Highway to the digital transformation danger zone

Blog article | By Andrew Barlow, December 21, 2018

“I feel the need… the need for speed.”

Famous words from the dynamic duo Maverick and Goose, it would seem that many businesses feel the same when it comes to their digital technology investment.

Businesses continue to invest in digital technologies faster than ever before, in an attempt to truly streamline their processes, increase their reach, and remain competitive in today’s unforgiving market.

 

‘The cloud technology market is set to grow from $67B in 2015 to $162B by 2020 attaining a compound annual growth rate of 19%.’

Forbes

 

It’s not just the speed of investment in digital technologies that is eye-watering, it’s also the desire to implement technologies quicker. Systems Integrators are under huge pressure to demonstrate that they are equipped to roll out the technology at a rapid rate. Businesses want to cut long, drawn-out 12-month implementation cycles down to 3 months. It seems like a distant memory when service providers had the luxury of time to plan and execute a software implementation adequately.

The biggest question we need to ask ourselves is if implementation speeds continue to increase, can businesses adopt change at the same rate? The change caused by digital transformation is often underestimated and, in some cases, not even considered. Perhaps this is the reason why Forbes is publishing statistics like;

 

75% of Digital Transformation (DX) projects fail to deliver their intended ROI.’

Gartner

 

I’ve had industry experts and practitioners join my podcast to talk about ‘Post-Go-Live operational adoption. We found that businesses are now actively investing in optimization Post-Go-Live to increase their user adoption and ultimately the value from their investment. So, is this the result of ‘our need for speed’ or do other factors contribute to this?

Let’s take a look.

Flight School

This year marks a decade since what many refer to as the birth of the enterprise cloud technology market. In 2008, businesses  realized that the cloud was just as secure as a server room.

These early implementations created the blueprint and key learnings for future digital transformation investments. What’s interesting is that this is also the time where business processes were truly tested. In many cases, businesses were not prepared to roll out cloud solutions. Most business processes were previously harmonized to on-premise deployments and were not fit for cloud implementations.

Inevitably many businesses made mistakes and learned a lot from their early cloud deployments. I find it fascinating that the heat is on to implement technology faster than ever before, yet many organizations have not yet successfully transitioned to the cloud.

You’ve lost that loving feeling

Interestingly in 2011, we started to see many acrimonious breakups between client and vendor. Many businesses pulled out their cloud technologies and replaced them with a competitive product. This is no coincidence, it’s exactly three years after the massive influx of implementations in 2008 and more importantly when the vendor contracts were due for renewal.

However, why was this the case? Did the implementation not go well? Was the software not delivering its expected value? Or was the technology just not adopted?

 

‘Businesses are spending $4 on operational excellence for every $1 spent on the consumer experience.’

Forrester

 

I’m sure that there are a number of reasons why digital transformation projects failed at that time, but, let’s look at the trends.

It wasn’t just a handful of businesses replacing their original technology with a competitor, the vast majority of organizations made this change. I think that the vendors probably oversold the ease of implementation. As a result, organizations weren’t prepared or equipped with the necessary tools and experience to successfully implement SaaS products.

Ensuring that the business was ready for their transformation sat purely at the feet of the change and learning teams. Given that, in many cases, their processes and tools were better suited for on-premise deployments. Was this the reason for an influx of failed projects?  Not on its own, we also saw a lack of investment in change and training during the budgeting process.

 

‘Traditionally only 1% of a project budget is allocated to change management. To truly achieve digital transformation adoption this should be more like 7%.’ 

Nico Orie, Vice President HR Strategy and Operations, Coca-cola

 

Great balls of fire

The next five years saw even more organizations embarking on digital transformation projects. New investments in CRM, HCM, ERP and Procurement technologies all contributed to the global spend and project failure figures.

In the past, how a business connected with its workforce lacked creativity and has been largely ineffective. In many regards, this is a limitation of the tools that the project leads have at their disposal.

People are becoming immune to email and don’t get me started on company intranets. If I’m ever in a situation where I need to hide something, I will put it on the company intranet, no one ever goes there.

However, these have been the tools of choice or necessity in the past.

The emergence of social tools did represent an opportunity to connect with users in new ways. But, these new tools are largely ungoverned, so it’s difficult to efficiently police content and keep it accurately in line with system changes. Clarity, consistency, and alignment are all desired words when looking to implement standardized processes and technologies across their business.

Unfortunately, social tools are not the answer.

Take my breath away

People make businesses tick, and people adopt change and technology. When we say “we are digitally transforming our business” what we mean is we are arming our people with digital technologies that will enable them to reap the benefits from the investment. Many businesses focus on technology, but I think they should have a people first strategy.

With this in mind, what can we do to help people embrace digital transformation? The technology is out there, and businesses are asking for it. But, businesses struggle to build project teams capable of delivering key decisions quickly and achieving success.

Businesses are no longer spending multi-millions transforming their businesses, they are spending billions. This, in turn, is increasing the pressure on internal support functions and even external service partners that are attempting to support the transformation.

I’m working with an organization at the moment who’s aim is to become a truly digital business. That includes procuring many different best of breed technologies, while also supporting changes in culture, strategy, behaviors, processes, skills and of course software. Businesses are failing to invest enough in change management and in turn, are directly impacting the value from their investments. The previously mentioned business is struggling to make their investments work for them. Not because of the technology they have chosen but, because they cannot facilitate and manage it.

There are solutions in the market that can help tackle and sustain adoption challenges related to digital transformation projects. However, without embarking on a broader adoption strategy, digital transformation could cause you to crash and burn.

The question remains, is the desire to digitally transform your business at such speed a good idea or just a highway to the Danger Zone?

 

For more insight into enabling a successful digital transformation, click below.

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