How to make sure your digital transformation project is a success
Business owners are feeling the pressure to adapt in an ever-changing world. The accelerated pace of change required during the global pandemic has highlighted the need for organisations to place digital transformation at the forefront of their strategies. However, putting those plans into action is another story and the difficult truth is that 70% of digital transformation projects fail.
Unsuccessful projects are not reserved for small companies. In fact, some of the most well known brands have been through digital transformation difficulties. Take Ford who, back in 2014, attempted to create a new digital service that sat completely separately from the rest of the company. Perhaps unsurprisingly, the venture failed, and Ford was forced to rethink their plans. It was an expensive exercise, but just goes to show that even the most experienced teams can struggle to get it right.
Digital transformation can be just that - transformative. But, in order to get the most out of it, you need to make sure you’re approaching it in the right way. Here are steps to take to avoid the common pitfalls and make sure your digital transformation project is a success.
Define your goals before you start
Like any other business strategy, digital transformation projects need to have a clearly defined purpose, vision and objectives. However, the most common drivers of digital transformation projects are market competition, changing customer expectations and external events forcing rapid change, with the Covid-19 pandemic being an obvious example here. Research from the McKinsey institute has found that the pandemic has forced companies to adopt digital technologies three to seven years faster than they would have before. These factors all contribute to creating a sense of urgency and pressure to deliver the project in as short an amount of time as possible.
While this pressure is very real, it's crucial to take time before the project to pin down the specific outcomes you need to achieve, define a clear vision that everyone agrees on and detail the key milestones, resources required and a framework for delivery. If you don’t put together a thorough and detailed plan at the start, the project is much more likely to fail.
Know when to press pause
It’s impossible to predict every scenario and even the most comprehensive plans aren’t immune to stumbling blocks. Digital transformation projects are fundamentally uncertain and it's often the case that the best solutions need extensive testing and experimentation. There are many different reasons which hold up progress on a digital transformation initiative so don’t be afraid to take a step back and reevaluate the project when it stalls.
It’s important to recognise when something isn’t working as early as possible, regardless of the time, effort and budget that has already been invested. After all, these cannot be recovered once they’ve been spent, a phenomenon known as the sunk cost fallacy. The sooner you know when to stop however, the sooner you can minimise the losses and mitigate the risks.
Pausing the project doesn’t mean it will never get going again. Instead, see it as an opportunity to regroup and work out what's going wrong so you can restart the project knowing that it will be the success you always intended it to be.
Don’t be afraid to fail
We all know that making mistakes is the best way to learn, but we live in a society which views failure as a terrible thing. As mentioned at the start of this article, some of the most well known companies have created huge successes off the back of projects which initially failed. If your project has stalled and you can’t see any way to get it back on track, knowing when to let it go may be your only option. It may sound like career suicide, but pushing on a project which just wont work could cause far more lasting damage to your brand reputation than if you were to bow out gracefully.
If a project does fail, all is not lost. The world of digital transformation is constantly changing, so building resilience and being adaptable are key. Switching your thinking around from viewing projects as ‘failures’ to ‘experiments’ can provide you with valuable insights into which learnings you can take forward, and which ones you can leave behind.
Despite the challenges caused by the pandemic, or perhaps because of them, more business leaders than ever are looking to overhaul their digital offering. Research by PwC has revealed that while 52% of companies are planning budget cuts, only 9% are cutting funds from their digital transformation projects. It’s clear that digital transformation will continue to be a top priority for businesses as we move through the next decade and avoiding these pitfalls will help ensure your projects are a success.