More than ever, there is an urgent need for companies to ensure that they not only carry out digital transformation (DX) but that the DX delivers solid benefits.
DX was already important and relevant for organisations before, but with change and disruptions accelerating in the marketplace, DX is now an imperative.
For many firms in the near future, a successful DX will determine whether they thrive or topple.
Unfortunately, here’s a sobering fact: 70% of DX initiatives fail.
There are many reasons for this, but one of the most common mistakes we see is thinking that a shiny, new digital solution will solve all legacy problems.
“There is no one single digital solution that is going to fundamentally change an organisation,” says Max Ferrin, Transformation Director, Renoir Consulting. “Instead, ask: How does the DX initiative link back to your company’s vision, mission, goals or strategies? What is the business need that is to be addressed?”
1. Ensure that processes are efficient
Implementing digital transformation on inefficient or broken processes is like giving a broken-down car a fresh coat of paint and hoping that will make it run better.
Yet that is what many companies end up doing, sometimes adapting a tool to conform to the company’s broken processes!
It’s important to ensure that processes and systems are in good shape before implementing DX, otherwise the problems will still exist, and often informal workarounds will arise, leading to additional inefficiencies.
2. Be clear about the benefits from the digital transformation
Naturally, companies run a DX initiative because they want to achieve a goal, be it to increase income, decrease costs, streamline the organisation’s resources or expand future capabilities.
However, a surprising number of companies do not clearly define the outcomes they’d like to reap from their DX initiatives. As a result, they have a difficult time tracking progress and gauging success. When DX outcomes are clear, relevant measures can be put in place to provide true transparency on the completion of the program and the benefits
achieved.
“Unfortunately, this is almost always one of the key things not done when it comes to digital transformation,” says Ferrin.
3. Leverage digital tools
Once the “house” is in order, it is time to enhance processes by leveraging digital solutions that will enable effective online collaboration and deliver the right outcomes.
4. Onboard the workforce correctly
Frequently we see companies spending millions on top-notch digital solutions, be it data analytics, artificial intelligence or automation, only to discover that the organisation is not prepared to use it or even understand it.
“One of the biggest problems we see is that companies do not know how to onboard people to the new tool. They don’t spend enough time on that,” says Ferrin.
“A lot of companies believe that change management involves sending an email on the day the system goes live with the message, ‘Hey, we have this new system and it’s live. Use it!’,” says Ferrin.
There are a lot of activities that need to happen before that email is sent out. In fact, before even the DX initiative planning is done.
For example, one of the most important steps is to define the need for change to the workforce to get buy-in and ownership from them.
“Articulate the expected outcomes. What are the benefits of implementing the initiative? Then, create an engagement plan to ensure that everyone that needs to be aware is aware,” says Ferrin.
While it’s true that a digital system can improve the way people work, it is the people – the workforce that is expected to use the digital tool – that ensure a successful implementation. Human intelligence is still necessary in digital process design and usage. Human beings are required to spot flaws, identify root causes and eliminate problems.
Organisations need to take a clear, hard look at their workforce. Do they have the necessary buy- in and resources to adopt the new solution?
“Are you going to scale down your digital transformation because the people that you have are not aligned or capable? Or are you going to try to change the people – requiring participation, upskilling, possibly new talent and external help, so that a robust DX programme will be delivered?”
If these factors are ignored, companies may end up with expensive digital solutions that are used improperly or inconsistently throughout the organisation, with any anticipated ROI left unrealised.
IMPLEMENTING SUCCESSFUL TRANSFORMATION
There’s not one single success factor when it comes to DX.
“Digital transformation for one company can mean something completely different in another. There’s no one-size-solution that fits all – that’s not how it works in reality,” says Ferrin.
This is because every company is different. They have different needs, goals, challenges, and advantages.
Successful DX lies not in implementing the latest, trendy digital solution but to ensure that the DX links to verifiable benefits that will align with the company’s vision, needs and goals.
For over 25 years, Renoir Consulting has been the trusted business transformation partner for companies globally. We have partnered with clients from diverse industries in more than 50 countries to co-create bespoke solutions that produce real outcomes and sustainable change. Our boutique approach means that our clients receive the highest level of professionalism, expertise and leadership ownership. Learn more about us at https://www.renoirgroup.com or on LinkedIn (Renoir Consulting).
