Missed opportunity

Everywhere you look, businesses are investing in the power of change – whether through introducing new tools, digitalising legacy processes, or developing fresh people strategies. But digital transformation isn’t just about shaking up old ways of working.

Businesses are facing fast-moving competition, fickle consumers, changing legislation, and uncertain political climates, meaning they need to be more agile than ever before. In order to retain a market advantage, transformation projects are now more critical than ever. After all, a staggering 83% of senior managers agree that staying abreast of technology changes is vital to keeping up with the competition.

In a highly competitive, globalised marketplace, almost every business is feeling the pressure. An independent research agency, Loudhouse, conducted interviews with 622 senior managers who have had significant involvement with digital transformation projects. Respondents came from the United Kingdom, Germany, and the United States, across a range of roles, industries, and business sizes. The research discovered a worryingly high percentage of digital transformation projects aren’t creating significant business impact. Projects are meeting their stated objectives, but they’re not going on to benefit the wider organisation.

What and whom is driving change?

Digital transformation is widespread, but it’s also a relatively recent trend. The businesses surveyed found that 59% had started their projects in the last two years, with only 6% having begun over four years ago. In terms of what transformation involves, each project surveyed was as unique as the business behind it. But there are many commonalities in motivation – as well as a growing sense that external factors, not internal pressure, are the main reason for launching the project.

External factors outside of a business’ control are a powerful source of motivation. In the survey, 83% feel keeping up with technology advancements is a leading motivator, with 89% saying that this has had either a significant or revolutionary influence on business change Industry wide changes, like regulatory shifts, are the second most influential macro factor (79%), In the UK, factors such as Brexit were examples of political drivers (73%), and increasing costs (73%) following close behind.

In terms of who was driving these projects, it was not unsurprising that nearly seven in ten (68%) businesses report that IT is in control, followed by operations (52%), marketing (43%) and finance (42%). Interestingly, only a quarter of businesses report that the board of directors are leading the charge – suggesting that digital transformation can come from any level or department across the business.

Measuring Success

Although the types of projects varied widely, when it comes to analysing the overall success of their transformation projects, businesses remain positive with 88% of respondents stating that they feel their project has been highly or reasonably successful, when charted against the targets they hoped to achieve. 42% of respondents were happy to say their project had gone or was going better than expected.

However, these feelings are difficult to compare against compelling evidence that digital transformation programmes are actually having a significant impact on the wider organisation. When asked to rate their project’s impact, under half (49%) feel their project has had a significant impact.

When delving further into the data, optimism is high at the beginning of the project but issues become apparent once the sourcing of suppliers phase commences. 71% say the project is running better than expected at the development phase but this drops to 22% once it is time to source suppliers.

Another area where there is a correlation between expectation and success is in stakeholder buy-in. Four in ten respondents feel that stakeholder support was lacking during their transformation project. And just as optimism fades during the life of project, so does stakeholder interest with 73% saying they had the best possible support at the beginning, but later, this falls as low as 48%. This drop-off suggests the onset of delays is closely linked with diminishing stakeholder support, as these individuals have the clout to drive projects forward. While a further quarter (26%) say board level support could have been better during their project.

Overall, it seems stakeholder support is directly aligned to the success of a project, with consistent stakeholder support being particularly vital – because when this drops off, delays kick in. As such, it’s clear a lack of stakeholder engagement is a serious roadblock and should be avoided where possible.

Better Transformation

The survey also found a correlation between project success and the organisations attitude and use of tools to help the processes. Virtually all organisations (96%) say that ‘stakeholder collaboration is important for a successful transformation project’ – so the board, or an elected board champion, should be as invested as possible.

Nine in ten (88%) agree that ‘a successful digital transformation programme can only work if everyone in the business works together’, which means spreading the message about the vision and planned process of the project is crucial. Once a project is complete, the impact of collaboration becomes even more apparent; it’s cited as the number one factor that contributed to the success of a recently completed project.

The Right Tools

Almost half (49%) of businesses with recently completed transformation programmes feel technology played a key part in their project’s success. The majority (81%) say they have a specific solution in place to support their project. 39% use a single unified platform, 35% use integrated solutions (a mix of different tools), and 7% use a specialist but standalone solution.

This use of tools to help manage major projects offered a significant boost to success rates with organisations say the overall success of using a unified solution is almost 3x higher than using integrated software. 67% of organisations using a single platform say the project fully runs to schedule vs 40% using an integrated approach.

This correlation between unified solutions ultimately seems to be the impact of standardisation. Those using disparate technologies may find those tools don’t speak to each other effectively, leading to the duplication of work or miscommunications. With a single, standardised tool, this risk can be mitigated.

Conclusion

The data provides a valuable insight into what’s happening within a swathe of digital transformation efforts and paints a coherent picture of the factors that drive success which include:

·         Seamless collaboration across every part of the project is critical.

·         Project management tools can help but are more effective as part of a unified solution.

·         Organisations need to ensure that stakeholders are brought into and kept within the project, even though challenging stages such as vendor selection, to keep moving forward.

Alongside sufficient budget, these are the top factors cited by organisations that had successful projects and significant beneficial impact to the wider business.