What Most Companies Miss About Digital Transformations

Digital transformations – they often start so well, promising impressive results that are set to transform your business.   

Then, as they roll out, they start to run up budgets, go over time, and ultimately leave employees disengaged, exhausted, and sceptical of future efforts. This scenario plays out in companies across industries and geographies - so what's missing?  

The seeds of success or failure are planted in those initial planning stages. This is where most companies fatally compromise their efforts by failing to fully map out legacy systems, underestimating the complex integrations required, and underestimate potential pitfalls.  

The first thing any organisation must do is recognise that digital transformations are multifaceted efforts that require just as much time and budget focused on people/processes as the technology itself.  

The root causes of failure  

The biggest factor is that companies aren’t able to specify their requirements upfront. Inevitably, complications will arise – digital transformations are inherently more complicated and volatile than other projects. This then creates poor definition around what needs to be done, and the expected gains are most likely overegged to make sure the business can get internal sign-off. Then monetary gains are predicted without real analysis and are often positioned over-optimistically.   

This lack of clarity will quickly snowball, and communication is key. Without this, vendors are brought into the discussion and there will be some that are keen to just sell their services and products without fully understanding the unique objectives of the company. Those sorts of businesses won’t necessarily point out any flaws or issues, but rather just smooth things over and suggest any problems can be worked out later. Then, this creates a feedback loop, with everyone exaggerating the benefits, leading to a disconnect between expectations and reality.   

The sad thing is that failure is seen as standard now – we rarely hear of a project delivered on time or on budget.   

Take stock of what you have  

Businesses often neglect to look at what they have already in place, whether that be current software or hardware. Underestimating the complexity of what they have and perhaps are even being too keen to just throw away their current hardware, the focus is solely on building the system and getting it over the line. Often there isn’t a consideration as to who will operate the new systems going forward. This becomes even more problematic if there aren’t skills in the market to bring in people who know how to operate the technology. Wiley Edge’s annual tech report recently revealed that almost half (45%) of businesses offering tech roles claim candidates applying for entry-level positions lack the core technical skills, even if the candidate holds the relevant degree.   

Some businesses may assume that now they have a new system, the staff that operated the previous one, are no longer required as there is no role for them – then you’ve lost a wealth of knowledge which will hit you hard down the line.    

Retaining and cross-training is invaluable.  

With an end date as the finish line that businesses are desperate to hit, essential things become squeezed and deprioritised. With executives under pressure to show returns, and show them quickly, they follow "pipeline logic" that values linear progression through predefined milestones.  

Digital transformation projects don’t work in that way. The complexity of organisational layers between both tech and culture means that rigidity falls short and can set you up to fail. In larger projects, there are a lot of politics. What gets surfaced to whom and when, is often unclear. The danger with this is that things then get reported as on target and running according to schedule when in reality it is likely to be nowhere near ready to go live on the set date.     

When major digital transformation efforts flounder after significant investments of time and capital, it can lead to cynicism and affect the whole team. Employees who gave it their all to try and make the project successful feel exhausted and disillusioned. In the worst-case scenario, it can also lead to higher attrition rates: IDC recently found that in 50% of companies, these failures lead to higher attrition rates.  

Choosing the right vendor and consultancy is key – one that will help the business unpick the objectives, the current set-up and help guide you to where the responsibility lies within the new system. Ultimately, you should make sure the consultancy you choose is the right one, one that is able to integrate with your team and understand the existing environment.  

Ultimately, it's all about your managing costs and being able to adapt if and when issues arise. This is achievable through keeping employees engaged through clear communication, setting realistic expectations, and providing support and training throughout and after the process. Organisations must realise the potential that they have already in their business and work with consultancies to train those employees internally. Through careful selection and filtering of the right people, projects can be carefully controlled and remain sustainable.