We’re sure you have heard of the horror stories of digital projects and initiatives that have gone bad. All of which demonstrate the lack of an effective and ethical digital transformation framework to guide delivery.
Three examples:
- The $7 Million payroll system upgrade at the Queensland Department of Health cost taxpayers $1.2 Billion.
- The data breach at Optus, whereby 10 Million current and former customers had personal details stolen in a hack.
- The Australian Federal Government RoboDebt scheme is a shocking example of the abuse of data and digital technologies by the Australian Federal Government. It provides another example of misuse of powerful data-driven Technology leading to the loss of lives.
There are countless similar examples across organisations of all types and sizes.
To summarise, public and private organisations are squandering undisclosed billions of dollars in resources and effort yearly. The reasons are uncovered below.
Key reasons why Digital Transformation Initiatives Fail
There are several reasons why Digital Transformation initiatives fall short of expectations:
Lack of Clear Strategy
One key factor is the need for a ell-defined and communicated Digital Transformation Strategy. Without a clear vision, goals, and roadmap, projects can lack direction and struggle to deliver meaningful outcomes.
Organisational Culture and Change Resistance
Cultural resistance to change within organisations can hinder Digital Transformation efforts. Projects encounter roadblocks if there is resistance from employees, inadequate change management practices, or a lack of buy-in from key stakeholders. They get bogged down into meetings that achieve nothing and systems that deliver the same poor experiences and inefficiencies as the Technology and process the new system was meant to replace.
Insufficient Leadership and Governance
Without solid executive support, dedicated resources, and effective project management, projects struggle to overcome challenges and achieve their intended outcomes. When Executive Teams are unclear or contradictory in their vision for the transformation initiative, teams cannot find the collaboration and learning essential for innovation. Without a practical Digital Transformation framework and strategy, people across the organisation tend to make decisions based on perceived risks and personal loss. Politics drives decision-making rather than a clear purpose for the benefit of the customer or other intended end-user.
Skill Gaps and Talent Shortage
Digital Transformation often requires a skilled workforce with expertise in emerging technologies. If organisations lack the necessary talent or do not invest in upskilling and reskilling initiatives, projects may face difficulties in execution.
Technological and Integration Challenges
Implementing and integrating new digital technologies with existing systems can be complex and challenging. Incompatibility issues, data security concerns, and technical hurdles may arise, leading to delays or suboptimal outcomes. The lack of a clear Digital Transformation Framework leads to systems that are hard to maintain and expensive to operate.
Unrealistic Expectations and Scope Creep
Setting unrealistic expectations or expanding project scope beyond manageable limits can lead to project failures. Executive Leaders and Team Managers must set realistic goals, prioritise initiatives, and iterate based on feedback; results are critical to successful execution.
Factors of an effective Digital Transformation Framework
In 2020, the Boston Consulting Group (BCG) published its Flipping the Odds of Digital Transformation Success report. This study looked into 70 BCG-supported projects, supplemented by a survey of 825 executives working in the field. They found six critical success factors are key to success in digital transformation.
An Integrated Strategy with Clear Transformation Goals
Knowing why you’re here and having a clear goal for what you’re trying to achieve is critical for any Digital Transformation Initiative. A team must have a common goal to work effectively together. I like live sports. My sports team is the Sydney Swans in the Australian Football League. As with all professional sports teams, they have a clear goal – win the premiership. This goal is definite; everybody understands what it means and why it is essential. The goal defines success, failure and what it means to learn and get better. Without clear goals and strategy, people will make the project about them. Initiatives get bogged down in politics and resistance to change. No shared goal means no shared outcome. Strategy and goals define your Purpose. It is why you exist and why Purpose is central to the AGContext digital transformation framework.
Leadership Commitment from the CEO through Middle Management
I once worked in a large government organisation that was upgrading its content management system. This agency operated nine websites, each with a different target customer and technology platform.
- The Chief Marketing Officer(CMO) believed that the agency was wasting money and time with all multiple platforms and commissioned an initiative to replace each system with a single ‘market leading’ platform (read: very expensive and technically advanced).
- The Chief Executive Officer (CEO), concerned with staff wellbeing, was very sensitive to process changes created by the upgrade and emphasised minimising the impact on people.
- The Chief Financial and Information Officers needed to cut 30% of the IT budget. Money and resources were minimal.
In this example, the Executive Leadership Team were at odds with each other. Together they wanted the most advanced Technology, a seamless process, a budget spend and an immediate timeline.
They had no Digital Transformation Framework in which they could validate their assumptions and see the contradictory nature of their requirements.
As a result, the project spent $3.7 million. It delivered nothing but a dysfunctional Minimal Viable Product (MVP) that produced websites far uglier and harder to use than the predecessors, and nobody knew how to use them.
Clear commitment and visionary leadership from the CEO and the Executive Leadership are critical for ensuring that middle management and staff’s ‘organisational immune systems’ overcome their resistance to change.
Deploying High-Calibre Talent
Digital Transformation is upgrading how your organisation manages information flow. It means you need people who know how to design, build, and test the information technology you need to deliver the information flow that is the source of value in your business. You also need people who know how to manage a team responsible for this work. These are not skills that are easily and readily available in the marketplace. It takes years of training, practice and learning to become skilled in the methods and arts of Digital Transformation.
I especially want to mention the importance of high-quality and International Institute of Business Analysis (IIBA)-certified business analysts in Digital Transformation initiatives. Business Analysts are trained across various Digital Transformation frameworks, methods and skills for understanding business processes, designing and evaluating systems and monitoring progress.
