPT, you can use Bing for tactically creating a marketing campaign or doing some research or writing an email. But if you really want to get insights out of your business data, you have to have it aggregated and organized. You can't have this in this old on-prem system that you don't want to get rid of. And this is in your new cloud CRM and half your data is in Excel and part of it's in a notebook from your sales rep. You can't leverage AI when your data is like that, right?

Yeah, and I think that I always say, we have lot of conversations around this. The number one challenge companies will face in implementing AI is going to be organizing the data. bigger the companies, the bigger the data set, the messier the data set. And like you said, probably sitting in multiple places and not really gonna stage together, not talking to each other. And then any AI models that you run on top of that data, it's like in the old days, used to say, garbage in garbage out. So I think it will be very, very true for AI as well. That how well is your data structured? How well it is organized? and then having AI on top of it could do wonders.

Absolutely. Yeah. And this is especially true for organizations that grow through acquisition and you're acquiring companies, right? They have their own data sources and it's disruptive and it's costly to bring them all into your ERP sometimes, which is always what people think. We've got to get everything together, especially with all the private equity out there right now where, you know, these PE firms are gobbling up companies or even a company that's not owned by a PE firm who is growing through acquisition, there's a massive cost to trying to aggregate everyone into the same ERP, CRM, right? They're independently operating and they've got their own processes and everything else. Sometimes just getting the data aggregated into a unified model solves a lot of the problems that, you know, where a full system, you know, aggregation is ideal. There are... a lot of benefits to just getting your data into a warehouse, creating a model and driving your reporting from that one source of truth.

No? Yeah, you're absolutely right. so what is the big advice that you're giving your customers today? I'm sure you're getting like, you like you said, and the first thing they're asking is, you know, we want to implement AI, but we don't know where to start. So what do you think is a good starting point for companies that are thinking about AI lead transformation?

Yeah, so goes back to getting to the cloud, your on-prem systems typically are not going to have the technical connectivity, but also getting your data state in order. And when it comes back to the system changes, more and more, the longer I'm in this business, it's become crystal clear to me that that change element in connecting your people to your new technology and getting them to leverage it and to input the data that you need. The old adage garbage in garbage out that you mentioned is still true. You know, you've got to, you've got to have data in inputs and organization there if you're going to do any of this. So start with the foundation, right? And, focus on the long-term plan. It's not always feature-based. I saw this demo and that demo and this one checked nine boxes and this one checked eight. There's a technology layer to the, to that foundational plan that you have. What. software application is going to support that, right? The big players will typically do that where you may get a demo from a small organization who's built a product just for your industry and the features you say, well, that's the exact feature we need. That's only part of the, of the story. So if you're an executive, say, you know, don't, don't let user opinions of feature led demos, just drive all of your decisions. That is a typical pitfall where you as a leader need to be driving your vision and maybe shortlisting, well, here are the applications we're going to look at. Yes, we're going to do some demonstrations. No, it's not purely going to be a scored checkbox demo for which one does the, you know, which one solves more of our feature functional requests right now. That will be part of it, but you as a leader in your organization have to have more vision than

Yeah, and what's the long-term vision and what are you trying to achieve? And really not like, I would like to start seeing this report next month, but then beyond that report, what's the objective, what's the goal, and how this new technology is gonna help you solve that problem. And not just solve it in the current state, but also grow with time and be able to solve future problems as well. Ryan Pollyniak (14:17.71) Yeah, I see a lot of organizations making technology decisions in silos still because marketing has a budget and sales has a budget and operations has a budget. That has to be driven from a more cohesive level from the top.

Absolutely, the customer experience and the customer journey has to be thought through. It has to be both from the journey that a customer has, but more importantly in parallel how that journey translates into systems and processes that you follow internally as a company so that you have that cohesive. process and backed by a cohesive data set as well.

Yeah. And it takes patience, right? It can't be that marketing needs a tool tomorrow and sales needs a tool in six months and we're going to let everybody go do this. There has to be a plan, right? In our neighborhood HOA, we did a huge landscape plan 15 years ago and we've been implementing it in chunks ever since. But everything there is going to work together in the end. And if you go and you extol some bushes over here and some flowers over there and some trees over there with blinders on, you're never going to have a cohesive plan. So that analogy to me should paint the picture that you have to consider everything and then implement in chunks. And it does require patience and starting in the proper place.

Absolutely. Well, thank you, Ryan, for these wonderful insights. I'm sure our listeners would have learned a thing or two from a conversation today. anybody who needs help with digital transformation, Microsoft, Ryan and his team are an excellent source. You can find a link to his bio next to the posted podcast. Well, thank you so much for being on the show, Ryan, and look forward to our future interactions,

My pleasure, Taryn. Thanks for having me on.

Thanks.