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The 5 Biggest Mistakes in Digital Transformation

Posted by Templeton on Friday, 01 October 2021

Whilst most organisations are now seeing the benefits of digital transformation, IT and non-tech leaders are not necessarily equipped with the knowledge and resources that effective, efficient digitisation requires. Although in 2021 70% of businesses have created a strategy and action plan for digital transformation, a miniscule 7% have actually implemented their plans.

Worst Digital Transformation Mistakes

Templeton’s tech recruitment specialists reveal the top five most common mistakes made by leaders who are digitising, and how the best CTOs and CIOs are helping get their teams on track for transformation success.

5 Most Common Mistakes Made by Leaders When Digitising a Business

  1. Not Creating and Sticking to a Real Digital Strategy

Only 30% of digital transformations are successful. This might sound shocking – but the multitude of reasons behind a high failure rate are solvable, given the right approach at the very beginning.

One of the biggest mistakes of any project, large or small, is ineffective planning. Introducing new systems, platforms, processes and entire ways of working across an international organisation has the potential to completely fall apart at the first hurdle. The best Chief Technical Officers start from the ground up, with outputs and outcomes first, and deliver a holistic strategy that answers the following questions:

  • Why are you digitising your organisation?
  • What do you want to achieve? (Using this to inform SMART goals)
  • Which systems do we need to keep, which do we want to improve and which will we replace? (Take an audit of all software and tools)
  • Which internal departments, suppliers and stakeholders will be affected, and which must be involved at which stage of the transformation?
  • How will the new technology and processes be adopted and communicated?
  • How will your organisation test and measure the effectiveness of your actions – and how will you know if you’ve achieved your targets?

One simple Gantt chart won’t suffice. Digital leaders must consider not only the wants and needs of the business and its customers, but also budgets, timescales and stakeholder expectations. Budgets will require a buffer for every stage, to ensure project continuity throughout issues and challenges.

Reduce the likelihood of mistakes by planning out and walking through each stage, utilise scenario planning to prepare contingency measures, and stay ahead of any potential setbacks. Ensure a smooth transformation by clearly defining success and mapping out everything you need to get there. 

  1. Not Consulting Customers

 Recent studies show that 44% of digitisation strategies created value for their organisation but did not meet their targets, instead delivering only limited long-term change. One of the simplest mistakes made by management teams in implementing new digital technology is ignoring customer feedback – or even worse, not speaking directly with customers at all.

The Covid-19 pandemic highlighted how quickly and how significantly customer needs can alter and expand. The most successful products and services are created with the customer at the heart of the process, and the same is true for business transformation. New technology may initially wow your audience, but in the end, customers just want their problems to be solved, and they want the easiest, smoothest platform – not the edgiest or the most aesthetically appealing. Customers who are involved in the transformation strategy from the very beginning can tell you exactly what they want and need from any piece of tech or process that you plan to introduce, and what you can avoid wasting time and money on.

Best Digital Strategy

Avoid negative UX by:

  • Mapping the customer journey and how each new tool or process will affect user experience at every stage across every channel, from website browsing to apps to e-commerce purchases
  • Utilising the data you already have – what pitfalls have customers complained about previously, and how did they respond to past updates?
  • Conducting user testing with real customers if possible – and at least an audience that accurately represents your customer persona – to iron out any UX issues before full launch
  • Regularly and proactively asking for customer feedback upon the launch of any new tech platforms and product improvements, to maintain agility and flexibility for the constant improvement cycle that keeps customer satisfaction high.
  1. Keeping the Wrong Legacy Systems or Implementing the Wrong Tech Stack

One of the most common mistakes of any project, but particularly damaging when digitising an organisation, clinging onto the wrong legacy systems can negate the positive effects of new and newly integrated systems.

The vast number of systems and process required in the transformation process can feel overwhelming, and CIOs can feel tempted to remain either with tech products that they personally like and know well, or products that have so far served the organisation well. However, the ‘if it’s not broken, don’t fix it’ methodology is one of the fastest ways to lose competitive advantage.

