The delivery of successful digital transformation projects is vital for any business looking to effectively innovate, manage risk and respond to change. However, when your digital transformation project fails to meet its objectives, resources can be wasted, and your people negatively impacted.
To assist business leaders and managers looking to undertake – or who are currently undertaking - a digital transformation project, Kamal Prasad from our Technology Advisory team outline common reasons why digital transformation projects fail and share several top tips to ensure your next project is a success.
How can businesses deliver successful digital transformation projects?
In this webinar, our panel of technology experts will be discussing the strategies, tools, and techniques needed to deliver successful transformation outcomes and how to deliver these initiatives in a lean cost environment.
You can also watch the previous webinars in our IT Cost Optimisation series.
What’s driving increased business interest to undertake digital transformation projects?
Did you know that 79% of middle-market businesses intend to increase their digital investment spending in the future? (BDO, 2019 Digital Transformation Survey)
In today’s fast-paced and digital world, innovation and continuous improvement are critical to staying ahead, regardless of your industry. Changing consumer and market conditions demand continuous innovation and adaption whether that is in the form of new products, services, experiences and efficiencies.
For a modern business to be successful, decision-makers need to continually ask ‘what’s next’ for their future business and industry.
As David Fechner explained in our recent Rethinking Manufacturing webinar, “the secret of success for Australian manufacturers will be the ability to innovate and quickly adapt their products and services while deeply understanding the market they’re supplying into”.
Not sure, what constitutes a digital transformation project? Below are some examples of projects our Digital & Technology Advisory team have recently been supporting our clients with:
- An internal system change or migration that improves business efficiencies by reducing manual labour or helps the business better adapt to changing working environments such as a moving to the cloud facilitating remote working and collaboration
- The build and release of a new product or capability to enhance customer experience and open the door to new markets and revenue streams
- A risk reduction project to effectively manage new challenges arising from advancing technology such as cyber risks or respond to changes in the regulatory environment
Could uncertainty lead to innovation?
Another interesting consideration for businesses looking to undertake a digital transformation project is that the current environment – while uncertain – is ripe for innovation.
Since the outbreak of COVID-19, we’ve seen businesses rapidly adapt their operations to meet the new needs of consumers in new ways. Many technologies that were once in the ‘nice-to-have’ or ‘in progress’ categories such as cloud computing, advanced analytics, Internet of Things (IoT), RPA, contactless payments and platforms to support working have become vital to operating effectively in today’s environment.
We’ve seen a flurry of innovation in manufacturing, financial services and the hospitality sectors, as they rapidly respond with technology to address challenges such as social distancing and employee safety, remote collaboration, sudden shifts in demand/supply as well as manage their cost pressures.
To give a few examples, restaurants and hotels are introducing touchless menus, check-in and payment systems. Technologies such as AI and IoT are being used to increase automation, lower costs and improve customer experiences. The manufacturing and financial services sectors are no different as the challenges of COVID-19 accelerate the need of manufacturers to adopt Industry 4.0 and have contributed to the fast rise of contactless payments and mobile lending.
If digital transformation projects have so many benefits, why do so many fail?
When it comes to the reason why projects fail – especially digital transformation projects – there is no lack of discussion. Decades of research and investigation have addressed this challenge - including ourselves when we spoke to Manufacturers’ Monthly about how to optimise digital transformation earlier this year. As such, many common reasons for project failure such as a lack of leadership, poor stakeholder management, and external factors like unforeseen events and changing marketing conditions are well known.
However, those are just a few possible causes. In a review of research conducted by the University of Sydney into the causes of project failure, they noted 39 different causes, categorising them across leadership, technology, psychological bias, political and economic factors, project characteristics and the external context.
It seems then that there is no lack of things that can go wrong – but what about what can go right? At BDO, we have a deep understanding of what’s required to lead a successful transformation project. Namely, the understanding of the ‘why’, and a plan to take your stakeholders on the journey.
Our top tips for leading a successful project in a COVID-19 world:
1. Ensure you have a clear understanding of what your project aims to achieve and how - whether it’s a long or short term project, having a clear understanding of your objectives and how you will achieve them is critical for success.
If it’s an existing project, however, now is the time to re-evaluate your project goals and plans to ensure they are on track or still achievable.
Several things to consider include:
- Is there a clear definition of success for your project?
- How are you progressing in meeting your project goals?
- What tools and resources will you need in order to meet those goals?
- How are you measuring the benefits that your project will realise?
2. Embrace tools that facilitate digital and remote collaboration – with many employees working remotely and likely to continue doing so in the future, digital platforms will be vital for ensuring that teams can both collaborate effectively and stay on track.
- Are tools and automation helping you get work done or getting in the way?
- Are you assessing insights delivered by the digital tools you have deployed for optimisation and improvement?
- Are your employees comfortable and proficient using the tools you have rolled out?
- Is all project work being captured in your tooling and being made visible to key stakeholders in project teams?
To find out which digital tools we recommend for different businesses, make sure to watch our webinar, Digital Tools to Improve Effectiveness.
3. Engage your people regularly throughout the project – one of the biggest pitfalls when implementing new organisational change such as through a digital transformation project is not engaging the right people in your business – especially those who will be affected by your change. Adopting the right change management approach that engages key stakeholders both in the project as well as those the project’s outcomes will affect is vital for success.
Our National Leader for People Advisory, Jenine Waters, recommends that when looking to undertake a change project the first thing leaders should do is reflect on what they want to achieve with the project, asking:
- Who are the people that you're impacting with this change?
- What is important to them?
- How will you bring them along on that change journey?
To learn more about implementing change management in your business, read our article, What is change management and how can you inspire people through change?
How BDO can make your next digital transformation project a success
At BDO, we understand what successful digital transformation projects look like. It is not uncommon for market disruptions, regulatory changes or competitor moves to impact projects that are in-flight or approved to commence.
Assessing project direction and objectives is a normal and healthy response to dealing with a change in context. However, when a project delivers outputs which don’t lead to your desired business outcomes, it can feel like a waste of time, investment and effort.
When faced with these circumstances, our team of experts can conduct an independent and objective review of your program of work. A ‘health-check’ to inform the best path forward that aligns with your strategy.
We understand the infrastructure, data and delivery that needs to be in place for successful projects. BDO’s Digital PMO service helps business with their programs by;
- Analysing the macro and micro market environment
- Assessing program status against the project charter and objectives
- Reviewing people, processes and technology for program delivery
- Advising on program re-alignment and improving delivery methodology
To find out more about this service, please contact Kamal Prasad or your local office. Find out more about our digital transformation and technology services or read more about our Digital & Technology Advisory services here.