Why do 70% of digital transformation projects fail?
A report published by the Harvard Business Review last year, ‘Digital transformation is not about technology’, found that 70% of digital transformation projects fail to achieve their goals.
Why? It’s not, says the report, about the technologies themselves. It’s about people: the organisational culture.
“Most digital technologies provide possibilities for efficiency gains and customer intimacy. But if people lack the right mindset to change and the current organizational practices are flawed, DT will simply magnify those flaws.”
So, as CIOs, how do you ensure your digital transformation project is a success? How do you get people on board with your project or change your organisational culture?
Delivering a “cloud culture”:
how to change organisational mindset
What do we mean by a “cloud culture”? As IT professionals, we are already familiar with the ethos on which the cloud was built: collaboration; sharing; integration. These are the foundations for successful digital transformation projects.
But where – as IT professionals – we might see the transformational potential of the cloud, its effectiveness to deliver positive change might be thwarted if there is an organisational culture of silos working, internal competition, protectionism and secrecy – or simply a lack of digital skills.
How can you change an organisational mindset to promote collaborative working, cloud thinking and the importance of digital capabilities across the organisation?
1. Understand your business goals
Too often, we see business leaders talking about their desire for digital or cloud transformation in terms of particular solutions that they already have their heart set on. Often, tech-savvy leaders have been sold the idea that a particular software package will revolutionise their business.
But these “solutions” aren’t always the perfect match for their needs. Either they are costly and over deliver against what the business actually needs, or they may meet the business needs for today, but not in ten year’s time. Be clear about what your goals are. Then set measurable objectives for the project, for example cutting production lead times or using customer and sales data to improve stock management or reduce returns. Having a clear understanding of business goals and SMART objectives is essential before you choose a solution.
2. Strong IT leadership
In order to deliver culture change and buy-in for a new approach across an organisation, there must be strong leadership at the helm of the IT department.
The most important set of skills that a CIO can have are not technical, they are the more “people focused” skills of emotional intelligence, the ability to listen and react, inspire and motivate, to positively influence people and unite them around a clear vision. For multi-site or global businesses, this may involve unifying different internal cultures, developing effective new communication channels and processes, and rolling out new induction and training programmes.
3. Collaboration, innovation and learning
With the right person leading, the next step is to create structures, processes and project teams that focus on collaboration, innovation and learning. Develop an innovation culture where people are motivated and have space to meet, collaborate and try new things out, and are given the time to do so.
The cloud transition process can be positioned as one that focuses on “learning” rather than “success vs failure”. Creating flat hierarchical structures and clearly devolved decision making protocols can rapidly speed up project delivery times.
4. Start with the customer experience
Placing customers at the heart of what you do will ensure that new technology solutions have real business impact. Use customers insights from your existing data, plus additional research and focus groups to inform your thinking right from the project outset through to beta testing and rollout.
5. Manage security and the perception of risk
Digital transformation risk was the number one concern for CEOs and senior executives in 2019, according to the HBR report.
Some of these concerns will be evidence-based and valid. Other fears might be influenced by a traditional culture, low digital knowledge or competence and fear of change. Both must be addressed in order to move forward.
(Read our recent blog ‘7 reasons you shouldn’t move to the cloud‘ for more on this.)
Moving to the cloud does come with some inherent risks, which need to be mitigated. While the cloud brings many benefits that attract business leaders – increased productivity and connectivity, decreased operational and infrastructure costs, for example – the proliferation of cloud technologies also makes the challenge of finding the right solution even harder.
Managing cloud sprawl and keeping on top of security when there are multiple integrations at play, can take up vast amounts of the IT team’s time. IT infrastructure can become like a “spaghetti junction” or “spider’s web” of data, and this leaves organisations at risk of data loss and hacking.
As the IT lead in your organisation, it’s your job to understand all these issues and come up with the right solutions to deliver projects and mitigate risks. OR work with an IT infrastructure expert who can guide you through the minefield and constantly stay on top of new developments, so you don’t have to.
If these are issues you’re grappling with at the moment, we’d love to talk to you and see if we can help.
More information on these topics:
- 5 cloud computing trends to look out for in 2020
- 4 biggest challenges for IT managers today
- Why CIOs need to build cloud culture to drive digital transformation (TechBeacon)
- How cloud computing is revolutionising the retail industry
If you want to challenge us on how we could help you deliver a digital transformation project, create a new IT infrastructure or security system that meets your needs within your budget (or you just want an add-on backup service) then we’d love to speak with you.
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