Digital transformation investment and maturity have never been higher. I think by now everyone has seen the explosion of spending on technology and transformation projects since the beginning of 2020 – like Microsoft’s estimate of two years of transformation in two months. With so much change happening in so little time, it’s all the more important to have a clear path to ensure success in these endeavors.
The rate of failure in these kinds of projects has always been surprisingly high. In 2016, McKinsey estimated that no less than 70% of complex, large scale transformation projects fall short of their goals. Two years later, McKinsey revised that estimate, reporting that only 16% of digital transformations achieved “successfully improved performance.”
When trying to understand what goes wrong in these transformative endeavors I believe that it’s rarely the technology itself. For the most part the tech is mature enough and it fundamentally works. The challenge is taking it and turning it into positive, valuable outcomes. And for that you need to bring your people along. Cultural acceptance is the crucial part of digital transformation.
People have different reasons for not using new technologies. Perhaps they’re threatened by it and think it’s going to negatively affect their job. Or perhaps they don’t know how to use it and aren’t successful despite wanting to be. Or simply, sometimes change is slow and people like things the way they are.
How you introduce new technology into your organization is arguably more important than the technology that you chose to deploy. If it’s rolled out at the wrong time, people won’t give it the attention it needs. If it’s rolled out in the wrong way, people can get a bad impression of it. However, we’ve learned that there are three steps that can help teams overcome some of the more common obstacles and pave the way for more successful digital transformation – or simply any technology project.
1. The What and Who of change
It sounds simple to say, but knowing what you need to do before you do it is often overlooked. It’s tempting to introduce new technology and only then go in search of ‘problems’ it can solve. However, gaining an understanding of what processes or outcomes need to be addressed is step one. If automation is part of the plans, identifying which processes are practical to automate is also an essential part of the process. Some things are suited to automation – with tools like RPA – and others aren’t. It’s essential to spot the difference early.
One fundamental part of this pre-transformation assessment has to be – who are the people that will be affected by these new processes and new tools? When we’re talking about cultural acceptance, the first step has to be identifying who will be affected and what impact they will feel.
In our experience working with customers, such as Tesco, this is very achievable. There are process mining and process discovery tools out there that can map out how the web of people are affected by any process. With that knowledge in hand, you can then begin to develop new processes, adapt technology to your business and roll out the changes.
2. Communicate and train
Because you know who is going to be affected by digital transformation, and you know what impact the change will have on them, it should be possible to address any potential concerns proactively. If employees are going to be expected to use completely new tools – either new systems or simply new interfaces – then they need to have the training laid out for them so that they know what they’re doing. This is a simple training mission because in theory you’re providing employees with new tools to do their jobs better – at least that should be the case if step one was followed. This training is a simpler ask and will overcome barriers or unfamiliar new tech.
If, however, you are trying to change ways of working more fundamentally – perhaps around automation or analytics – then communication, understanding and training need to be wedded together in a more intricate way. This is the change that people more commonly resist because there is more uncertainty. In many of our customers, we work with SAP – specifically SAP Enable Now – to help companies to communicate with affected employees early and in the right way. Easing people into training that they can understand and that’s relevant to them will help to bring them on the transformation journey.
3. Keep assessing success
Once you know what needs changing, you’ve changed it and you’ve taken the right steps to bring people along with you, it’s important to understand if the change is positive. Something our customer BRC was able to quantify in a very positive way. Has the transformation worked as hoped? And if it hasn’t, what is the status quo? Do you need to go back to step two and re-train/re-develop your people? … Or even back to step one and re-evaluate the change entirely.
A lot of projects, surprisingly, will fail because early understanding of what was happening wasn’t gathered (or gathered properly). If something isn’t working, you have a limited time window to change it before the negative change becomes the new status quo and people either reject it or fall into a habit of doing things incorrectly and that becomes difficult to change.
Process management tools can help to constantly make the assessment if whether something is working as it should be. They should be used alongside infrastructure management to assess the wider impact of technology. But from a cultural change perspective, understanding whether people have embraced new ways of working is a key indicator for the long term success of digital transformation.
The long path to transformation
The task of transformation is never finished. As things change they create new situations and challenges of their own. So being constantly in the loop of what’s going on within your business – creating a truly connected enterprise – will not only help make decisions, but also stay close to what’s happening with all the people in the organization. This will ultimately be the critical success factor.