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    The dark side of digital transformation or why 73% of digitalization projects fail?

    Insight
    2021 / 03 / 23
    3 MIN. READING

    Artūras Milašauskas, Sales Director, Novian Technologies

    Digital businesses, where technology is the backbone of the business, seemed like a trendy novelty before the pandemic. It is now clear that this is a survival model. It is not technology or the people in charge of technology who play the major role, but the top management of organisations.

    In accordance with service, last year digitalization has virtually exploded, leaping over distances of several years in a matter of months. And the most successful satellites of the companies that existed and expanded during the first wave were digital technologies.

    However, there is a less prominent side to digital transformation. The one where uncertainty and doubt linger after failed attempts of digitalization projects. Statistical data from official research companies show that at least 73% of digital transformation projects fail to achieve their objectives. Why?

    The causes are many, varied and intertwined with each other: from a lack of understanding about technology and how to develop it, to a lack of communication between different operational departments, to the management’s attitude towards this type of projects, technology and the way in which digital transformation is being pursued. One thing they lack is technology. Because digital transformation is not a technological issue.

    Managers, forget digitalization projects

    To start with, it is not only technology that is changing, but also the ways in which it is developed. If you want to become a digital organization with a new qualitative level of competitiveness or, in the case of the public sector, a whole new level of efficiency, you should forget the digitalization projects that have been going around for several years. Over such a long period of time, the needs, expectations and capacities of an organization change drastically, and that the objectives achieved by a project are already outdated.

    Today’s containerisation, micro-service technologies make it possible to mould big solutions into a small but workable piece. The more often a working functionality is developed, the quicker it is evaluated and the quicker it can be repaired, changed or improved. Intensified communication between customer and supplier means a smaller gap between expectations and needs and the result.

    In general, it is a mistake to consider digitalization as a project. If we really want a digitally driven organization, digitalization must be a never-ending and ever-changing way of working in the organization, not a finite project. This means that the organization no longer has a separate IT, digitalization strategy. It simply becomes a strategy for digital activity. While digital technologies are no longer a means of servicing activities, but a way of doing things.

    This means that the digital transformation of an organization needs the commitment and ongoing involvement of management and operational people.

    Start taking an interest and talking

    Motivational slogans such as “we will become a digital organisation”, “we will create a culture open to innovation” are all well and good, but how do we actually make them happen? Where should we start?

    The first thing to do is to abandon the legacy of painful experience: to analyse successes and failures, understand the reasons for them and avoid repeating mistakes.

    It is essential to have digitalization and innovation heralds in the organization who will develop new technological topics, analyse them and share their knowledge with colleagues, thus engaging and motivating them. Then, when the time comes for the new technology to emerge and integrate, the people in the organization already have an understanding what is at stake and how the change will benefit them and the organization.

    It is equally important that these activities of the innovation heralds are not seen as extracurricular, “after the serious work is done”. This should be an important and valued part of the work.

    And do get some exercise

    The next level is an exercise. No one has ever become a champion without getting up from the couch.

    Digital organization building exercises are usually organized in partnership with a technology provider. Our partner RedHat even has a special name for them – Innovation Labs.

    These exercises build joint supplier-customer teams made up of the management, operations and IT people. They choose one specific operational challenge and solve that problem together, using the latest technology and development methods.

    The role of the supplier in such exercises is to bring knowledge of the latest technologies, the necessary platforms and experience from different digital transformation projects.

    In such exercises, the organization not only solves a specific challenge, but also acquires technological knowledge and practical skills that can be successfully applied to other operational challenges, bringing increasingly more people into the circle of “innovators”. This is the path to success for an organization seeking to make a seamless transition from buying digital tools for work to continuously improving digital operations.

    Somewhat reminiscent of a virus spreading in geometric progression? Except that this pandemic brings about a good infection.