Companies are changing the way they do business in order to stay alive. In the coming year nothing is constant nor predictable. Companies are adopting digital solutions to stay relevant, to manage their business, and to stay in contact with customers.
What has your company done?
Adopting digital processes is the way most companies now update their business. BUT so many have failed in their updates costing businesses time, money, and energy when the changes implemented don’t achieve what they were set out to do.
You’ve probably heard about failed digital transformations. They have maybe even made you stop and reconsider your own company’s ambitions. Overshadowed by worries and uncertainties, it is not uncommon for businesses to refuse to commit to a structural and technological change, even if the considered and desired changes will improve the company’s work.
In this article, we will review the 8 most common reasons that cause digital transformations to fail, which will help you avoid them and set yourself up for success.
Leadership
Successful digital transformations depend on company’s leaders and complete leadership buy-in. The people who oversee the company and have comprehensive coordination across all departments, bridge communication between the Board and the employees. While it is not impossible to achieve a successful transformation without someone in a leadership role, it tends to be more difficult. If led by middle-level employees or an executive manager, the progress, acceptance, and implementation will have less commitment and support by employees.
A Shared Purpose
A clear and common goal about the transformation effort must be broadly communicated to the entire team in order to secure their buy-in and support. Often, ‘digital transformation’ has a different meaning to individuals. Without clarifying what it means to your company and addressing which problems will be solved, your employees may assume their role incorrectly or assume they are being replaced. Transformation is a long and involved process and oftentimes companies do not have systems in place for effective internal communication. This then leads to difficulties in tracking progress and a breakdown in cooperation… which leads us to the next reason for failure: inadequate progress tracking.
Inadequate Progress Tracking
Record and track the work progress. Digital transformation could not be done overnight as it usually lasts for a year or two. This ‘project’ has lots of areas that require focus and attention, across different departments and it’s easy to experience disconnection, sense of fatigue, feeling lost along the way. Putting an operational system in place will allow for a single source of truth and prevent duplications. While you might not have a seamless information sharing system cross department at the moment, it doesn’t have to be a fancy software. It may be easy as using a shared Drive to move away from paper files, siloed Excel sheets or Word documents that allows no real-time updates and collaboration.
Getting Your Employees to Commit and Upskill
Digital transformation does not only fall onto the IT department’s responsibilities.
Many often feel insecure when it comes to technological or technical issues, leaving the whole matter to the “smart computer people”. A transformation can only succeed with engagement from departments beyond IT – Finance, HR, and really, any department that uses a ‘process’ within the company. Similarly to having a shared purpose, you will need to communicate to your employees, about the need to change and the importance of their commitment.
Knowing the purpose of undergoing a transformation isn’t enough as cooperating and adopting the change. Some of your employees might be worried that artificial intelligence will take over their jobs, some might find it difficult to step out of their comfort zone and break away from their routine. Some might even find change unnecessary. It’s important that you address these concerns even if your employees didn’t voice them out.
You will also need to provide your employees training, to help them learn the new skills they need to operate a machine, to run a software, to get used to a new business process. As the talent supply is much lower than the demand, waiting to hire the ‘right’ employee will cost you too much time. For example, rather than hiring an in-house digital transformation team, it’s sometimes easier to take matters into your own hands and outsource consultants who could get you and your employees to where you want in a couple of years.
Digital Transformation for the sake of Digital Transformation
This is one of the common pitfalls, blinded by the ‘not losing out’ mentality to get fast, short-term results. It often leads to the implementation of several projects at a go, which lowers the success rate because transformation needs to be carried out step-by-step, one phase at a time.
Sometimes, people can be too invested in software or tools instead of focusing on the people. While the software and tools are great help to reforming your organisation for the better, it’s important to remember that your employees and customers are your greatest asset. The software and tools should revolve around them, not the other way around. Every transformation needs to start with a ‘why’, and that leads us to the next pitfall – overlooking customer experience.
Overlooking Customer Experience
Needless to say, your business, and every business as a matter of fact, stays alive with the support from customers. Your digital transformation should impact your customers in a positive and delightful manner, or it simply didn’t achieve what it was meant to do.
While cost optimisation, replacing humans with automation on mundane, routine jobs can be your goals, the core should be improving customer experience. A seamless, smooth and an easy process of interaction in a proactive way will leave customers an unforgettable and satisfied impression of your business. In other words, you will need to be ever-ready in providing what your customers require, whenever they make a request, through the channel of their preference. Even better, you could present your customers with a solution or need even before they reach out to you.
As the bar of what customers expect is getting higher and higher, it is important to be able to keep up. For example, personalisation might be categorised as an ‘exceptional’ customer service yesterday, but today, customers might dismiss it as a ‘default’. Dive deep in search of what your customers truly want before deciding on which software or tools could compliment and improve your business process is one good method to keep your transformation on the right track from the wrong strategies. Remember, it’s not about the shiny new toys, it’s about making your customers happy.
A good change will lead to new markets, increased customer loyalty and fast growth, ultimately bringing in a high ROI. Digital transformation starts, and ends, with your customers.
Taking it Too Slow, Unwilling to Let Go
Hopefully, you’re not one of those who are still hesitating to explore what digital transformation could do for their businesses as it’s becoming less of an option but more of a need. While some may dismiss it as a ‘trend’, others may feel too overwhelmed by the amount of work they will have to put up with for a couple of years, from people to processes to technologies.
Now although new technologies can be attractive, it is also important to note that not all old technologies need to be replaced. An old technology could also mean a piece of software from several years ago which is already extremely effective. Hence, it always depends on which could perform better in the long-term in a cost-effective manner. Most of the time, however, companies are relying heavily on inflexible and unscalable technologies that were put in place decades ago, making it extremely difficult to modify, optimize or integrate with newer and essential technologies as a small change could break down the entire system. Overwhelmed just by the thought of shifting away from old, heavy systems have already caused mental drainage and headaches, making this one of the reasons why decision makers are unwilling to replace old technologies with new ones that could compliment their process even better.
Unable to Cope when Consultants Leave
Many transformations are not led by an in-house team but by external consultants. A selected team of employees are put in place to collaborate closely with the group of external consultants throughout the projects. However, this would mean that the consultants will leave after the transformation is completed and it will be up to the team of employees to ensure that change doesn’t walk out of the door together. This is tied back to the sense of urgency, the shared purpose and the commitment that your employees must hold onto in order to get comfortable with the new change, without the supervision of external consultants.
While undergoing digital transformation, you will need to ensure it is business as usual for you instead of putting your bread and butter business on halt. Most digital transformation projects are designed to help you enhance your core business, instead of chucking them aside to focus on an entirely new venture that has no relations to the main business.
What’s Next?
Digital transformation is not a trend that will fade anytime soon. More and more businesses are coming under its influence and soon enough, the traditional way of doing business in a manual mode and offline sphere will no longer be an available option. It’s not ideal to shun away because of the handful of digital transformation horror stories you hear. There are also many successful ones that should inspire you to bring your business to a higher level of success.