Are Outdated Tools and Processes to Blame for Digital Transformation Failures?
91% of businesses engage in digital transformation, a practice that has been a priority for a decade. Yet, despite the unanimous priority and years of failures to learn from, 70% still won’t achieve their desired digital transformation results.
Entire industries are forced to participate along a knife-edge of risks, with obsolescence on one side and costly failure on the other. Feeling the pressure to keep up, US companies will funnel another $6.5 trillion into digital transformation by 2024, but why? The failure rate suggests $4.5 trillion of that will be pointless.
The system and process for choosing the right software to transform the business is a complete mess. As a result, digital transformation leaders, CIOs, and digital consultants are cobbling together old-school tools to solve entirely new problems. For example, we recently asked a prospective client how they currently run technology evaluations in partnership with one of the big five consulting agencies. He said they still run the entire process using spreadsheets.
At Olive, we believe the failure rate is so high because we haven’t had any innovation in the enterprise technology vendor selection process. Successful digital transformation requires high user adoption. Sourcing solutions in collaboration with the organization can help to increase user adoption later.
What is Digital Transformation Failure?
Innovation Insider classifies digital transformation failure into regression, under-performance, and failure at new tech initiatives.
- Regression is when digital transformation is not progressive. Enterprises believe they are transforming but are embarking on initiatives that should have been abandoned or implemented long ago.
- Underperformance happens enterprises fail to place larger bets on transformation efforts – not investing enough effort into digital projects that will drive value for the organization. There are still digital transformation benefits to be had here but on a small scale.
- Businesses that fail at new tech initiatives when launching a new digital product/service but fails, and they are then forced to abandon it.
The risk of digital transformation failure is exceptionally high – over 70%.
So before you unintentionally accept the many risks and obstacles of digital transformation, here’s what you can do to acknowledge and mitigate them.
How to Avoid Digital Transformation Failure
1. Avoid the Most Significant Risks to Digital Transformation
Change comes with risk. It is inevitable and concerning but understanding your exposure is a necessity.
Transformation Speed Risk
As a CIO, consultant, or digital transformation leader, you’re in a catch-22. To get the most significant competitive advantage, you need to adopt new technology early but not doing due diligence is a recipe for disaster. Rapid digital transformation is riddled with problems: poor integrations, lack of team involvement, and naive strategies, to name but a few.
If you rush, you jeopardize implementation. The ‘Find me the Best’ approach is seldom practical because you overlook the actual needs of your team and business. Urgency leads to poor decision-making, disenfranchisement of your stakeholders, and inevitable failure. The process takes time. You can speed it up, but it must be honored.
Knowing Who to Trust
Just because you’re ready to take the plunge and make the investment doesn’t mean the market won’t take advantage. The reality is this: technology vendors and salespeople have had power in the market for a very long time. They sell their solution, not your solution. This is a massive part of the problem.
What’s worse is that market evaluator sites like G2, Capterra, and Gartner support this power inequality. They give vendors an upper hand by taking money to feature them on their sites. What does that mean for you? It means that when you search for particular software, the answers you get are not ranked based on the best fit for you. They are based on a pay-to-play system. It undermines transparency and credibility. The buyer-seller relationship is risky. You are vulnerable without validating solutions, whether on review platforms or otherwise.
As soon as stay-at-home orders were given, all companies shifted to remote work as best they could. For the agile and adept, it went reasonably smoothly. For others, it has been severely challenging and damaging.
The risks associated were given little time, which is the perfect explainer for the security concerns we now have. In addition, a new work lifestyle and digital transformation introduce a host of new devices and cloud-connected software to your tech stack that all bring added risks.
Employers no longer control where the team logs in from, if the connections are secured and what you are exposed to. It has led to 41% of remote workers experiencing cybersecurity incidents through 2020.
Ireland’s entire national health service suffered a large-scale data breach because of these exact risks. Before that, it was the UK’s NHS, Canva, LinkedIn, Adobe, My Fitness Pal, Zynga, and more. People logging into the internal network from unsecured connections can easily lead to breaches, and rushing into upgrades contributes handsomely.
Cyber attacks cost the world economy $1 trillion last year. However, more tech can bring more risk if you’re not careful.
Regulatory and Compliance Failure
The Facebook and Cambridge Analytica scandal explained how powerful data capturing and digital manipulation are in layperson’s terms. The blatant disrespect for personal digital autonomy through cookie-manipulating tech giants and ever-evolving cyber threats has forced change.
The EU went first in 2018 with enhanced GDPR requirements, and all other first-world countries followed suit. This throws the digital gauntlet down to businesses of all sizes because regulation and compliance are constantly changing. As just one example, HIPAA court payouts against healthcare offices have broken the $15 million mark, so the responsibility is needed.
CIOs are more responsible than ever for ensuring that any innovation they consider complies with local law. Take the example of article 33 of the French Justice Reform Act. The article states that predictive AI used on judges is now illegal. That same law doesn’t exist in Canada or the US. Therefore, you need to ensure that your software purchases are appropriate and legal in all countries where you operate. Otherwise, you run the risk of violating compliance law.
2. Avoid These Digital Transformation Obstacles
Along with the plethora of implementation and compliance risks, there are several obstacles to contend with.
Lacking expertise in Software Procurement
High psychological safety is the biggest factor affecting team functionality, according to Google’s Project Aristotle. What is it? The ability to admit mistakes, concerns, and limitations without fearing embarrassment or the label of incompetence. It also happens to be a problem for digital leaders and CIOs who feel the entire weight of the transformation falls on their shoulders.