The IIBA’s Being Nimble Report outlines how business analysis is a critical skill in organisations about to respond to the pace of change. Business analysis is essential for ensuring ideas are viable, align with strategy and are implemented in a way that creates learning and value.
More generally, Digital Transformation requires people with various technical and managerial skills, which is why the AGContext Digital Transformation Framework includes People as one of the corner pillars.
An Agile Governance Mindset that Drives Broader Adoption
What makes Digital Transformation interesting is that every single project is unique. The thing you are trying to do, in the way you are trying to do it, has never been done before. Not exactly. You are unique, and thus so is your Digital Transformation Initiative. You have your Purpose, Technology and People. Your processes and ways of working will be different in many ways from anybody else. What is fit-for-purpose for you will only be so for yourself. If this were not the case, you wouldn’t need to change, which is why Digital Transformation is learning in action. It’s a process of experimentation.
The new methods of Product Ownership and Agile Delivery are critical because they empower learning and support long-term investment focused on quality and outcome rather than budget and dates. This shift in mindset will enable you and your teams to see the bigger picture and realise the benefit of learning your way to successful implementation.
The Digital Transformation Framework you use to define your strategy and guide your project must reflect this reality. If not, failure is all but assured.
Effective Monitoring of Progress Towards Defined Outcomes
Accountability is crucial to success in Digital Transformation. Learning is all about getting better and knowing if you are making progress. For this, you need to be able to monitor and respond to the lessons you learn along your journey of Transformation. The AGContext Digital Transformation Framework provides the lens for effectively monitoring an initiative.
Accountability in this context doesn’t pertain to achieving deliverables and milestones but responding to the lessons effectively and confidently. Development teams are held accountable for the functions they build—managers for the performance of teams. Executives are responsible for removing barriers, overseeing governance outcomes, mitigating internal resistance, and empowering organisational change. Accountability focuses on empowering action about leaning into the opportunity that Digital Transformation of your products and services offers for both people and the planet.
Business-led modular Technology and Data Platform
Information technology is like Lego®. Information technology comes in all shapes and sizes, each piece designed with a specific purpose. People with the right skills, time and resources can build anything you like. Also, like a Lego® product, an information system in your business comprises many layers. For any information system in any given context, there are computers, mobile devices, software platforms, files, documents, data sources, and many others. Each component is a platform upon which the information flows to create something valuable for your intended Purpose. This is true for your financial system, customer management system, or your point of sale system.
The modular nature of information technology is also a critical reason why professional business analysis and solution architecture are vital to your success in Digital Transformation.
The Bionic Roadmap by Boston Consulting Group
In the ‘Flip the odds’ report, the authors from BCG club these six fundamental factors for success into a ‘Bionic Roadmap’. They point towards a new Digital Transformation Framework that describes the business as a combination of People, Technology and Process-driven outcomes that work together under a common strategy and for a common purpose.
I’m no fan of the term Bionic. It’s just another fad term these big consulting firms dreamed up to separate themselves in the marketplace. It also reminds me of the 70s TV show The Six Million Dollar Man.
Most of all, Bionic doesn’t reflect what is happening here. The combination of Technology, Human, Outcomes and Purpose is not new. It’s been the case for how organisations create value forever. It’s just that each of the components has changed over time. It is the rate of change that is moving so far that has made clear this observation of the reality of how organisations create value.
The infographic below expresses the roadmap. BCG groups the six lessons into four broad areas: Human, Technology, Outcomes and Purpose/Strategy.
The Bionic Roadmap by BCG is a helpful Digital Transformation Framework but needs more critical insights. To help make this clear, we need to change some of the language.
Platforms, People and Process Aligned with Purpose
Human talks to the talent and the organisation, which means your Executives, Managers, Teams, Employees, Contractors, Vendors, and Everyone is involved in the Transformation initiative.
Let’s rename Human = People.
Technology is all of the computers, software and the data they contain. As described above, information technology is built in layers, often called Platforms.
Let’s rename Technology = Platforms.
Strategy and Purpose is the clear, concise and coordinated reason why you are undergoing your transformation initiative in the first place.
Let’s Drop the Strategy and call this centerpiece Purpose.
According to the authors, outcomes speak to the business’s operations, governing projects, and operating the customer experiences and business models. Your customer experience is the result of a customer experience process. A business’s offers, products and services are a result of the business’s processes for creating that value. My training and experience as a business analyst tell me that these are all different types of Processes.
Let’s rename Outcomes = Process.
This gives us an updated framework that looks something like this.
Now we can see the secret key that unlocks success in Digital Transformation.
The Digital Transformation Framework from AGContext
The key to Digital Transformation is surmised in this simple sentence:
People, Platform and Process aligned with Purpose.
This is the Iron Triangle of Digital Transformation! Change one, and you must change the others.
This begins with people who choose the purpose for the information flow that they seek to transform. So with this in mind, we switch People and Process areas, from the Boston Consulting Group model.
The resulting iron triangle is the foundation of the AGContext Digital Transformation Framework. It is the key to unlocking Digital Transformation success in any context.
To be successful in Digital Transformation, you need to ensure that your people are operating in line with the capabilities of the technology that contains your information. Your strategy must ensure that your technologies align with the capability of your people.
The same goes for your business processes. If you have ineffective processes for managing your technology, you create gaps that hackers can use to steal your data, just like what happened to Optus.
Each of these pillars must align with a purpose for enabling people to take action. Primarily to provide an information flow that is reliable, consistent, and useful for making decisions.
Begin Your Journey To Success
Do you want to know how to use the AGContext Digital Transformation Framework to create easy to services, and improve the reliability and resilience of your business?
IF so, a Digital Transformation Strategy by AGContext is exactly what you need.
