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Four key requirements for digital transformation project success 
Up to 84% of digital transformation projects fail to deliver their expected benefits. This equates to colossal missing ROI, as well as the collateral damage to business strategy, shareholder value and team morale – according to a report from Forbes in 2019 "Where-businesses-go-wrong-with-digital-transformation"
Why does this failure happen?
Forbes identify four key points that are usually found in these failed projects.
- A lack of clear strategy
- Uninspiring leadership
- Resistance to change
- Focussing too much on the launch rather than on the longer term, project lifetime timeframe
I see an additional common factor, which is a lack of understanding in how to achieve success with the project. It may be this lack of understanding that underpins the other four reasons given by Forbes.
To me, this lack of understanding is most effectively overcome by boosting the education. Education, and especially training, is usually including in the early stage planning of the project. However, the focus is often end-user training. While end-user training is a very important part of your digital transformation success, it is not the only education required. I discuss the three types of education essential for CRM and digital transformation success in "The Keystone to CRM Success" .
The linking factor in these four points that Forbes highlight, which many organisations overlook, is the involvement of human emotions in the decision making and hence the engagement with the transformation activities.
So, conversely, to achieve success, we must ensure:
- A clear strategy
- Inspirational leadership
- Support and education so the change happens
- Longer term vision
The lack of clear strategy, which may be amplified by constant switching in direction which will lead to confusion, just leaves the end users, the people who will ultimately perform the desired change – or not – rudderless, so they will lose confidence.
A good digital transformation strategy will comprise:
- The project’s mission – what is the high-level aim of the project
- The project’s vision – where do we want the project to get us
- Goals of the project – What we must achieve to claim success
- Objectives – specifics that underpin the goals
- Activities – the actions that enable achievement of the objectives
- Measures – the key performance indicators that will show when we have achieved success
- Outcomes – what we will see when we achieve success
Uninspiring leaders do untold damage in an organisation. They destroy engagement and increase turnover of their direct reports. Both of these are hugely damaging to your digital transformation project. Another Forbes article "The shocking statistics behind uninspiring leaders" goes into detail about the effect of a uninspiring leader on an organisation.
While it is easy to talk about the effects of uninspiring leaders and uninspiring leadership, it is far harder to give a recipe for inspiring leaders and inspiring leadership for your dgital transformation project. However, one ingredient that certainly will be there is strong communication skills marinaded in an understanding of:
- The business
- The technology
- The methodology of successful projects.
Once you have leaders able to explain effectively both the why, including benefits to the organisation at all levels and the how of the change, you are well on your way to project success. This can only be achieved by education to bring all key people up to speed with all three necessary areas of understanding. Many organisations believe that splitting this understanding across several people will work. However in my thirty years of helping organisations overcome this sort of challenges, I see this splitting out leading to a situation more like this.
The involved people are sending out their messages, but nothing is being received, because each lacks the basic understanding and vocabularly of the other.
In an article published in 2020, https://wendyhirsch.com/blog/overcoming-change-resistance Wendy Hirsch showed how people can respond to change. She identified four possible emotional responses to change:
- Disengagement
- Resistance
- Acceptance
- Proactivity
Tom Peters and Robert H. Waterman used the term “management by walking around” in their 1982 book In Search of Excellence: Lessons from America's Best-Run Companies. Management by walking around refers to a style of business management which involves managers wandering around, in an unstructured manner, through the workplace(s), at random, to check-in with employees or on the status of ongoing work. Combining this with chatting to staff about the digital transformation project, answering employees questions and soliciting feedback helps massively with change management essential for project success.
These high failure rate numbers are not new, but nor are they are going away.
In 2017, a report in CIO magazine averaged a dozen analyst reports. The numbers ranged from 18% to 69% of digital transformation projects failing. Those failures can mean a lot of things — over-budget, data integrity issues, technology limitations, and so forth. But in my work with clients, when I ask executives if the CRM system is helping their business to grow, the failure rate is closer to 90%.
These reports transcend the introduction of Agile, as a way of delivering projects, and Microsoft Power Platform. It is likely that neither of these evolutions have changed the numbers significantly.
A survey done by C5 Insight in 2015 pulled together a number of other surveys looking at failure rates between 2001 and 2013.
The reasons given for these failures are shown in the chart below
In my opening for my presentation in 2021 for Digital4Europe, I said "Rome is the place where a civilisation comes to an end – the place where an empire falls over – the place where the dark ages began. You don’t want to go there!!! My presentation used All Roads lead to Rome as a metaphor for whatever overt reasons you have for a CRM project failing to deliver as expected, the foundational reason will be a lack of understanding.
So, if you want to achieve a successful digital transformation, you need to
- Create and communicate a clear strategy for your digital transformation success
- Foster inspirational leadership
- Support and educate people at all levels of the organisation so the change happens
- Speak about and spread a longer term vision
To achieve that, you will need to have an educational program running throughout the project. This educational program will include training courses, but it will also probably require open ask-me-anything sessions, a newsletter and other less time-demanding ways of boosting the understanding of all areas of the project throughout the organisation.
References
https://www.cio.com/article/288664/what-to-do-when-your-crm-project-fails.html
https://www.forbes.com/sites/phillewis1/2019/07/31/where-businesses-go-wrong-with-digital-transformation
https://wendyhirsch.com/blog/overcoming-change-resistance
https://www.opsis.com.au/resources/blog/the-keystone-to-crm-success
