THREE MISCONCEPTIONS HAMPERING DIGITAL TRANSFORMATION PROJECTS
The high failure rate of digital transformation projects has not deterred businesses from getting on with the race to cross the digital divide. However, digitisation has often been confused for digital transformation that most people do not realise the true meaning and complexity of digital transformation. Although, there is no consensus with regards to why digital transformation projects fail, I have looked at the three most common misconceptions about digital transformation projects which often leads to failure.
#1. Digital transformation is a technical exercise
A PWC audit of the 2013 failed £100m BBC digital transformation project highlighted a “serious weakness in project management and reporting, as well as crippling lack of focus on business change”. Most businesses fail to realise that digital rewrites the rule books with regards to business processes and not just to technology alone.
Digital transformation requires culture and strategy alignment with technical changes which is the core for it to provide optimum value. It is not just a swap of legacy for digital systems, but also a swap of the peripherals of the legacy systems on the business such as outdated business models, old strategies and non-automated operations and processes for digitally aligned ones.
To survive in the digital space, businesses need to adapt flexible and agile approaches to people, culture, technology and process suitable for the constantly changing business environment, gone are the days of standard one-size-fits-all methodologies.
#2. Change is change, digital transformation is not different
Many businesses under estimate the amount and enormity of changes digital transformation could bring to their businesses because they often confuse digitisation for digital transformation. Looking to manage change from digital transformation with a management methodology / procedure used for legacy systems is like putting new wines in old jugs.
With the huge advancements in technology and extremely competitive business climate, consumer behaviour is rapidly changing and customers now want instant gratification, as thus it is impossible for businesses to rely on old methods and systems. The traditional methods are not guaranteed to work anymore because the rules of engagement have changed with technology becoming the new basis for competition.
The move towards digital is a shift in paradigm which requires a more agile and customer centric approach (customers include internal users of the digital systems not just the external users of the products / services). An independent report on the failed Co-op transformation project highlighted “destabilising changes to leadership, a lack of appropriate capability, poor co-ordination, underdeveloped plans in continual flux” to mention but a few as the reasons for failure.
#3. After transformation, it is business as usual
The assumption that digital transformation is a timed project and that there would be a revert to normalcy (business as usual) when it is completed often makes businesses fail to plan for post programme implementation. The failure to consider who and why the transformation will have impacts leaves firms unprepared for life when the programme goes live. This often puts people in a reactive mode instead of being proactive from better planning with wider consultations, and in the end, they realise that even though they have new technology, they can neither fully utilise its functions nor deliver on the promises of the transformation programme. Issues such as slow adoption, skills gap and reliance on service provider often creeps up and in some cases eventually lead to abandonment.
Digital transformation should be perceived as a continuous process because change is the new constant. As the norms and business rules are constantly being rewritten, stagnation of any sort will lead to extinction of businesses that fail to move with trend.
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