Regardless of industry, digital transformation projects are a top priority today. According to IDC, global digital transformation spending will grow to an estimated $3.4 trillion by 2026. Digital transformations are necessary, but they’re also painful. And they fail at a rate of about 70%, according to McKinsey.
There’s no single reason for digital transformation failure, but in my experience, companies often stumble out of the gate and carry unnecessary challenges throughout the project. Here are some actionable insights that will ensure you set the right tone at the onset of a digital transformation project and drastically increase the likelihood of success.
Uncertainty associated with change invites friction and fear, even when the payoff is significant. We are creatures of habit and prone to embrace familiarity over the unknown. And to be sure, digital transformation introduces a lot of unknowns — especially early on. Let’s look at three common digital transformation challenges and how organizations can address them to increase the likelihood of long-term success.
This is the most important factor. Early in my career as a technologist, I co-led a digital transformation project for a traditional market with manual operations: school bus outsourcing. The technology would be overhauled to create unprecedented efficiency and accuracy in scheduling, dispatch, payroll, bus maintenance and safety. I was on a mission to implement it into processes as quickly as possible.
However, I had a wise mentor point out to me that I wasn’t taking people into account and how this change would disrupt their day-to-day lives. Relying on technology was a foreign concept to many end-users, and without getting their buy-in, the project would fail. This guidance highlighted the importance of a people-centric change management plan in any digital transformation undertaking.
You start by creating a change management team to address the fears and concerns of those whose jobs are being digitized. One group within the team should be responsible for crafting and delivering messaging that offers a clear line of sight to the benefits without masking or sugarcoating the change they will have to go through — for both the company and the employees. This message must be delivered by a leader well respected by the business operations ranks to establish credibility. That messaging should also outline what steps are necessary to achieve success and guide employees before and during acclimation.
The team should also include people responsible for delivering the technology assets needed for the transformation. Typically, this part of the team reports to the CIO or CTO, and along with immense technical acumen, these professionals should also come equipped with patience and empathy. For many employees, a digital transformation represents a highly disruptive and intrusive process. Employees should feel empowered to ask for help and feel supported without judgment as they navigate this journey.
The combined team should also target opportunities for early wins. Start with a more tech-embracing group or where implementation will be more straightforward. Promote these organizational implementations as an example of how the transformation will yield benefits. A well-orchestrated organizational change management plan should include but not be limited to:
In addition to a change management team, organizations should also establish a digital transformation office. This group, composed of business, finance and technology professionals, is responsible for creating the infrastructure necessary to ensure a successful transformation. This team will be responsible for establishing a standard, agreed-upon set of metrics that will serve as a North Star for achieving all the key milestones within the digital transformation project management timeline:
Data consistency is critical for any project, but the stakes are significantly higher for digital transformation project management because of the myriad components: funding, budget, schedules and milestones, resource availability, project status and health, progress, etc. It is critical to have real-time updates in a single planning system, especially when you can have project interdependencies that drive the delivery of a program.
Keeping track of it all in a single system ensures consistency and allows for accurate projections. This is why organizations undergoing a digital transformation must operate with a single source of truth for their data. Everyone involved must have access to a centralized platform where they can input their team’s updates and see the progress of other teams. Such a platform should offer the ability to get a bird’s eye view of status updates or, if necessary, drill down into details.
Digital transformation projects aren’t easy, but they don’t have to be impossible. By getting employee buy-in, identifying the right tools and processes and implementing a single source of truth, companies drastically improve their chances of success and enjoy sustained ROI sooner.
Learn more about successful digital transformation project management by watching this Sopheon webinar. Find out how Sopheon’s Acclaim Projects can provide assurance and informed decision-making throughout your project lifecycle.