The Challenges Of Digital Transformation – part 1 of 4.
In this four part series we will explore the pillars of a robust digital transformation strategy, the issues being encountered by businesses as they attempt to take advantage of digital transformation trends and technologies, and how Transfit (a "purpose-built" digital transformation consultancy) is addressing these challenges.
Our research, and that of many others, suggests the transformational opportunities presented by modern technologies are largely being squandered by Australian organisations, of all sizes, due to the combination of factors below.
Accepting that the four main pillars of digital transformation opportunity are
Engaging Customers,
Empowering Employees,
Modernising Products and Services, and
Optimising Operations,
the single biggest factor limiting the promise of digital transformation is the poorly-aligned, piecemeal approach being taken across these pillars. In fact, most digital transformation initiatives are little more than BAU projects dressed up to align with popular trends rather than part of a robust holistic strategy.
This was borne out in a recent Microsoft Australia survey of 500+ medium to large Australian enterprises titled “Understanding Your Journey to Data-Driven Digital Maturity”. Of the many enlightening, and concerning, insights contained in the report, two really stood out for me. The first is this graph showing the relative prioritisation and success of projects across these four pillars.
While at first glance the focus and headline success of the Customer Engagement / Experience (CX) initiatives is encouraging, the fact that they are at the absolute exclusion and detriment of the other three pillars is very concerning.
Our view is that the success of a holistic digital transformation strategy can only be measured against the weakest pillar. In other words, why spend all your money and effort on CX initiatives if your products are outdated, your systems are broken, and your staff are disenfranchised? Wouldn’t a better success graph look something like this?
Compounding these concerns is the following findings from the report regarding the Customer Engagement initiatives.
Despite these efforts however, the harsh reality is a significant proportion of CX projects are failing. Thirty-seven per cent [of respondents] said that between 20-40 per cent or more of their projects had failed. Furthermore, this translates into significant wasted dollars - 17 per cent identified they had thrown between $250,000 and $500,000 or more on failed projects down the drain.
And organisations aren't beating around the bush when it comes to the reason as to why these projects have failed. Leading the way is 'customer resistance to change'.
How is it that this, or other negative customer responses to any initiative, are only realised after so much money has been spent? To us, this smacks of poor or ill considered “problem definition” testing at the outset, a far too common mistake but one that shouldn’t be made in a well-executed project, but more on this in part 3 of this series - Engage For Success.
This problem domain is not the sole responsibility of the end client however, with many Management Consulting firms and IT providers exacerbating the problem. Fearful of missing the Digital Transformation bandwagon, these suppliers are simply wrapping their traditional products and services with a Digital Transformation bow, rather than developing and delivering expanded and integrated offerings that truly move the dial for their clients.
Up next: What Does The Data Say? - part 2 of 4.
About the author: Graeme Armstrong started Readify in 2001 and held the post of CEO then Sales Director through their sale to Telstra in 2016 and his departure in 2018. Returning to his entrepreneurial roots Graeme has now launched Transfit, a specialist digital transformation consultancy, purpose built to help clients of all sizes with a holistic blend of management and technology consulting.
If you feel Transfit’s capabilities and approach can assist your company’s digital transformation program, or you feel you have what it takes to join our elite consulting team, please connect with us via LinkedIn or at www.transfit.com.au.