Why digital transformation fails
A 2013 report by McKinsey showed that 70% of transformation programs fail. We’ve all seen our fair share of high profile disasters — the BBC digital transformation, the NHS National Programme for IT and the Co-Op Bank’s failed core banking systems replacement are all prominent examples.
Working with many clients across different vertical markets, there are a few common themes I’ve seen. These can basically be boiled down to:
technology is an enabler, not the solution
failure to maintain and scale
I see the first one constantly, and it’s a personal bug-bear. Technology is not a solution. Repeat after me, 3 times. Engrave it on your mind in letters of fire. Make it your screensaver.
Technology is a commodity. In and of itself it does not give you any competitive advantage, or deliver any business benefit. Buying a new, cutting edge tech does not magically give your business an edge in the market — those days are far behind us now.
As an enabler, though — that’s where technology belongs. Use technology to drive transformation, to enable change, to solve actual business problems. Someone who champions a transformation program that boils down to “Buy Product A” is out to polish their CV, not solve business problems.
Failure to maintain the transformation is where I see most digital transformation programs come apart. A client I worked with had executive sponsorship, with the immediate IT team energised and keen to engage. The transformation program addressed perceived issues from the IT department, and delivered a radically different way to quickly deliver new projects. After the launch of the program internally in the IT department, and some initial successes, they scaled it out to other business units.
With a resounding lack of success.
The change agents were leading things, and not the people who would ultimately benefit. There was a lack of engagement within the wider business, as this was seen as an IT-led project that was focussed on technology. With a lack of engagement from key business units, the program falters — it’s unable to deliver quick wins within the business and so starts to be seen as not delivering.
Failure to scale often kicks in once the immediate, burning issues have been solved by the transformation. People are working in different ways, the KPIs all look good, the worst of the issues have been addressed.
The underlying problem has been solved, right? Quick! Fight another fire!
The executive sponsors lose interest (they have more pressing issues to deal with now). Areas of the business who weren’t in the first tranche of adopters and won’t see the biggest benefits drag their heels, slow down implementation (we’re busy, we don’t have budget).
Any digital transformation has to involve both IT and business teams working together, and has to communicate value in terms of business benefits, not technology goals.
We’ve got a lot of frameworks and processes for managing all of this, but still seem to drop the ball on big projects — and it seems to boil down to not addressing the right fundamental issues at the start.
When I work with clients on digital transformation projects, I aim to focus on some key areas, to build on their success and accelerate their progress:
Are you actually solving a real business problem?
It’s too easy for technologists to get enamoured with technology for it’s own sake. Is a week’s delay to get a server setup really a burning issue? Or is it the 3 weeks of change management that has to take place first? Ensure you’ve identified the real root cause of business issues and not the symptoms.
Clearly understood benefits
Think of the classic “elevator pitch”. If you can’t explain in 15 seconds what the benefits of digital transformation are, why should anyone else be investing in the program?
Strong executive sponsorship
If you can’t get the C-level team on-board, then are you really explaining, measuring and delivering business value? This should be the litmus test for any transformation work: if you can’t get a senior exec excited, why would anyone else be?
Quick wins
If you can’t quickly deliver value — and demonstrate this! — then no matter how revolutionary your program is, no-one else will be invested. Ensure that business areas with the most to gain are early adopters, and ensure that they — not the change agents within the project team — are the ones spreading the word about the benefits.