Digital Transformation is dead? Wait…What? We’ve only just started!
Or perhaps you haven’t started! Don’t worry. You might be one of the myriad of Small or Medium sized enterprises that haven’t yet considered public cloud as an alternative to your on-premise technology suite, never mind considered it as part of a wider digital transformation effort.
Perhaps, like some of your larger brethren, you will soon start the journey along the path of digital transformation. By the end of your effort it will likely be called something different. Those that remember the aspirations of the paperless office remember what might have been digital transformations forbear. Digital transformation comes in many forms depending on your viewpoint – caused by the confusion in the use of the term – and illustrated in the picture.
The term itself is losing its buzz, it’s become part of the everyday vernacular, and like so many manufactured terms before it, its meaning has been contorted, twisted and misunderstood to mean a multitude of many different things, each of which probably deserves its own term. Perhaps you can remember the plethora of definitions for ‘cloud’ before we settled on what it has now become.
What we do know is that historically 70% of complex transformations fail (McKinsey). 84% of digital transformations fail (Forbes) and 75% of IT projects fails to create adequate ROI (Gartner) according to those initiating them .
Better put, and the above make be misquotes from some text. 70% of complex transformations do not achieve their stated goals. But there is no mention of what these goals are, just binary failure [or success], and the potential causes of it. Even if this is not entirely true, and is different from overall satisfaction with transformation, there is enough truth to make a good baseline from it
Who are you…and why are doing that?
Whilst this is a useful picture to show the scope of transformation within an organisation there are a couple of dimensions that are not shown
The owner of the initiative;
- 1Enabling technologies the CIO – obvious enough
- 2The COO is responsible for the outline blue trapezoid (maybe a rhombus?) and is predominantly internal facing operational processes
- 3Either the CMO or CTO for the outward looking aspect
- 4The CEO, with the CFO at their right hand should be on the hook for industry facing business model changes
The reason for the change;
Though it is less important in the context of this post, it will be covered in a future post. This is most simply put as Save Money, Grow Money, Make New Money by Roland Dieser in an interview with Rob Llewellyn.
- 1Changing the technology is about saving money and efficiency, mostly about automating the mundane and repeatable, and releasing people to do more valuable work
- 2Corporate execution is about growing money, by improving products and/or experiences, making better decisions both within the business and about how to go to market
- 3Business strategy is about making new money, or making money in different ways. Potentially disrupting the [assumed] norms in your market.
What is failure?
No one over just fails. You must fail to do something – and that something is not to ‘digitally transform’ – that is not the end goal! What is it that the digital transformation expected to achieve? The only example of this above is the mention of ROI.
Goals must be set by the instigating sponsor for the initiative and they must be FAST. Steer away from SMART goals as they are too static in terms of scope and timescale. Discussed in more detail in 'Are SMART goals really useful' . Everyones goals should be transparent and communicated, clearly linked to the strategy of the organisation. Make sure people know what they are going to be doing, how it contributes to the goal, and ideally how it benefits the customers of your business – I haven’t met a developer yet who isn’t turned off by ROI, but doesn’t have a view on how their organisation is viewed in comparison with its competitors.
How long will it take?
We move slower than we think we do. Optimism bias means that we assume that everything done is done perfectly, and will not suffer outages, defects, solutions be used, or administered incorrectly and that work will be well organised. We think, on the whole, it will all go well. The best place to look for affirmation that this is not the case in your peers. Ask people in your own industry how long it took them to undertake similar programmes, and hos much it cost. Do not be tempted to say we can do it better. You might, but take it as a bonus, not a given!
Act FAST and STOP!
Failure rates as high as 70% can also be caused by rigid goals and timescales. Goals should be adaptive as markets evolve over the multi-year timescales. A realistic goal in a short timescale is not achievable and will lead to sandbagging, and transformation goals not being ambitious enough. Conversely does a goal that would be achieved in the next quarter after a [arbitrary] time boundary has passed, really mean failure?
One way to reduce the amount of time that initiatives take is to not guarantee them a huge pool of money up front. Transformation funding might be ring-fenced, but shouldn’t mean that each constituent initiative will be funded until it completes. The F in FAST facilitates this. Part of the frequent discussion should be;
If any of the answers indicate that there is risk, then take appropriate action. And that might mean canning the initiative and moving on. At the risk of mixing my metaphors; stop throwing money at dead horses.
If you want help in defining the purpose of your transformation. Determining, measuring and communicating your goals, or perhaps rooting out the dead wood in your IT portfolio. Contact UnlokQ for a discussion.