The keys to success in digital transformation

Digital transformations are expectedly on the rise, with AI and hybrid cloud environments sweeping through the tech industry in the quest for collaboration, productivity and employee experience. But as more and more organisations embark on their digital transformation journeys, gaps in their strategies and over ambitious goals can often lead to these transformations failing. 

A recent study by McKinsey & Co showed that 80% of organisations failed to generate even three quarters of the revenue gains or cost savings they anticipated with their digital transformations. Another report from IDC revealed that 88% of business leaders they surveyed believed that only up to half of their digital transformation projects met the goals set out.

Digital transformation failure often comes down to businesses under-estimating the complexity of the project and budget available, and over-estimating the results. Organisations looking to undergo even the smallest transformations should carry out the right due diligence and begin to consider them not just as digital, but also business transformations. Making any kind of changes to critical systems within an organisation requires changing business operations, which in turn requires a change in the businesses culture and mindset. 

Organisations should focus on three key areas to ensure they’re setting their digital transformations up for success.

Ambitions need to start small

Before any system is built, organisations must do an analysis of where exactly the transformation is needed. Knowing where to start is often the hardest part, so identifying one area of the business where the transformation would be of real benefit is the first step to ensuring its success. Those going through digital transformations without a clear plan run the risk of getting stuck in an unstoppable chain reaction of changes, where a transformation in one area requires transformation in another to function properly, and so on. This is strenuous on time and resources, and often leads to the whole project falling apart. 

As the saying from Desmond Tutu goes, “there is only one way to eat an elephant: a bite at a time”. Even the smallest digital transformations are elephants. Taking them one step at a time ensures the project stays on track to generate the expected return on investment. Implementing fast and on a small scale, just one or two features at a time, allows businesses to gauge how the transformation is being received across the organisation, and gives them the opportunity to address any issues early on.  

Transform culture in addition to technology

Digital transformations are inherently complex. To ensure success, organisations must comprehensively assess employees’ readiness for change. This goes beyond just technology – it encompasses a cultural and organisational shift. Many organisations underestimate the scope of transformation, focusing solely on the technological aspects. This inevitably leads to failure when they neglect the crucial cultural and organisational changes needed for successful integration.

Beyond this, understanding the desired scale of transformation is vital. Organisations must take deliberate steps to fully integrate the changes into their culture. Assessing the workforce's skill levels in relation to the new features is an excellent starting point. This allows for targeted training and ensures the technology is used effectively from the outset. However, a truly successful transformation goes beyond skills training. It requires building a culture that embraces change. By embedding transformation into the organisation's DNA from the very beginning, a strong foundation is laid for future developments. This ensures the organisation is continuously prepared for the next phase of its digital evolution.

Keep a small and close-knit team

Project efficiency is key for a successful digital transformation. To achieve this, assembling a small, dedicated team with key stakeholders is crucial. Getting too many players involved can lead to a never-ending loop of revisions, stalling progress and draining resources.

Stakeholder mapping can be a powerful tool for building a high-performing team. This method helps identify the right individuals who are truly invested in the project's success. This core group will be responsible for critical decisions throughout the entire lifecycle, from planning and strategy to deployment and future development. By investing time in selecting the right people upfront, organisations can minimise "noise" and ensure the project stays on a clear trajectory.

There’s a world of opportunity when it comes to digital transformations, especially in the age of AI. But it is crucial that organisations don’t get caught up in the glitz of new technologies without considering all the necessary steps to properly implement it. Having a strong understanding of need, scale, and areas where change will be necessary is bound to set any transformation up for success from the start.