While enterprise executives have been thinking about digital transformation for years, the past 12 months have seen massive acceleration. There is now broad consensus that digital innovation is necessary for survival.
But success is far from guaranteed. Past data shows that a majority of companies struggle to make these initiatives a success: A 2019 Everest Group survey reports that 78 percent of enterprises failed to meet the business objectives of their digital transformation.
Some of the most common challenges include a lack of buy-in throughout the organization, poor communication, and a flawed long-term roadmap for innovation. More recently, enterprises have been plagued by flawed strategies such as pilot projects, limited rollouts, and other barriers to growth.
Time for a reality check. Let’s look at some best practices that can help your organization maximize the potential of your digital transformation.
[ Are your digital transformation metrics up to date? Read also: 10 digital transformation metrics to measure success in 2021. ]
1. Step out of silos
Enterprises too often view their transformation projects as proofs of concept, deploying enabling technologies in silos without thinking of how they will need to interact and integrate with other business areas. Instinctively, business leaders err on the side of caution when implementing new solutions, seeking to maximize control over results.
However, this siloed approach serves as a foregone conclusion: Without a comprehensive, high-level strategy clarifying how the new technology will impact the entire enterprise, executives limit the potential for success from the outset.
Leader tip: Before launching a new project, convene a meeting of key stakeholders across every division or unit that will be involved. Use this conversation to both identify previously unseen challenges and develop buy-in throughout the organization.
2. Resist the temptation of the pilot project
Some IT leaders hedge their bets by using an even more conservative strategy than the siloed deployment, implementing new technologies in a pilot project to avoid investing the larger sum required for a full, committed roll-out. They may consider this technique an intermediate step on the path to digital transformation, allowing the enterprise to stop and assess its progress before committing to a more significant deployment.
But today’s leading-edge technologies require a no-compromises, organization-wide deployment to make a full impact. Instead of pursuing incremental change, be brave and move confidently toward transformation to avoid being left behind.
Leader tip: Challenge managers to identify technologies that would deliver transformative benefits beyond their own team. Invite team leaders to pitch their findings to the broader organization.
[ Get exercises and approaches that make disparate teams stronger. Read the digital transformation ebook: Transformation Takes Practice. ]
3. Embrace change management
One of the most common digital transformation pitfalls is failing to gain buy-in throughout the enterprise, a common symptom of poor communication between the executives plotting the strategy and the employees responsible for implementing it. According to IFS’s 2020 report, Digital Transformation Investment in 2020 and Beyond, more than a quarter of global companies acknowledge that people are often overlooked when planning and executive transformation projects.
Innovation will always involve an element of risk, but forward-thinking enterprises can improve their odds by taking a proactive approach to change management. The key is the use of an executive sponsor – a well-connected company leader who can manage stakeholders and oversee the initiative. The endorsement and clear vision of the executive sponsor will foster enthusiasm and buy-in, while the sponsor’s engagement with those responsible for implementing the transformation will ensure that feedback is being used to shape the initiative’s long-term growth.
Leader tip: Work with executive sponsors to develop a feedback mechanism that will make it easy and stress-free for employees to voice their ideas and concerns about the new initiative.
Digital transformation's next phase
While the past 18 months have been volatile, one thing is for certain: The way enterprises operate has changed forever. This unprecedented acceleration in digital transformation may be a once-in-a-lifetime event in terms of scope, but it has set us on a course that will only see a steady increase in the use of enabling technologies.
As the pressure to implement newer and more expansive digital initiatives increases, organizations must learn from past mistakes, emulate established best practices, and move decisively to ensure that they are equipped to embrace transformation to its full potential.
[ Culture change is the hardest part of digital transformation. Get the digital transformation eBook: Teaching an elephant to dance. ]