As the digital age continues to hurtle along at break-neck speed, more and more organisations are investing in transformation projects to stay ahead of the game. Yet with the need and ambition to digitise comes the danger of risk and failure. Here Howard Dickel, CEO at Step5, talks CEO today through five reasons why digital transformation projects go wrong and how to avoid them.
According to research from the Project Management Institute and Forbes Insights, while nearly 80% of organisations have undergone a significant transformation using disruptive technology, only about 25% of those programmes are delivering tangible benefits against their original intent. We take a look at five significant reasons why so many transformation projects go wrong, or fail to meet their objectives, and consider how your organisation can avoid them:
The ‘What?’ and the ‘Why?’
Sometimes digital transformation seems like the obvious solution, but this doesn’t mean you should dive in head first without knowing what you want to achieve and why. Without a clear objective, projects are destined for failure before they’ve even begun and sometimes businesses are unaware of their mistakes until it is too late, all because of an inappropriate project selection. Before starting your digital transformation, ask yourself this: ‘does the project have clarity of purpose and is it linked to definitive deliverables and dates?’ If the answer is ‘no’, then it could be back to the drawing board.
Too big, too ambitious
So, you have made sure your vision is clear, now you must consider the art of the possible. Far too often the demise of digital transformation lies in the size and scale of the project — the bigger the project, the greater the ambition, the bigger the cost and the slower the progress. Companies frequently run aground by overreaching their capabilities and setting their goals too high, which is why the National Audit Office has called on government departments to eschew visionary projects in favour of more modest ones. To avoid the overambition trap, focus on small incremental steps which allow your project to operate with a level of flexibility which can adapt to the changing landscape as required.
Cumbersome business structure and rigid functionality are the roadblock for the delivery of agile-reliant digital transformation projects. It is all well and good knowing what you should be doing to achieve success for your project, but if the requirements are at odds with the way your business works, you’re not going to get very far. Admitting this is an issue does not come easily as it can require a significant change in processes that will run deep within an organisation. This can be avoided early on in the process by starting from a position which will allow a compatibility between business function and project delivery.
Within an organisation doing nothing is often the “safe option”, which can cause huge amounts of time and opportunity to just slip away. On the face of it no damage has been done but what has been the cost of the lost opportunity? If this resonates when you consider your business situation then it is time to rethink your direction and leadership. One effective approach is to establish a range of clear and achievable milestones which prevent slippage of time and resource and keep things moving as intended.
Single track vision
In contrast to our last point, but with a similar level of disruption, is the “single track vision”. This is when a project is not delivering but you continue on regardless. Stubbornness is a common trait of businesses who are hard pressed for results and it often means turning a blind eye to common problems which plague digital transformation projects such as rising costs and deadline slippage. Of course, a blinkered mindset can lead to deeper issues, such as the inability to adapt when priorities change. The reality is that projects are only really too complicated when they lack the flexibility to realign, repurpose, and change course.
So, what next?
Digital transformation can seem daunting, but that shouldn’t dissuade you. Take a hard look at where you want your business to be and when you want to get there. Strive for a clear vision and define the outcome in simple terms with benchmarks to guide your vision to successful implementation. At a level below this, empower your people to drive the outcomes and manage the delivery with a clear understanding of the risk associated with making the transformation. Clarity and management of the risk drives the confidence in your organisation to do great things.