Digital transformation projects need the right foundations

We all know that you can't build a house without solid foundations. While the sandy shore next to the sea might offer great views, your house is likely to sink into the ground, crack and crumble without the right base to build upon. Digital transformation is no different. While many heads are turned by wanting the latest, shiniest technologies to keep up with the business equivalent of The Jones, if due diligence is not done at the outset to align them to stakeholder value, and ensure that the technology bedrock is in place to allow these new digital solutions to work effectively, then your digital house will fall into the sea.

If an organisation embarks on a digital transformation initiative driven purely by technology ambitions, they're already off to a false start. In recent years we've seen an influx of exciting technologies from AR/VR to the Metaverse and incredible leaps forward in the development of AI, but incorporating the newest and shiniest tech without first defining your business objectives can be a costly exercise. Digital transformation is not simply about the implementation of new technologies. It's about business transformation that delivers real value. Ensuring you're looking at the bigger picture by clearly defining what is being transformed, how this will be integrated, and the impact this will have on people, processes and your customers, are all steps that should provide you with the confidence needed in your digital transformation project.

Getting the basics right

Before companies start spending millions on new digital technologies, they must first establish whether they are in a position to extract value from the investment. This is both a strategic decision, establishing whether the investment will fundamentally change and drive sustainable stakeholder value, and a technological one, ensuring a digital capability exists to enable a seamless customer experience, and effective integration of solutions. Unfortunately, these conversations are often lacking before decisions on digital technology implementation are made.

It's of fundamental importance to get these basics right. These technologies will need to co-exist in your enterprise alongside a multitude of existing systems, all of which provide important services that your organisation relies upon to do business. Ensuring you can balance value extraction from new technologies while also ensuring continuity of service and change management of existing systems is better explained via a business value proposition than at the implementation coalface. No one wants to be responsible for the meltdown of a legacy system that the business relies on.

No value can be derived from the implementation of an AI predictive modelling solution, for example, if systems that should feed it with data can't be integrated or would cost more to implement or enhance than the value of your ROI. All you're doing is adding complexity to your organisation rather than gaining value. If a robust technology core is not in place to support digital transformation, or it's not considered as part of the wider organisational transformation process, the time and money spent on new technologies will be wasted. And chances are that those technologies will be shut down quickly, which also represents a colossal loss of time and resources.

Looking at the bigger picture

By operating in a tech silo, not stepping back to examine the bigger picture or ensuring all stakeholders are on board, an organisation cannot be certain that it has either the technology foundation in place to enable digital transformation or the correct mindset in place to reap the rewards. Meaningful change is the result of human acceptance and adoption, not just the existence of technology. Technology itself is a tool to be utilised on behalf of your business goals.

Businesses must therefore work as a team to establish what they really need to thrive, enhance working practices or create better customer outcomes, and design solutions that meet those needs. Digital technologies are great enablers of new value creation or to enhance existing value, but will only work effectively when aligned with strategic objectives. 

Managing change

Another critical factor that impacts the success of digital transformation programmes is change management. It is key to establish a strategy that helps internal stakeholders deliver, sustain and drive value from change. This should be supported by the right culture, skills, processes and systems that will enable a smooth execution of new programmes.

This goes back to the concept of digital transformation changing business processes at a fundamental level which then impacts people, job roles and interactions. For example, tasks that used to take days now take hours or minutes, completely changing how a business operates. This requires a change of mindset and hugely impacts employee roles which might have to be reorganised. Introducing new technologies is easy, and introducing new processes is not too hard, but managing the subsequent changes for the people involved can be very difficult. This might not seem obvious initially but must be taken into consideration and planned for from the outset.

Planning for success

Success with digital transformation isn't easy. It's a complex and continuous long-term process. To get off to the right start, it's vital to have a clear vision, goals, strategy and implementation plan in place before starting to build a new digital house that will deliver real value for your business.

It's key to first define the value that you're trying to create - in consultation with all stakeholders - and what success looks like. This also means working out what your company really needs to thrive, grow and create better interactions. That will focus attention and resources, allow you to design solutions that are closely mapped to customer needs, supported by existing technology infrastructure that will render new digital solutions as effective as possible, and enable you to measure progress. And all this must be implemented and managed across the business, not just in a tech silo, to ensure your team is on board for the ride. It's not just about technology implementation, but a smarter use of technology that creates real value for all stakeholders.

Digital transformation is a heavy-lifting exercise and has a high rate of failure, with statistics from Deloitte showing that 70% of projects fail. Most people wouldn't build a house without consulting an architect, so if you're not sure how to plan for your digital foundations or need some help knowing where to lay the first brick, we'd love to help.