Positive and Negative of Digital Transformation

Common tech stack mistakes involved in digital transformation failures include:

  • Building on top of existing systems instead of modernising
  • Neglecting to integrate and incorporate adequately – prioritising the most exciting or aesthetically impressive tech over the need for internal efficiencies and a smooth customer experience
  • Wasting the opportunity to clean up existing systems and ancient data that no longer holds any relevance to the company’s mission and customer base
  • Using a large volume of systems and suppliers, further complicating integrations and processes, and increasing the upskilling required for teams to efficiently use each product.

Successful IT teams have often built out a separate system that can provide excellent customer-facing capabilities, to which apps, databases and new tech can be added without dismantling or damaging the system that underpins the organisation. This system can be the ‘utopia’ of the IT team and other departments, developed to provide the data and analytics needed across the business, able to adapt to customer and organisation needs, and through automation creating efficient, effective and enjoyable ways of working.

  1. Not Involving the Whole Business

Digitisation isn’t restricted to those in digital roles. VP Analyst at Gartner Mark Raskino predicts that, ‘In three to five years, every industry will be digitally remastered.’ From administrative tasks and reporting to communication between managers and teams, from product development and to customer services, there isn’t a department or area of business that digitisation won’t touch.

One of the worst oversights committed by any leader in any business change programme is neglecting staff throughout the organisation. If employees don’t understand what they need to do, why they need to do it and exactly why and how it will benefit them, they won’t do it. Leaders can often introduce excellent training programmes when new tech is launched, but fail to follow up with new starters in the weeks and months ahead, and neglect the need for refresher training to ensure that expensive and innovative technology is continually utilised properly.

Employee involvement from the beginning of the transformation can provide knowledge and experience that even the best IT teams simply won’t be able to draw on. Finance, HR and Compliance professionals can quickly point out how seemingly small changes might significantly affect their own processes, and provide innovative ideas to both ensure take-up from their colleagues and improve the quality of the transformation itself. Take advantage of Sales departments’ unique customer insight and Marketing teams’ unrivalled ability to communicate change to incorporate all organisational needs into the transformation and ensure maximum success internally and externally.

  1. Failure to Adopt Agile Leadership & Governance

From Artificial Intelligence and Augmented Reality to Robotics, Biometrics and IoT, technologies are constantly evolving. Even for organisations that do not rely on emerging tech products, consumers are increasingly expecting faster, more efficient and more enjoyable services and experiences as these technologies evolve, meaning that businesses and IT governance must also continually evolve. Whilst more than 65% of successful digitisation programmes featured effective agile leadership, 90% of unsuccessful transformation projects lacked agile leadership.

Technology Systems Needed for Digitisation

The most effectively planned transformations can often fail due to a rigidity in management. Leaders must strike a careful balance between adhering to project milestones that inform goals and objectives, and regularly stepping back to reassess decisions, priorities and changes based on customer testing feedback and new data. CIOs and CTOs must also engage teams in agile working and effectively communicate strategy changes, the reasons behind them and how they affect project goals. Collaborative working through two or three-week long sprints helps teams remain focused on both immediate priorities and end goals, and delivers regular quick wins to maintain morale and connection to the project despite obstacles and challenges.

Rigidity can often result in a time-oriented rather than quality-oriented approach. If obstacles are encountered and not managed with agile leadership, teams can panic when approaching deadlines, and without clear management can focus on hitting time targets at the cost of the fully functioning processes and well-tested tools required for a successful transformation.

An agile governance approach can be best achieved through a ‘test and learn’ customer strategy. However brilliant a digitisation plan, success will only be guaranteed by frequent and in-depth testing. The most successful IT teams work on a concept and keep testing it with customers, incorporating feedback in new iterations until customers are satisfied and the project’s objectives are met. The most advanced digitisation teams will continuously review their actions and investments against data on all parts of the customer journey, as well as the broader transformation goals. Keeping the customer at the heart of the digitisation from the very beginning, the best digitisation projects are the result of IT departments working hard not just to deliver what customers want but the reasons behind their wants and needs, to proactively anticipate needs in future testing stages, for a truly agile approach.

An agile mindset and communication from CTOs and CIOs set the tone for agile project delivery across departments. Developers, programmers and engineers are empowered to embrace innovative solutions for roadblocks and required changes. Project managers are able to effectively monitor and report on progress against objectives, and agile teams can act quickly on updates.

How to Lead a Successful Digital Transformation

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Topics: Management & Thought Leadership