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Why digital transformation projects fail

digital transformation
(Image credit: Image Credit: Konica Minolta Business Solutions UK )

A successful business needs a complete team of people who collaborate and work for its customers and an outstanding user experience is critical to implementing a digital transformation strategy. The success of the business is pivotal on the user adoption of this technology, which means that companies whose technology frameworks are designed around the user and engaging users via multi-channel strategies, will be the most profitable. Global spending on digital transformation technology is predicted to reach $6.8 trillion by 2023 (IDC) and Forbes claim that 84 percent of companies fail at digital transformation. Tim Barber, Managing Director at AzteQ, reveals some of the most likely reasons for failure and his advice to transformation directors looking to make technology investment in rushing to keep up with the competition, and to boost their profitability. 

How to define digital transformation 

For any business which is shifting its business priorities, and remodeling for 2021 working and trading practices, digital transformation is top of the agenda. Digital transformation can be defined as any route that leads orders or product out of the door utilizing a digital means rather than people, but essentially, it only means what it means for your business.

By this, I mean digital transformation isn’t always a big bang, unless you are a start-up looking for an end-to-end digital strategy across the entire business. It can be one or more projects for instance: from process redefinition and automation, moving to remote or hybrid working, adopting new technologies or digital services, designing a new website, e-commerce Platform or improving customer experience through digital channels. More of the time it is about making marginal gains, small improvements which generate a synergy of process across the business. For instance, you could be putting records into an Excel spreadsheet, but you may want your leads to come in straight off your social and into the CRM system to be delivered to the relevant part of the business.

For most IT directors or CIOs, the starting point is looking for an enabler, a key technology partner. Perhaps you might contract a business analyst or management consultant to initially map out, from a process perspective, what in the business needs changing but you will need a solid technology partner who can investigate, design and deploy the technology for you. Some of the key ingredients to a successful transformational plan include having a solid business case, and you need to see an ROI or know how it will be measured. But many businesses don’t have clear goals, which is where it often goes wrong. Embracing emerging technology might be a top priority for organizations but putting it into action is fraught with problems. 

Key reasons for failure 

Lack of user engagement, combined with often poor technology service delivery and PCs running on out-of-date and unsecured software all contribute to poor technology performance. This, on an amplified scale, puts huge pressure on the business. The decision-makers are sometimes too close to it to realize the situation, and then follows a brief to add in new technology which is what the business believes is digital transformation, when actually the existing system is not optimized, with inherent security, compliance and governance issues; the result is a catastrophe.

Decisions must involve all the areas of the business that this technology will impact, not just be made at a departmental level. The head of finance might love his finance package, but if it doesn’t work remotely, it’s antiquated and doesn’t scale, then it isn’t working for the business. Reverse engineering is costly to shoehorn this into the data center and it doesn’t service today’s needs. Equally, we see CRM deployments where no process has been mapped out, users are not engaged and have had minimal training, therefore it has been sitting there for years with no one using it; this is a complete waste of money for an SME.

The main reasons for failure are that the technology is not closely aligned to the users’ needs, therefore technology adoption is poor, and that managers disagree or have unclear business goals. The company culture could be resistant to new technology. Unclear objectives, lack of employee buy-in, and lack of built-in SLAs are other key reasons for project failure.

Most companies are technology-led rather than people-led. Some businesses say they want or need SharePoint purely because they know another business using SharePoint, or in the case of the Computers for Schools vouchers, schools were ordering laptops in droves and then only wondering afterwards who or what they were for, what actual training or support might be required, with out-of-hours support breaking their budgets. Too often, consultants come into a business making broad-brush assumptions about what that company needs, and ordering technology only as it’s up for renewal or out of date, with no real assessment of where in the business it’s being used or by whom. And too rarely, are leaders taking a reality check to verify needs before they deploy, and asking will this technology achieve what we want in the organization?

Here are some ideas then, to formulate your successful digital transformation project:

Go for goals

Finding the right partnership is critical to working out your goals. You need an enabler, someone outside the business, who is more objective and can review and translate the needs of the users/customers.

