Transformation projects are risky. There is no guarantee that you will be able to predict the future and get the organisation to make the necessary, fundamental changes. While this true, there are a number of important steps that you can take in order to improve the odds. Based on our extensive experience, we have identified the top 5 preventable causes of transformation project failure.
- Focusing on only one aspect of transformation, typically technology, without realising that the digital age demands new business models and relationships and skills.
This is one of the biggest sources of failure. Technology does not exist in a vacuum, nor is it the solution for disruptions that the digital age is creating. Organisations pay millions for new technology, but do not change their business processes or models and then discover that the technology does not deliver the expected ROI.
- Applying traditional change methodologies to digital transformation programmes without realising that they assume a known end-state, which does not yet exist in the digital age.
The digital age is just starting to emerge. We are still trying to make out what it will look like. In such an environment, there is very little certainty about what markets, customers, goods or services an organisation will be providing in 3-5 years, let alone in 10. Traditional change methodologies can lead to organisations ‘baking in’ assumptions and models that seem valid today, but prove irrelevant even before the project is complete.
- Trying to impose a top-down solution without realising that many of the solutions have already been developed and work at a day-to-day level. Therefore, what is needed is integration, not wholesale change.
In the past, IT projects were structured by the fact that the technology was large, centralised and required a huge investment of time, resources and money to implement. Digital technologies are the opposite, fast, easy-to-develop and cheap. As a result, most organisations have pockets of innovation that have emerged in response to a specific issue or opportunity. Typically, transformational IT projects impose enterprise solutions, with all the risks and associated costs instead of developing light-weight tools and standards that allow existing solutions to interact in a virtual enterprise solution.
- Starting transformation projects without a clear digital transformation strategy that provides a manageable, measurable and flexible framework for identifying, delivering, assessing and bedding-in the various components of a digital transformation project.
In an environment where disruption and change seems to be the new normal, there is a perception that strategy is, at best useless. Projects are started based on the latest trend or in reaction to some opportunity or threat. In an environment such as we are in now, strategy is more important than ever. Without it, obvious risks are not addressed the implications of what is being done are not taken into consideration.
And the number one reason is…
- Having the wrong objective for a transformation project in the current environment.
If we had to sum up the reasons why transformation projects fail, it is that they do not have an understanding of what is currently happening; therefore, they do no set the right business objectives. If we are in the midst of a new emerging economy, we have to realise that conditions are in flux and will remain so for the foreseeable future. As a result, what transformation projects should be focusing on is making organisations: