4 Reasons Digital Transformation Initiatives Fail

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Digital transformation can be a daunting task to tackle as enterprises look to improve efficiencies and market competitiveness. With so many moving parts and stakeholders, overhauling processes and technologies often creates opportunities for costly mistakes leading to poor execution and failure to achieve business outcomes. Developing a holistic strategy prior to beginning a digital transformation can help avoid these four common mistakes.

Mistake #1: Beginning and ending with technology

The first mistake may seem counterintuitive as digital transformation initiatives inherently involve technology. However, it is critical to clearly identify the goals and intended business benefits prior to selecting or implementing a technology solution.

For example, a large manufacturing company wanted to consolidate and optimize services across acquired entities in their portfolio. They invested in tools and integrating systems, but they neglected to first outline their goals in terms of business outcomes.After rolling out the new technologies they discovered the system did not meet the needs of the local regions. Subsequently, adoption of the new tools failed. FPT Software was brought in to work with the CIO and various stakeholders to understand business challenges and desired outcomes, develop a clear strategy for integration, and architect the solution. Following this engagement, the revamped system was successfully rolled out and achieved a 45% improvement in quality of service, first time incident resolution improved by 60%, and total cost of ownership was reduced by 30%.

Viewing the technology as an enabler rather than the solution allowed the organization to provide value to its users and the organization’s bottom line.

Mistake #2: Lack of cross-functional team engagement

When introducing new technologies, a common obstacle stems from internal adoption. Human nature tends to lead people toward what is “tried and true.” Understanding your users’ current challenges and potential concerns with changes in processes or technology will set up your initiative for success. Gathering feedback from users also provides insight into which features are most beneficial.

The product engineering group of a global company embarked on several product transformation initiatives. They created various internal tools that were not adopted as envisioned. To help improve adoption, the team at FPT Software interviewed users from cross-functional teams to understand process challenges and system limitations. Following a series of design workshops, FPT married the revised objectives of the new product along with the technical specifications to create a new user experience. Once an early prototype was ready, FPT went back to each team to test the new tool. Engaging cross-functional users throughout the process enabled the product to become more valuable and ultimately increased adoption by 90%.

Mistake #3: Failure to be people-focused

When approaching a digital transformation, the first message to convey must articulate how it will impact those involved. Communicating what positives will come about for them personally will directly define the success of organizational changes. This small shift in the way a change is communicated can shape whether it’s viewed as a nuisance one must endure versus a welcomed shift into a better workplace experience.

FPT Software was working with a client to modernize a legacy system. Beyond the issue of an aging and fragile system, those who knew the systems well were beginning to reach the end of their careers which created a chasm of knowledge between team members. Our team presented various models to the executive board that identified ways to modernize the system and lower overall costs. However, the full modernization vision and what it would mean to each employee was never fully communicated resulting in a lack of buy-in from the team and the program was shut down.

A few years later, the same client reached back out to restart the program. This time, the full vision and individual benefits were clearly communicated to the team and buy-in was achieved.The exact same options were provided but now with the benefits clearly communicated, the program had the opportunity to succeed, and employees were welcoming of the changes.

Mistake #4: Involving customers too late into the development process

The final common mistake I have seen in digital transformation is a failure to involve customers early in the process of transformation. Input and feedback from end-customers must take place early and often; what may matter most to your product teams may not have the same importance to your customers. Early on, the most important question to ask yourself is, “Why would someone pay money for that?” This feedback process can ensure customer satisfaction and future success.

While transforming a process, project, or an organization, the key is to keep people at the top of the priority list. The human component has become a secondary focus in far too many cases.By prioritizing people and properly approaching change management, the best environment for a successful transformation is created, both on a human and technology level.

Alwyn Joseph currently serves as Chief Revenue Officer at FPT Software Americas. In this role, he is responsible for leading the P&L and driving significant growth in revenue, profits, capabilities, and people. Under his leadership, his cross-functional teams have successfully built businesses and markets from scratch into multimillion-dollar portfolios. Prior to joining FPT, he held several managerial positions at leading technology firms, including ITC Infotech and Tata Consultancy Services (TCS).