7 Techniques for Successful Digital Transformation Initiatives

Successful transformation initiatives driven by business goals and enabled by technology can realize massive competitive advantages to organizations. Unfortunately, these large IT initiatives also have notoriously high failure rates and unexpected cost overruns. The larger the initiative, the more likely it is to fail, and to fail big. Other IT initiatives reach system launch but fail to realize expected long term benefits. Many factors contribute to these failures: lack of focus on business objectives, poorly defined requirements, bad technology fit, inadequate funding, execution mistakes, and inexperienced teams to name a few.
Over more than 15 years, I have assisted organizations in many industries through large disruptive change management initiatives, both as a consulting leader for software companies and as a management and strategy consultant. What I’ve learned is that there are seven key techniques for successful technology-enabled transformation initiatives.

1. Establish project governance and stakeholder engagement. Game-changing IT initiatives exist for the benefit of the business. Those that are successful have strong sponsorship from both IT and business leadership with named sponsorship by leadership from each organization from the outset. Impacted stakeholders within the business and IT need to be identified and managed from project inception through production launch.

2. Implement incrementally. A frequent source of failure is the “big bang” approach where an organization attempts to implement a large change initiative at once. This approach has many disadvantages: Stakeholders have to provide requirements upfront, often before they understand the impact of the initiative; system changes are more extensive after the initial development and, therefore, more expensive; stakeholders are often not involved in the implementation process after initial requirements and, as a result, have little time to prepare for how it will impact their jobs and so may be resistant. Finally, the organization must make the full financial investment upfront before understanding if the initiative will succeed.

In contrast, initiatives that implement and launch incrementally see higher success rates and lower barriers to end-user adoption. Also, incremental implementation allows the organization to invest a smaller amount upfront and measure return on investment incrementally. Incremental releases that steadily add functionality will result in business practice changes that end users can adjust to while continuing to run the business.

3. Launch a production system early. The first increment implemented should be scoped as a minimum viable product (MVP). That is, the smallest scope possible that can be launched into production, provide ROI, and enable feedback from key stakeholders. Typically, this is done by focusing on high value with low-to-medium complexity functionality.

4. Encourage your team to learn and adopt the new technology, but not at the cost of progress. New technologies require learning from technical and business staff. Developers, testers, and administrators need to come up to speed on the technology. Business analysts, business sponsors, and end users need to understand what the technology can support. All roles become more effective with real world experience.

Leveraging outside expertise for the initial production launch of an MVP-scoped project reduces risk, shortens timelines, decreases long-term costs, and provides mentorship and guidance for in-house resources. After the initial launch, both IT and business stakeholders have a better understanding of technology capabilities and options as well as applied experience.

When past the initial launch, individuals who are natural early adopters, open to change, and well respected internally should be brought into the initiative. They are more likely to be successful adopting the new technology and approaches and can act as change agents within the organization. If the early adopter is hard to identify, create an environment where being selected to learn and adopt the new technology is a reward and an opportunity to get ahead in the organization. One way to sell it is to show why the transformation is needed, its value to the business and the strategic opportunity. The training and ramp approach should also be incremental rather than “big bang.”

5. Show incremental results to create the illusion and reality of momentum. Momentum is critical. How stakeholders feel about the initiative can impact success or failure. Leveraging an agile development methodology can help establish momentum. For example, production releases may be done on a quarterly basis while key stakeholders see progress demos every few weeks. These demos can solicit valuable feedback, ensuring the right functionality is built. It is much easier for end users to see a demonstration and explain if it looks or feels right than it is for them to review written requirements. Also, small corrections made during incremental implementation are easier, cheaper, and faster than after full implementation. You will also gain the confidence of the end user community that the solution will fit their needs. Finally, keep to the established cadence if possible. Varying from that creates real and perceived negative momentum, which can work against success.

6. Plan for inevitable delays – and build agility into your planning. All large change initiatives hit snags or delays you won’t anticipate. Since momentum is essential, address dependencies in parallel. That way, when delays are incurred with one dependency, you progress on other fronts. If hardware won’t be available for two months, start other project aspects. Be creative. You probably cannot go live without production hardware, but you can simulate a go live (or “soft launch”) using alternate hardware, Also, avoid stopping and starting projects. Dependency delays are often seen as reasons to avoid cost overruns or to better prepare the organization. Yet the cost incurred by stops and starts is often poorly understood. Stops and starts may also be seen by business stakeholders as an indication of trouble and delayed ROI. This reduces stakeholder confidence and may cause additional change management and adoption barriers when projects restart. There are also costs and risks associated with ramping staff up and down. Overall, stopping and starting large transformation initiatives rarely realize intended benefits.

7. Prioritize organizational change management and end user adoption. Pay as much attention to communicating to and engaging with stakeholders and end users as you do on requirements and technical execution. Systems are only successful when deployed, adopted, and generating business value.

Following these techniques creates natural tools to lead stakeholders through the learning continuum of awareness, education, and training. The ability to make incremental adjustments based on critical stakeholder feedback ensures end user adoption while reducing costs compared to revisions made on top of systems build and rolled out as one implementation cycle.

Large transformation initiatives happen infrequently within most organizations. Business and technology leaders acting as change agents may struggle to differentiate between “normal” and “expected” delays and challenges versus identifying when a project is really in trouble. Approaching your initiative using these techniques will help create natural project checkpoints, stakeholder feedback loops, and system adjustments.

Julie Furt is Senior Vice President, Global Consulting & Training Services for MarkLogic.