Four tips for successful digital transformation projects
Digital transformation offers plenty opportunities, with organisations using it to improve their customer services, optimise their internal operations and innovate their way to a sustainable future. However, mounting evidence shows that digital transformations are easier said than done, with between with more than half of all UK projects estimated to fail at realising their desired goals. To help firms develop successful transformation programmes, consultants from Accenture, Gate One and Sia Partners have provided four tips for keeping digital transformation projects on track.
Research from Genpact has previously shown that more than two thirds of digital transformation projects entered into fail to meet expectations. At the same time, a study from Whishworks suggested that 70% of Big Data projects in the UK fail to realise their full potential. Ultimately then, transformation efforts might be treated as a silver bullet, offering firms the chance to reduce expenditure and increase productivity in the long-run, but achieving that is much more difficult than many companies expect.
According to experts from the consulting industry, however, firms can navigate this tricky process to maximise value, if only they would take steps as simple as planning ahead and focusing on low-hanging fruit early on. In a series of interviews with business journalism outlet Raconteur, a number of consultants have spelled out four secrets to success in terms of digital transformations.
1. Establish a business case
A number of consultants who Raconteur spoke to simply suggested many firms were unclear on how they thought technology would help them, or worse, entirely over-emphasised its potential role at the company. Before companies pursue change, organisations need to spend a period validating their thinking around ‘what’ needs to change and not only around ‘how’ they make the change. It can be tempting to innovate for the sake of innovating, while simply thinking new technology will improve performance without having to change the culture of staff. This is often a fatal error.
“Digital transformation that hinges around technology, as opposed to the benefits and outcomes it will achieve for people, talent internally and customers externally, will almost certainly fail,” warned Ben Hart, founding Partner of transformation consultancy Atmosphere. “Fatigue can set in quickly when technology leads and people are expected to ‘get it’ without investment in new people-led skills, attitudes and behaviours for digital success.”
According to Ian Fairclough, Vice President of services, Europe, Middle East and Africa (EMEA), at MuleSoft, this conflation often sees firms simply expect the IT department to carry out digital transformations on its own. In many cases, he argued, this leaves IT with an insurmountable task that leads to burnout. Fairclough added that this disjointed approach “all too often” this left IT staff to “spin up new digital projects from scratch,” while being unaware of their ability to use “digital capabilities that might already exist elsewhere within the business,” ensuring that digital transformation projects take longer than necessary.
But what can firms do to avoid this? According to George Marcotte, Managing Director at Accenture Digital, UK and Ireland, it largely relies on companies bearing in mind what business case transformation actually serves, rather than getting carried away by fear of missing out while rivals pursue digital for digital’s sake.
“There is a big risk that transformation projects can run out of steam,” Marcotte explained. “They’re typically quite long and they’re usually disruptive to ways of working, so it can seem like an uphill battle. However, if you take the right steps at the beginning of the project, you can stop these challenges turning into negativity towards the transformation.”
This was echoed by Irene Molodtsov, Chief Executive of business transformation consultancy Sia Partners UK. Molodtsov stated that “without a clear focus and a dedicated workforce, projects will fail, resulting in transformation lethargy and a consensus among staff who have ‘seen it all before’ that ‘nothing will ever really change’.”
Ultimately, Hart concluded that the first step towards challenging this is simply establishing why firms actually want to digitally transform in the first place. “Establish the why. Reinforce the why. Validate and evolve the why. Communicate it again and again,” he confirmed.
2. Communicate clearly
Even when organisations do have a “why” which is “compelling, clear, believable and motivating” as Hart called it, poor communication can be the undoing of even the strongest convictions, and still lead to digital transformation failures. Firms need to identify key stakeholder groups and how to keep them up-to-date through detailed communications plans – not just the management team but also frontline teams – providing a regular drumbeat with news and updates through channels such as newsletters, town hall meetings, and intranet articles.
