Digital Transformation Part 1: How To Avoid 3 Pitfalls

Digital Products

Tara Duke is a Consulting Partner in Corporate and Digital Transformation.


Technology is advancing at a neck-breaking speed and organizations are realizing that they need to do several things to stay competitive in today’s world.

• Create personalized, digital experiences for customers.

• Utilize new technologies to both attract and keep talent.

• Provide services in the ways that customers want to receive them.

• Simplify how they do business and control their tech sprawl.

Digital transformation is the process an organization goes through to accomplish these goals. However, if not done correctly, your organization could lose millions of dollars, customers, and talent. You have probably seen reports of a high percentage of failure, but your digital transformation doesn’t have to fail. Let’s look at some of the hurdles that arise and best-practice approaches to overcome them.

Digital Products Digital Transformation Is Business Transformation

The most common mistake companies make from the very beginning is to place all the onus of digital transformation on the technology teams. It is essential that the business leaders join the technical leaders in understanding that while technology may be changing, the processes that need to change and the new ways of working that need to be incorporated require all teams to understand, build and execute together.

Digital Products Why Digital Transformations Fail And How To Avoid 3 Pitfalls

A retailer has determined it is time to update their technology to house their customer and product data in a centralized, more secure way. They also want to update their inventory and distribution technology to create a connected supply chain system.

The definition of the problem and goals often stop there, with the tech teams seeing the benefits of doing this work. Still, they run into trouble when people outside of technology don’t understand what it is trying to solve.

Hurdle 1: No Funding

As many of you may have experienced, funding is the first roadblock on this journey, and many digital transformations never get off the ground or are stopped midway through due to a lack of funding.

1. Align Your Tech Strategy To The Business Strategy

Identify corporate goals that your tech goals enable. In our example, the business doesn’t understand why they should care about centralized data. However, the tech team can tell them that one of the benefits of this new centralized data solution will provide previously unavailable, real-time information to every store and provide visibility to products in other locations, effectively allowing your employees to capture a sale and retain a customer even if the item isn’t in their store.

2. Bring On Another Stakeholder

The operations leader now realizes that real-time information can increase store revenues by 13% and believes she can also save employee time, freeing them up to complete other projects. The operations leader calculates that it would only take about 2% of those profits to kick off these newly prioritized projects, so now they are fully onboard and excited about these changes.

Your case for funding now is much more robust, and you have two different leaders advocating for the same solution with increased benefits that the finance team can now support.

Hurdle 2: Overlooked Key Workstreams

If workstreams aren’t planned for upfront, you risk not having asked for the proper budget, identified the right timeline or requested the resources needed to complete this work. Overruns are the leading reason companies abandon transformation efforts, so it is imperative that you plan properly before you start implementing.

Bringing another stakeholder (or two) on board lessens the chance of missing key workstreams.

1. Technology Implementation Needs

Technology teams usually put together what they believe they will need in advance.

2. People & Training Requirements

Understanding if there are enough people with the right skills in the right places to do what will be needed once the technology is implemented is critical. Choices around upskilling, restructuring and other options will need to be made, and this will extend beyond the technical teams to include retail, supply chain and other teams.

3. Change Management & Success Metrics

With the implementation of new technology comes the need to train people how to use it and, most likely, change processes to eliminate or change the tasks that people do vs. what the technology will now do. Skipping this step creates redundancies and confusion.

In the beginning, metrics that determine whether or not the solution is a success should be defined. This aligns all stakeholders and becomes the north star if in-flight pivots are needed.

Hurdle 3: No Alignment

It’s essential to identify who else should be involved so they can let you know what you might be missing. Skipping this step may leave you with anything from holes preventing you from reaching the goals identified to other leaders with competing projects or even actively working against you because they have different priorities.

1. Executive Sponsorship

The leadership must support both your goals and your plan to achieve those goals. If not, they could defund or deprioritize your program at any time, which leads to a waste of resources.

2. Governance Structure And Communication Plan

Who makes decisions? What is the process if things go sideways? Who needs to know what and when? If reprioritization needs to happen, who ensures everything is cared for? What metrics will we track? What does success look like?

A Transformation Steering Committee should convene and be responsible for keeping the stakeholders aligned and making tough decisions as needed. This group will put together the processes needed to support decision making before you need to make those decisions to ensure the process is holistic and unbiased. Without this, the probability of chaos derailing the project goes up exponentially.

Digital Products Digital Transformation: Where Mavericks Rise To The Top

Embarking on a digital transformation is not for the faint of heart, but the risks can be mitigated with proper planning and governance, setting you apart from your competition.

Stay tuned for part two!

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