Is Digital Transformation Really That Hard? No Wonder You Don’t Want to Do It
I have to chuckle, as digital transformation is once again trying to get on executives’ desks, front and center, any desks as long as they belong to those with clout. As an aside, analysts put forward ideas of things we must do, but they don’t necessarily do these things themselves. Preachers not doers? A few years ago, when digital transformation was all the rage with analysts, it just didn’t catch on, now it’s back again.
If you would like to read a good article about some of the gotchas of digital transformation, check out ‘Digital Transformation: 4 Mistakes that Ruin ROI’. You will get a birds-eye view of some of the challenges that make digital transformation more formidable and harder to achieve than you even imagined. OK, enough. Let’s return to our blog.
So what does the author of the article, Peter Bendor-Samuel, have to say? What I liked, and what seems like good advice, is to segregate the projects that will bring value to your organization. What is the approach? That value generally takes one of two paths:
- Projects that apply digital technologies to reduce costs, increase speed, or increase quality within an organization’s current operating model. What I call short-term wins.
- Programs that leverage digital technologies to change an organization’s operating model to improve the customer, employee, or partner experience and thus change the company’s competitive positioning. What I call long-term wins.
The second approach is the gotcha for failure. According to Mr. Bendor-Samuel, “The second path can be a complex, multi-year journey of extensive, painful organizational change and unexpected challenges. Unfortunately, many enterprises’ digital transformation initiatives fail or, at best, underdeliver the promised value.”
What reasons did he give?
- A short-term mindset. Even though we are a technology company, I do think the following is spot on. “Technologies alone create no value. They enable a company to change how it operates; but if the only thing that changes is the technology, the company won’t achieve substantial benefits. Executives must alter their mindset to approach digital transformation as a journey. This is fundamental to success. Unlike transformation initiatives of the past, digital transformation is not an event that happens – rather, it’s a journey of change that will occur over three to five years or even longer.” Are you beginning to get the big picture?
- Following the wrong plan. “Another mistake is developing a detailed plan and a one- or two-year roadmap for the digital transformation journey at the outset. Historically, this approach has worked for transformation projects that aimed to achieve incremental value.” These should go into bucket one. “But in a multiyear digital journey that changes the operating model, it is impossible to use this type of plan successfully because the details of the journey are not knowable at the beginning.” These go in bucket two.
- Using the wrong metrics. This is a biggie. “The third mistake many companies make is measuring their performance using typical metrics. Instead, companies need to design metrics that measure their progress during the digital journey. Metrics in a typical change initiative focus on project completion on time and on/under budget. Digital transformation metrics need to (a) monitor the progress toward the outcome and (b) measure the magnitude of impact on the business.”
- Inadequate change management. “Many companies do not understand that digital transformation means the outcome is data-driven rather than process-driven. As companies leverage digital technologies, they collapse their business processes into data.” Valid point. “Change management methods must manage how people use data and make decisions that arise from issues discovered in the data – issues that existed in previous business processes. Change management must focus on changing the culture to rethink processes and policies while not blaming people involved in business processes where data identifies issues.” The inability to adjust your thinking leads to underdelivering the promised value.
Mr. Bendor-Samuel aptly explains why most digital workplace initiatives fail. Despite the chatter by analysts, I do wonder how many of you are involved in a digital workplace project. How’s it going? We have a digital workplace white paper that may help you sort out the process.