“Far too often a transformation project is launched with a fanfare,” Molodtsov of Sia Partners explained. “Then time passes, nothing is heard and the project is forgotten. So when a staff communication is finally sent out, it is not met with the enthusiasm that is required to ensure long-term success… All transformational projects suffer setbacks. This is normal. Tell staff; they will appreciate both the honesty and humility. Otherwise, both rumour and lies will undermine the success of the project.”
“If you don’t have people on board with the change and driving it all levels, then you’re going to get hit with natural resistance points, particularly at the middle-management level,” says David Holliday, Partner at Gate One, a digital and business transformation consultancy. “That can be a big challenge.”
Checking every piece of communication against three simple criteria can help navigate this issue. During a transformation, firms should understand first what the one thing they want their audience to understand from an update is. Then, companies should consider how they want their audience to feel after receiving it. Finally, senders need to be clear with what actions they expect recipients to take upon digesting the information involved. Ideally, effective communication should leave staff feeling able to get behind the company’s strategy, and trusted to do so.
3. Foster collaboration
Effective communication ultimately plays into the idea that a whole organisation will get involved with a transformation, which as discussed earlier is extremely important to succeed. When digital transformations become the preserve of one department or certain teams, it’s almost inevitable that those on the outside will lose interest, resulting in the project taking longer, or ultimately failing.
According to Atmosphere’s Hart, if leaders are looking to foster collaboration, “being heard, involved and having a voice helps to increase engagement,” as well as reduce the fatigue levels of those looking to complete a digital transformation. In other words, communication must be a two-way process, and simply talking at staff won’t cut it either, if the aim is to transform an entire organisation.
In agreement, Mulesfoft’s Fairclough commented that IT teams can avoid becoming the sole force behind a transformation by democratising the process via the connection of an organisation’s digital assets with application programming interfaces, exposing them on an application network, so anyone in the business can easily discover and harness them. In this way, “anyone, not just the IT team,” can participate in the building of new digital products and services “based on existing capabilities.”
Meanwhile, Sia Partners’ Molodtsov remarked that firms should pay close attention to the younger talent they employ. Failing to engage with interns or graduates who have grown up in a world of rapid digital change could overlook a key resource in counterbalancing the lethargy of senior staff who are resistant to changing current ways of working or cynical about the need for digital change.
She added, “In many organisations, the thought leadership, development and fresh thinking on digital, AI and robotics has migrated to this [younger] age group.”
4. Build quick momentum
Large-scale organisations have power, and it can be exciting to get behind them and feel the forward momentum on projects that will shake up the business and the world. Building such momentum can therefore be an incredibly important step toward achieving buy-in from the top to bottom of an organisation.
According to Hart, if digital transformation strategies fail to allow for measurable successes early in the process, they can start to feel “like a long slog towards a moving target that can appear persistently distant.” At the same time, the communications regarding the transformation can become frustrating to engage with, and employee engagement can dwindle as a result. As Hart put it to Raconteur, “if this occurs, for months or even years, people can quickly lose sight of why they are even doing this in the first place.”
Gate One’s Holliday meanwhile argued that many firms fail to address this, thanks to their top-down approach. As many leaders – particularly at board level – foster a misconception that transformation is only defined by its end-point, rather than milestones on the way, they will not prioritise the factoring in of easy wins to help build momentum in the short-term.
Holliday added, “There’s a constant need to evolve, to adapt, to explore new innovations. So it’s not a sprint. It’s not even a marathon. It’s a full-time commitment to a new way of working. And I think that gets right to the heart of the question of fatigue.”
Felix Gerdes, EMEA Director of digital innovation at Insight, pointed to the ancient fable of the tortoise and the hare for inspiration during a digital transformation. He suggested the right blend of pace and momentum is key to success.
Gerdes concluded, “They must pace themselves when it comes to digital transformation, making sure they do not burn out by embarking on too many initiatives at the same time. It makes sense to first focus on a small number of projects that can generate quick wins as this helps to develop highly motivated champions in the organisation.”