How change is managed is vitally important, and identifying leaders and sponsors is vital to instigating change throughout the business and communicating these goals.  Ensure goals are shared, and they are specific, clear and measurable to achieve impactful outcomes. And ensure the right people are involved. If you’re putting in a CRM system, there is no point getting input from the sales director if you’re not getting it from sales support who are struggling with their app or appointment booking system. It boils down to leadership of the business. Technology is a cost center but if invested in in the right way, it can be a revenue center. Invest and it will support you. If you don’t, it will always be a cost center.

Identify all relevant entities

Engagement is the operative word here. We call it the discovery phase, where you identify your key stakeholders in the business, at all levels, who are impacted by the project. Your technology partner should provide an unbiased view of the business, overview of the current technology your products, your suppliers and supply chain, your distribution channels; all the resources that touch your business. Be open about key challenges, current needs, opportunities, and future aspirations. and IT service landscape including what support is available to users.

Check users are compatible with your technology

Consider all technology users in your organization by gaining appropriate persona-based information on them. Through analyzing role requirements, and factors such as age and experience level across software and apps, you can capture information on the gaps in user understanding, support, and training requirements, which are costing the business in lack of productivity. Technology does not operate itself – your biggest cost in the business is likely your staff, and so knowing that they are ‘compatible’ with the technology you provide for them is paramount to success. If you base your investment decisions on pre-assessed requirements of technology users, your technology partner should be able to make the right technology investment for the business, aligning this to your business goals in the specific context of your industry. Get this right, and you will improve users’ engagement, performance, wellbeing, and much more. 

The link between UX and CX is undeniable. If your users can use it, they will; cue a huge uptick in adoption. That’s what makes brands preferred, such as DPD’s hourly delivery timescales and user-friendly interface, Boohoo, Ocado, to name a few who are doing this brilliantly. If you keep people happy in the business to use the technology then externally, the user experience and engagement will lead to profit. The users are almost more important than the technology itself.

Meticulously audit technology assets

At this point, you need to accept nothing less than a complete technical review of your technology landscape. This needs to comprise a sophisticated cybersecurity vulnerability review and a cloud services strategy review. Current needs must be factored in, as well as considering future technology needs. Hardware and software, security and data management are all critical areas to analyze. Security risks are critical to avoid, meaning checks to secure the system should be built-in, or the plan isn’t worth the paper it’s written on. 

My hot tip here is to pick your software houses very carefully because vendor lock-in can leave you high and dry. For example, Microsoft Dynamics can be tailored and customized so you’re not stuck with proprietary assets you can’t do anything with.

Establish governance, provenance and cleanliness

Being ethical, legal and honest has never been so important in business as it is today. This means considering governance and compliance, an area often overlooked in quick-fix strategies to add digital technologies. User awareness levels on data protection and the known risks must be assessed by data protection officers on compliance requirements, including GDPR. Both current and future requirements concerning compliance status should be factored in, to future-proof the technology plan.

Conclusion 

The most successful digital transformation projects will be goal orientated and outcome-driven, then it is also easier to measure success. You will need SLAs to track technology performance and support for the users. Measurables can be on a consensus basis, or they can be a metric of anything, it could be a survey score or improvement of morale or productivity but having checks in place will keep the project on track. ‘Bolt-on’ is not synonymous with digital transformation. Understanding and making technology relevant to your users is the machine that powers the process. 

Finding that technology partnership to share the decisions made in the project is key to success, and always ensure decisions are joint, as imbalance may encourage issues. Digital transformation follows trends in trading behavior, so try to stay aware of industry activity and futureproof your strategy as far as possible. And when you’ve done it once, further changes in business practices may need to follow to keep your business competitive. But as long as brand is king, customer experience will be queen, and look directly to your users to make your brand the chosen one.

Tim Barber, CEO, AzteQ

Tim Barber is CEO, AzteQ