Every business is a digital business these days, there’s no escaping it. Whether you want to improve back-office operations or enhance the customer experience, IT will usually form a key part of the solution. Most often that means replacing outdated systems and processes with new and more efficient ones, while getting staff across the business to adapt to new ways of working.
Yet, large scale digital transformations can be complex and are rarely straightforward to pull off. According to academic research, around 70% of digital transformations fail and many projects go over time and over budget. This is despite digital transformation having been at the top of corporate agendas for at least a decade, a trend that has accelerated since the pandemic sparked a global shift towards hybrid working.
So what can companies do to ensure large scale IT upgrades have the best chances of success?
Digital transformations rarely, if ever, go wrong because of the tech, says Nishant Dwivedi, country head of FullStride Cloud, UK and Ireland at Wipro. Instead, companies fail to understand the “people” side of major projects, he says.
“In many cases project leaders focus too much on asking whether they have the right tech and tools to achieve the right outcomes, but not enough time asking if their workforce is brought into the vision and understands why the change is needed.
“Digital transformation is a journey and people take time to adjust. It’s also about trust and good communication. If senior managers aren’t conveying the benefits of change, then the workforce is less likely to buy in.”
Mike Essex is European head of the talent and change practice at Wipro. Companies often struggle to source the talent they need for major IT projects due to skills shortages, he says. Many also fail at the execution stage because of poor planning.
Digital transformation also has a measurement problem, he adds. “Technology is tangible, meaning its outcomes are quite straightforward to measure. But changes to workplace culture required to pull off big IT projects are much harder to gauge.
“Many organisations only realise halfway through a project that they have a ‘people problem’ and that staff are not embracing change. But by then it’s too late.”
Align with business goals
Despite the high failure rate, companies should not be daunted by the prospect of starting a large-scale digital transformation, says Dwivedi. The benefits of upgrading legacy systems can be significant, as long as organisations adopt a proactive and strategic approach.
He believes that, as a starting point, leaders must look at their business as a whole and establish “what their transformation will look like”.
“Does what they want to do really align with business goals? Have they got the right teams and leadership structure in place, and have they got the right leaders in place to effect the change needed?” he asks. “Companies usually need to be challenged at this point. More often than not we find the solution the customer wants to execute won’t be the best one.”
Once an organisation has worked out its overarching needs, a plan must be devised that clearly sets out goals and deliverables. Big organisations will often have a portfolio of digital transformation programmes running concurrently, so it is sensible at this stage to inventory existing projects to avoid duplication.
“Having a properly drafted strategy doesn’t mean the direction of your project won’t change, but it will reduce the risk of things going wrong later on,” says Dwivedi.
Deploying the right tech remains critical in any IT project and customers must weigh up providers, costs and whether programmes can be integrated and scaled up in future. The plan then needs to be sold to staff, who will be crucial to its implementation, a job that can be challenging.
“The key is leadership alignment – making sure senior managers are on board with the plan’s objectives and communicating the benefits effectively right across the business,” says Mike Essex. “This involves strategically sectioning employees into groups, generally by departments, and tailoring messages to them.”
It is vital that a firm explains its roadmap and shows staff how digital transformation will benefit them and the wider company. “Middle managers will naturally ask, ‘what’s in it for me? Learning all of this new tech is going to be hard.’ But when you communicate properly things go well.”
A learning and development programme also needs to be prepared and rolled out to teach staff how to use the new systems. With mobile and online platforms, learning can be made bitesize, meaning it won’t disrupt people’s workflows, notes Essex.
‘Pulling in same direction’
One part of the organisation should be tasked with overseeing delivery of the transformation plan and monitoring its progress. However, as multiple stakeholders will be involved – from ops and finance, to tech and sales – all parts of the business need to receive regular feedback on how things are going.
“Good programme governance will help ensure everyone is pulling in the same direction,” says Dwivedi. “That minimises the chances of the plan going off track and maximises the likelihood of success.”
Wipro has helped some of the world’s biggest companies to devise and execute successful IT upgrades. At the heart of its approach is a desire to balance people and processes, presenting transformation as a step change in mindset and culture that requires deep-rooted change to business practices, guided by strong leadership.
Dwivedi points out that, while some firms would rather avoid the hassle of a digital transformation, that simply isn’t an option in what is now a digital-first economy.
“By not adapting you risk becoming obsolete,” he warns. “But if you are proactive and tailor how you handle a transformation, it can be an enjoyable and fruitful process.”
Essex agrees, adding that, with the right planning, the pitfalls can be avoided: “When a major digital transformation project goes well you can be very pleasantly surprised. The long-term benefits to the organisation in terms of growth and efficiency will also pay dividends.”