The pandemic has only underscored the need to accelerate digital transformation work. Avoid five common pitfalls as you do so
When digital transformation stalls: 8 questions to ask
Don’t be intimidated by the much-debated failure rate of digital transformation: You may just be stalled. Ask these questions to determine the fix
We’ve all heard the talk about digital transformation failure. Despite companies’ efforts to transform, most are doomed to failure, this line of conversation goes. The number 70 percent is thrown around often.
In reality, things are not so black and white. As Melissa Swift, senior client partner for digital solutions at Korn Ferry, recently wrote, “The chestnut about ‘70 percent of transformations fail’ has been nicely debunked“ – this well-researched HBR article puts the proportion of completely failed transformations closer to one-tenth.
According to the data, some degree of success is achieved in about a third of transformations – leaving 50-60 percent in a gray area between glory and doom. Rather than fail, it’s much more common for digital transformation efforts to stall, or to fall somewhere short of the lofty goals business leaders had in mind at the onset of their plan.
Frustrated business leaders may see such a stall as a reason to quit and go back to square one. But before you think about throwing in the towel, take a moment to regroup and refocus.
IT leaders experienced with digital transformation suggest taking a closer look at key areas like culture, talent, metrics, and customer impact to determine if small tweaks could have a big impact on progress.
[ Culture change is the hardest part of digital transformation. Get the digital transformation eBook: Teaching an elephant to dance. ]
Read on for eight questions to ask about your digital transformation. The answers can help you revive a digital transformation that is stalled, stuck, or heading in the wrong direction.
1. Are we confusing digitization with digital transformation?
“Digital transformation is a poorly understood term. Just like innovation. People often conflate the terms digitization, digitalization, and digital transformation. These are very distinct terms, ranging from moving a paper-based process to an online process or automation, to the way we have restructured our social life around media and digital communication. Digitization, automation, and digitalization can be undertaken as individual or even siloed projects. Digital transformation, on the other hand, requires that we deal with change across the whole enterprise as the enterprise becomes customer-driven end to end. Digital transformation is not about technology.
“At the end of the day, if you do not know where you are going and what success looks like, the chance of failure will be great. It is like someone saying, ‘I don’t know what I want, but once I see it, I will know whether I want it.’ I would suggest a way to have a successful digital transformation is by breaking a complex problem into parts, understanding the current pain points and the business requirements – current and future state, and mapping the customer journey. We should always lead with the customer journey and not with technology.” – Simona Rollinson, CTO of ISACA
[ Read also: Digital vs. digitized: Why CIOs must help companies do both. ]
2. How will this effort impact our customers?
“To be successful, digital transformation efforts need to start and end with the customer. Choosing to focus on modernizing technology and improving operations results in a win for the company but rarely result in significant improvement in overall customer experience quickly enough to justify the efforts and potential upheaval involved.
“As a result, these projects tend to underperform or outright fail simply because the benefits of making internal operations more efficient take longer to reach the customer – and increase the chances of customers getting drawn away by competitors who are more customer-experienced focused. When IT leaders choose a customer-centric approach to digital transformation, C-suite leaders and stakeholders are more likely to support the project, and critically, are likely to see positive overall impacts far sooner.” – Geoff Webb, VP of strategy at PROS
3. Is our vision unified, meaningful, and actionable?
“There are two main reasons why digital transformations stall or fail: Failure to communicate a clear vision across the organization, and resistance to adopting a new culture. When leaders think about digital transformations, they often focus on the technological side of the transformation, the software updates and the introduction of new technologies; however, there is more to a successful transformation than that. Digital transformation marks a fundamental shift in how employees work and how an organization delivers value. It’s the technical issues that are easier to address, and instead, the organizational shortcomings that become inhibitors to success.
“When I’ve come across these organizational issues with my transformation, I found it extremely helpful to address them by simply re-establishing a common understanding and clear vision – not only at the working-team level but with key C-level executives as well. If the leaders driving the transformation each have a different view of how it should be accomplished and the goals they wish to achieve, they are failing to provide a meaningful vision that is easy to understand and actionable for employees. While this will greatly influence how new ways of working are adopted by an organization, it is also important for leaders to provide constant support to ensure that the organization stays focused on common goals.” – Sanjay Malhotra, CTO of Clearbridge Mobile
[ Read also: Digital transformation: Are you using outdated IT metrics? ]
4. Are our success metrics motivating for the employees driving digital transformation?
“Often, IT teams are pressured to undertake digital transformation efforts in the quickest and most cost-effective way, but this doesn’t lead much room for creative problem-solving, which in turn doesn’t promote growth for the company or collaboration among team members. Creative employees who can take a larger business problem and present a technical solution, or who can come up with 'what-if' scenarios to develop new solutions, can help teams become more collaborative and goal-oriented.
“Success in IT is often measured by governance, compliance, and ticket velocity – but those metrics don’t motivate people. IT leaders should choose people who can see the bigger picture and work with a sense of purpose. For example, if someone’s goal is to manage and improve the employee experience through technology, there is room to do meaningful work for the team and the business. Digital transformation will be successful when your workforce aligns to the changes taking place, has the flexibility and creativity to drive those changes, and is prepared to adopt them.” – Tim Christensen, CTO of SocialChorus