September 25, 2017
Digital Transformation, strategy, digital transformation pitfalls, IT leadership, digital transformation budget, enabling technologies
Just because a company has a digital transformation strategy doesn’t mean the company will, in fact, transform.
In Nemertes’ latest research project on digital transformation, we interviewed or surveyed business and IT leaders from nearly 800 global organizations. What we learned about why they fail may very well help you succeed.
One key point that should underscore all these pitfalls is the need for speed. Any project should show a measureable, incremental or complete improvement within six months. Otherwise, you risk competitors beating you to the transformation, cost overruns become common, and patience among stakeholders wears thin.
Proactively and deliberately consider all of these pitfalls organizations cited, and make sure you don’t fall into the same traps:
Awareness and Adoption
- Customers simply didn’t respond to a new initiative intended to make their interactions more efficient. The company either didn’t capture requirements or opportunities correctly, or they didn’t market the change effectively.
- Employees and/or customers did not receive any training, or they received poor training on the technology or process change involved with the transformation initiative.
- The business and technology leaders did not anticipate resistance to change, because they did not talk to enough people affected by the change prior to the project. They also did not do enough marketing to quell concerns or build excitement.
- The digital transformation project team did not consider analytics enough, and instead used a one-size-fits-all approach that resulted in information that was not compelling enough for employees or customers to support the initiative.
Process and Planning
- The digital transformation project team did not gather the business unit requirements, so the initiative did not really address a problem or opportunity.
- The deployment was not effective because of a long learning curve that resulted in lost revenue and ultimately a failed project.
- They needed more time to finish product or project; they either did not plan for enough time at the onset of the project, or they did plan for enough time but did not have stringent project management to keep the initiative on schedule
- Some had no plan in place at all, or they did not have project managers to oversee the established plan
- The project lost money or was projected to lose money, and consequently, it ended.
- Neither IT nor business leaders established a budget. Sometimes, the efforts were simply an offshoot of another project; in other cases, they tried to redirect other spending to the project. Ultimately, they failed because they ran out of funding.
- Leaders couldn’t figure out a return on investment (ROI) on the initiative, even though one may have existed. (Obviously, if there is no return on the investment, the project should fail before it gets off the ground.)
- Leaders did, in fact, determine an ROI, but they could not get buy-in that the new process would boost productivity and save money. If the ROI exists and they can validate it, the issue here is not ROI but more about the marketing or presentation of the ROI.
- The initiative lacked leadership—the most important component of any digital transformation project.
- Those implementing the technology that supported the digital initiative lacked crucial knowledge to effectively install, manage, configure, or launch the technology. Without an accurate, timely technology deployment, the project failed (and they always will).
- Employees were not engaged or dedicated to the project because they feared losing their job to the automation the digital project was facilitating. This goes to leadership. If leaders addressed this concern up front, discussed contingency plans or perhaps found new positions for these employees, the attitudes would be very different.
- The project required a specific DT team, or simply more people on project.
- Security concerns were too substantial to overcome. Sometimes, there is no fix to such concerns. But in some cases, new security leaders, involving security early in the process, or more creativity in finding a solution resolves security issues.
- Customers expressed frustration with the advanced technology. For example, projects that involved advanced contact-center channels (video, screen sharing) or virtual personal assistants/bots were too confusing to use or did not provide the information the customer needed.
- C-level executives were not fluent in the specific technology required for the project, but they felt they needed to understand many details. This slowed down the project to the point of failure.
- The apps or enabling technology didn’t work as promised or expected.
Prior to your next digital transformation initiative, walk through this list. Make sure you’ve addressed the pitfalls to help ensure success.
For more information on establishing a solid digital transformation organizational structure, business case, and overall strategy, check out my recent webinar on the topic here: https://nemertes.com/digital-transformation-organizational-guidelines-technology-primer/