Maarten van Montfoort looks at the key barriers to digital transformation.
Today, the drive to digitally transform is being felt in every industry, at every level. Often, the imperative for change comes from business leaders, such as the CEO. Research from analysts IDC found that by the end of 2017, two thirds of CEOs in large organisations will have placed digital transformation at the heart of their corporate strategies. No doubt because the boardroom recognises that digital is the future.
Indeed, IDC goes on to predict that by 2020, the majority of business revenue for 50% of organisations will ‘depend on their ability to create digitally-enhanced products, services, and experiences’.
But while it’s relatively easy for the boardroom to simply move digital transformation up its agenda, actually delivering it is another matter. This burden typically falls to the CIO, who is charged with leading the change. In often already over-burdened IT departments, this is a huge challenge. So, despite this push toward a digital revolution, it is perhaps not surprising that a significant 84% of digital transformation projects fail. Which begs the question, what is going wrong? Why are the majority of digital transformation projects consigned to the failure pile? There are three main factors at work.
1. The perceived complexity of digital transformation is slowing the speed of change
Digital transformation does not have a clear beginning and end-point – it is an ongoing, dynamic process which will change as technology develops. This is a daunting prospect for many. However, with clear guidance and robust planning, it is not insurmountable.
Too often, it is the perception of how difficult a transformation project is going to be that stops it happening in the first place. For example, many organisations start out with the idea that they’d like to move some services and workloads to the cloud.
However, once a business starts to investigate cloud, concerns over data security and sovereignty emerge; worries over how to integrate legacy IT systems are raised; apprehension over not being able to control costs rear their head – and the move to cloud either doesn’t happen or is delayed further.
While it’s true IT infrastructures have become more complex in recent years, this complexity should not hamper change, or be used as an excuse to delay adoption of new technology. In reality, with the right skills and expertise, CIOs can plot an achievable roadmap whatever the level of maturity in the business. To really transform, everything ought to be placed back into the square of possibility.
2. Old fashioned thinking is killing grassroots ideas in the weeds
In many organisations, the greatest barrier to digital transformation is legacy thinking, coupled with a lack of will from already stretched IT departments for radical change. This means businesses often approach digital initiatives from the perspective of the IT department themselves, rather than that of end-users – be they internal employees or external customers. To mitigate this common stumbling blog, a shift in attitude is required.
Firstly, the organisation must understand that better digital capabilities are fundamental to engaging with users – so projects must keep their needs and preferences front of mind. Secondly, this shift must embrace innovation and be less concerned with getting everything ‘right’ first time.
The most successful companies in any sector are the ones that are riding the technology ‘wave’, with the ability to create and launch new products or services in short timeframes. Speed and agility are key – quick testing and quick feedback allow the ideas that don’t work to be discarded, and those with promise to be rapidly rolled out. Ultimately, true digital transformation requires a conscious choice to be creative, be prepared to take a risk, and to water the seeds of grassroots ideas.
3. Digital transformation starts and ends with the business, not IT
Today, technology and IT are an intrinsic part of any organisation. Every business process, is to some extent, now driven by or supported by technology. This means there should be no separation between the organisation and the IT department. Any digital transformation undertaking must therefore begin with the fundamental questions – what are we trying to achieve, what is our strategy, and how does technology enable us to achieve our aims? Too often, organisations pursue transformation projects with no real understanding of these questions. This leads to ill-defined projects that fail to deliver tangible benefits or improvements that make the lives of employees easier, or better serve customers and users.
Organisations must overcome these three barriers in order to increase the success of digital transformation initiatives. They can do this by challenging the legacy mind-set that continues to hold enterprises back, and introducing incremental innovation which delivers tangible results.
Further, by improving the link between the goals of the business and the goals of IT, CIOs can meet broader business objectives and satisfy boardroom demands. In essence, to successfully lead digitisation, organisations must be prepared to take risks – becoming less fixated on the journey of transformation, and focusing instead on the destination.