7 Digital Transformation Pitfalls and How to Fix Them

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Thursday, June 11, 2020

The majority of digital transformation projects fail to deliver results. Here's how to ensure yours isn't one of them.

Article 5 Minutes

Digital transformation is a top priority for a growing number of firms. Indeed, according to International Data Corporation, these initiatives will be responsible for over half of IT spending (53%) by 2023 as firms seek to embrace new ways of doing business, boost efficiency and develop a better understanding of their customers.

Yet many of these projects don't deliver the results business and IT leaders expect. In fact, it's estimated that between 60% and 80% of digital transformation initiatives fail. But why is this?

Here are seven pitfalls to be aware of to make your digital transformation a success.

1. Failing to plan

Moving ahead before you've got a clear plan in place for what you hope to achieve, how you intend to get there and how you measure results is one of the biggest root causes of failure, as it means projects progress without a clear direction or purpose.

To avoid this, build a clear business case for the transformation that includes not only how you’ll handle it, but also the why. This means setting out clear goals and a roadmap for how you’ll track progress towards them.

2. Not devoting enough resources

A digital transformation will always be a major project, and so it must be treated accordingly by the highest levels of the company. This means ensuring that the team has all the resources it needs to meet its objectives.

This starts with budget. Underfunded projects will quickly run into problems with delays and lead to cut corners that affect the performance of the final solution. While it’s of course essential to stop costs spiraling out of control, a hard cap can be just as damaging. If your team can make a solid case why they need extra investment in either funds or personnel, don't simply say no on principle.

3. Moving too quickly

If your team is rushing to meet demanding or even unrealistic deadlines, it's inevitable the quality of the final product will suffer, so be realistic when setting out timeframes.

Meanwhile, pushing out digital services too widely too soon can also have serious consequences. If flaws or errors in the solution aren’t discovered until everyone in the company is expecting to use a system, it can be hugely costly to fix the problem, while rolling back to previous solutions may be unfeasible.

Therefore, small-scale trials and tests, with frequent feedback assessments, are essential in spotting issues before they can affect the entire business.

4. Moving too slowly

On the other hand, however, there’s such a thing as too much caution. If you're proceeding at a snail's pace, using old fashioned methods such as the waterfall approach where each stage must be checked and signed off before the project can move forward, you could also be setting yourself up for failure.

Digitally-focused firms need to be agile and responsive to emerging developments, move too slowly and your final system will already be obsolete by the time it's ready for production. Solve this issue by emphasizing the use of agile development methodologies like DevOps to streamline processes, gain quicker feedback, and enable quick changes of direction in response to shifting needs.

5. Not having clear leadership

Strong leadership for a digital transformation can have several benefits, and firms that lack this will find it much harder to get results, both in the development phase of the project and when it comes to getting employee buy-in once complete.

Within the development team itself, effective project managers that can motivate employees and identify where an individual's skills will be best-used are a must. But beyond that, it's important for C-level executives to also take an active role. This can not only help oil the wheels and get things moving, but it gives workers throughout the business confidence that the new system will be fully supported.

6. Fixing things that aren't broken

It can be tempting when committing to a large-scale digital transformation project to undergo a complete overhaul of your firm's systems and processes, but this may not always be the best solution and can make activities less efficient.

You shouldn’t opt for digital just for the sake of it. A full audit of your existing processes should help identify where things are actually working effectively and where major changes could cause more disruption.

A digital transformation project doesn't have to mean reinventing the wheel - sometimes incremental updates can be enough, and knowing where this is appropriate and where more wholesale changes are required can prevent you from making a costly mistake.

7. Not taking into account the company culture

The role company culture plays in the success of a digital transformation project can’t be overlooked. If the organization still clings to old ways of doing things, it may be that a widespread change of culture is required to promote the use of digital tools, break down silos and develop a more comprehensive view of the customer.

This covers a wide range of initiatives, from ensuring employees are enthusiastic about the project and understand what the benefits will be to reassessing how the firm approaches risk.

"Technology is definitely a part of digital transformation, but unless leaders can 'win hearts and minds' throughout the process, efforts can stall or be less successful than they could be." - Carey Oven, partner at Deloitte Risk and Financial Advisory,  Deloitte & Touche LLP
 

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