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Given the overwhelming success of disruptive companies such as Airbnb, Uber, and Netflix, many businesses are now seeking to follow the path blazed by these pioneers. For most, the starting point is a digital transformation. But doing a complete overhaul of business processes is no small task. There are a number of potential pitfalls that must be avoided along the way.
Digital transformation can be defined as the acceleration of business activities, processes, and models to fully leverage the opportunities and impact of new digital technologies a strategic way. Essentially, digital transformation is business transformation.
There is a lot at stake: the ability to strengthen customer relationships, create new revenue opportunities, and streamline costs. However, these benefits only come to fruition when transformations are managed and implemented effectively.
Done wrong, a transformation can throw critical business operations into disarray and cause confusion and discontent amongst employees. In this post we’ll cover 6 common mistakes that should be avoided to ensure your digital transformation runs smoothly from start to finish.
1 – Focusing on short-term goals
Digital transformation should be viewed as an ongoing, continuous process of change. This is because the expectations of customers and the needs of businesses are never static. However, in many companies, digital transformation is treated as something of a box-ticking exercise – one that can be forgotten about after a set completion date. This completely misses the point of a transformation.
While short-term yardsticks of success such as return-on-investment (ROI) are helpful, they can be misleading in the context of a transformation. Rather than concentrating on quick wins, companies should adopt a more long-term vision. Non-traditional metrics such as new registrations on digital platforms or online engagement levels are better ways of measuring an organisation’s digital transformation success. Without a commitment to transforming the core of the organisation, the legacy of old business processes will hinder any true progress in digital transformation.
2 – Thinking it’s all about the tech
Transformations are about much more than deploying new technology. Technology is just an enabler: finding ways to improve the customer experience should be the primary driver guiding all digital transformations. Obviously, new technologies are indispensable when it comes to implementation. But they can draw attention away from the end goal: tangible improvements in serving customers.
3 – Moving too quickly
While there is nothing wrong with having ambitious objectives, overhauling an entire company is an inherently complicated and delicate process. While the transformation happens, critical systems must continue to function without any interruptions. In some respects, it’s like living in a house while it’s being renovated. Given this, transformations work best when done in manageable steps not massive swoops that can cause chaos. Those leading the transformation should think of it like a marathon, not a sprint. Also, there is no finish line – IT modernisation is an unending journey.
4 – Poor communication
Digital transformations require board-level support and effective top-down communication. A disconnect between the board and hands-on management can undermine a change as the people delivering the project don’t actually understand the vision and purpose of the project. Ensuring that the message from the board gets through means identifying and engaging key influencers within the company. It is worth remembering that these influencers aren’t always those in leadership positions. Seeking feedback from customers and employees throughout the transformation journey should help keep the initiative moving along smoothly.
5 – Mission Creep
Before the transformation begins it’s imperative that companies invest the time and effort needed to carefully craft a blueprint of all the processes involved and their links to concrete measures of success. This way, all employees will know what success looks like from the outset. When the plan and desired outcomes have been drawn up, you should stick to them. Moving the goalposts halfway through the process will cause confusion and also waste time and money as revisions will need to be made to newly-implemented changes.
6 – Going it alone
Sticking exclusively to in-house resources is often a big mistake. Digital transformations are simply too specialised and complicated for most organisations to be successful without outside consultants who have done it before and can serve as expert guides. Businesses need people who have a sound understanding of best practices as well as the operational realities and concerns of the business.
For example when Centrica, the parent company of British Gas, was going through a digital transformation in 2016, they brought in David Cooper as an interim CIO to help oversee the project. David used his expertise to transform Centrica’s enterprise data management capabilities by leveraging open source big data technologies. Speaking to CIO, David said his greatest achievement at the company was changing the culture of the IT team.
“When I joined I think there was a state of mind of the digital team simply building what they were asked to build, and that wasn’t the right solution. There were quite a few issues and by changing the way we do things we could cut costs by £200 million. By understanding the business problem better we are much more confident and proud in delivering radical, revolutionary technology at Centrica,” he said.
Following David’s departure from the company, the systems he put in place are now being maintained and refined by Centrica’s Infrastructure and Operations director, Darren Miles. Darren is now responsible for delivering intuitive IT services to a user base of over 40,000 end users within the Centria group.