Not every CIO will know every emerging technology out there, let alone how to use them. How could they? The role of the CIO should be to guide the process using expert help, not to be a demigod of digital transformation. Not having appropriate insight and unbiased expertise can make scouring the market for perfect solutions a challenge rife with thorns.
Lack of Employee Involvement
There are several stress factors involved in digital transformation. Time is likely the biggest. You want to transform urgently. You want to become more efficient. You want to save processing time. You want to speed up your CX or EX. That’s fine, but that time has to come from somewhere. For most, it ends up coming from stakeholders. Cut corners now, and you will need to invest in fixing the results of a shortcut later.
Hurried CIOs or businesses think time spent going through the process and hearing from employees can be cut out. It can’t. Digital transformation is a team sport.
Expect low user adoption if you don’t involve the team in each part of the transformation. Consistent communication is a requirement. Think about it. If you advance your tech stack without informing or advancing your team in line with it, what will happen? Nobody will know what’s going on, concerns will heighten, employees will resist change, and the fear of being replaced by robots will grow. Overall, excluding critical voices will result in a lack of trust in the digital transformation strategy.
Granted, the time it takes to keep people involved can be significant, but it is not worse than a failed implementation. It’s an obstacle, not a dealbreaker. With the right process and tools in place, collaboration can be improved.
3. Clarify and Communicate the Digital Transformation Strategy
23% of companies have a digital transformation strategy, but 90% are digitally transforming. So, 67% of companies are driving blind?
Digital transformation isn’t just about seeing slow, repetitive processes and replacing them with tech. That’s how you end up with 100s of independent software tools that don’t work together. Eventually, you will replace some or all of them with holistic models.
Like any other part of your business, you need the vision to guide team decisions. What are you aiming for with your digital transformation strategy? What does success look like? What is guiding decision-making? What is the plan to maintain your digital transformation lifecycle in the future?
In addition to the strategy needs, it must be understood that digital transformation is not the responsibility of a singular department or leader. Each department must be involved, and organizational structures, politics, or bureaucracy shouldn’t get in the way. Everyone at the company is likely responsible for executing the strategy, so ensure they understand the strategy from the get-go, have an opportunity to contribute to it and have a voice in the evaluation of digital transformation solutions.
4. Streamline and Innovate your Software Selection Process
Digital transformation is a journey, not a destination. When you complete a project, another will rear its ugly head. Getting a handle on the process now may help put your organization in a more agile position should there be a global pandemic or recession, for example.
The risks and obstacles to finding digital transformation partners are frustrating, and the process is a nightmare, but you can succeed if you block out all the noise and distractions. If you’re going to mitigate these risks and achieve the growth preferred, you need to go back to basics. In truth, there is nothing wrong with much of the software selection process. It’s painfully drawn out, and it doesn’t have to be. Olive honors the thoroughness of the digital transformation process but drastically reduces the time it takes.
We don’t skip steps. We streamline them with automation and agility in a way that keeps your stakeholders involved throughout the software selection process.
How to Avoid Digital Transformation Failure, with Olive
1. Create your Digital Transformation Strategy with Olive
We centralize your digital transformation process giving every stakeholder and contributor a voice. We begin by building from your business needs. What are your pain points? What are the strategy and end-game vision? We use the initial discovery to set the stage for your digital transformation and give your team a clear framework for decision-making.
2. Gather and Understand Stakeholder Feedback
Once we have ironed out your overarching vision and the issues we’re collectively trying to solve, stakeholders are invited to contribute. Olive issues a discovery and feedback survey to elicit their opinions. What do your stakeholders need in the perfect solution?
3. Gathering Requirements
Olive Requirements Libraries help you generate and gather requirements for your software evaluations. This shaves months off the process without preceding the input of key voices.
Olive surveys streamline your requirement-gathering process. If you don’t feel everything has been captured, we even offer you an extensive library of requirements to include or jog your memory.
4. Ranking Requirements
Once you have gathered all requirements, we make it easy for your stakeholders to prioritize and rank them through surveys in the platform.
5. Invite Vendors to Respond to Requirements (in place of RFP)
While they do that, you can invite a host of vendors to respond. (We can also do that for you). To be very clear, one key difference with Olive is that we don’t take commissions or collect fees from vendors. We are very protective of our credibility. We are serving buyer needs only. Period!
6. Shortlist, Evaluate, and Choos the Best-Fit Vendors for your Digital Transformation
The vendors who respond to your needs are given a rating of how well they match your needs. You know immediately who is and is not a match. There is no messing around trying to figure out bias and risks. We give you the information you need to make a decision. Clean and clear.
Choosing Olive – One Tool for Successful Digital Transformation
We’ve been in the software sales space long enough to understand two things.
1. Digital transformation brings huge cost and time savings and allows companies to achieve far more than they ever thought possible. You can reach customers in new ways and markets, optimize employee performance and become a seamless, modern organization.
2. Buyers are at the wrong end of a power dynamic. Salespeople have had all the power, which became about their needs rather than yours. Why else do you think 70% of digital transformations fail? The process is flawed and doesn’t prioritize the client and stakeholder needs.
Olive was founded to disrupt the digital transformation industry. We protect our clients from bias. Vendors know that if a prospect contacts them through Olive, they show up honestly to serve you or don’t get a seat at the table. No BS – everything is timestamped in Olive. Furthermore, we give everyone in your organization a voice because digital transformation is a mindset shift that brings massive change.
Olive is here to provide you with a singular, trusted tool for your digital transformation. We’re here to give you honest, expert guidance, rid you of legacy software holding you back, streamline your process of evolution and get you the tools you need. We’re here to help you transform.