A summary of the top challenges leaders face when implementing DX projects.
Encanvas and its partners around the world have been implementing digital transformation projects for over a decade. In that time we’ve seen as many projects successes as failures. It isn’t easy to make transformation projects a success – and rarely is a technology the problem, though its shortcomings often show through. In this article, we re-visit the learning lessons of a decade of real-world experiences in this summary of the 10 most painful learning lessons.
- Measuring success before the first line of code is produced – It’s a tricky issue, but how do you determine the return-on-investment (RoI) on software developments when you haven’t created them yet? Without a clear RoI it can be an uphill struggle for business managers to gain support for inventive projects so being able to quickly form an appreciation on the likely return can be a make or break issue. Many projects will stall even before they get started because business managers with big ideas will lack the evidence to prove their worth.
- Balancing the rewards of contributors/beneficiaries – When projects are set to change business models the likelihood is that more than one business area will be involved. An awkward dynamic occurs when one business area needs to put proportionately more of the time, effort and investment into a business transformation initiative when another part of the business is set to reap proportionately more of the rewards. This can create, at best, a need for very sound project management and strong leadership and, at worst, can compromise the success of a project.
- Overcoming the corrupting impact of cultural/data silos – The corrupting influence of silos of operation and silos of data is never too far beneath the surface when it comes to change projects. The impact of silos is best described by Dr Eli Goldratt’s Theory of Constraints which states the core constraint of virtually every organization is that organizations are structured, measured and managed in parts, rather than as a whole. This results in lower-than-expected performance, difficulties securing or maintaining a strategic advantage in the marketplace, financial hardships, seemingly constant fire-fighting, customer service expectations were rarely met, the constraint constantly shifting from one place to another and chronic conflicts between people representing different parts of the organization. When leaders put their energies into creatively re-inventing business models, tackling data silos is something that needs to be dealt with head-on.
- Data integrity–when data is reused, it’s often sub-optimal – You may think your financial accounting, customer relationship management or enterprise resource planning software is brimming with useful data that’s ready to be reused for the new uses you’ve in mind for it. But experience says you’ll probably be disappointed. When digital transformation teams get to work building new ways of making data useful, more often than not the quality and integrity of data comes up short. Overcoming this problem could be as simple as a transform activity, or referencing a third party source of ‘good quality data’ to enrich the existing data entities, though the worst case can be nothing less than life threatening to projects. Sometimes, digital transformation projects are halted in their tracks by poor quality data that puts the desired project outcome out of reach because of time, the investment required or technical complexity.
- Skills–DX ideology is at odds with conventional IT mindset – List out the technical skills-sets required for your digital transformations such as project management, business intelligence, programming, mapping, analytics, data modelling (etc.) and it might sound like a familiar list. You’d maybe think, with a little stretching, your existing teams have the necessary skills needed to meet these new demands. Okay, the tools and technologies are new, but how different can it be… right? Wrong! Digital transformation projects are characteristically at odds with traditional IT methods, tools and approaches. You need people that ‘think and act differently’; that want to take risks and try things out; that have more of a knowledge and interest in how business, organizations and processes work; that are outcomes focused; people that want to talk to users and stakeholders because they find it rewarding. Almost all the activities that behind-the-desk coders hate doing will be cat-nip to digital transformers. The good news is that you probably will have much of the talent in your business that you need; it’s just not where you’d expect it to be. Bear in mind that you will need fewer coders and more soft skills, planners and creative thinkers for what you’re about to do and you might well find these competencies in project management and analyst teams, in finance, marketing, R&D or HR departments that are more accustomed to change programmes and cross-organizational projects focused towards business outcomes.
- Adopting tools/methods to make change affordable – Organizations that try to use their existing development approaches and tools to fulfil digital transformation projects are going to come unstuck with the economic challenges they face. Simply put, the need for rapid time to market, fast integration and early stage quick-win results means that the old ways just don’t cut it. Even the activity of programming has to be questioned in a rapid, agile development environment. It creates a divide between technology people that ‘get it’ and the mass of users and stakeholders that are instantly turned off when they see a line of code. Digital transformation projects are an awkward mix of needing to get things done quickly whilst not compromising on the end result. The resulting applications must still meet in full the enterprise IT hygiene factors that businesses expect.
- Discovery/displacement of incumbent shadow systems – Sometimes developments of innovative solutions can uncover those systems that small teams and individuals have built themselves by necessity to overcome the business challenges they have encountered. Many of these systems are not on the radar of IT or those individuals driving new spotlight digital transformation projects. It’s not surprising that those people that have invested time in these shadow systems feel somewhat aggrieved when their work is discounted for a trophy project with not even a thank you. Project teams can trample through these shadow systems unknowingly building up a storm of resentment and positive disengagement.
- Over-engineering of project scope and applications – It’s easy to try to deliver the best possible solution when ‘good’ will do. Sometimes, delivering a simple, adequate system is the best first outcome. Then you can develop more features and capabilities to bring more value to stakeholders. As projects progress it’s not uncommon for project teams, users and stakeholders to learn from first-build model solutions and come up with better ways of solving problems, new features and capabilities. This type of scope-creep can lead to short-term objectives being missed eventually resulting in a loss of faith and project failure.
- Inter-departmental bias and BX versus DX conflicts – Parachute-in a high profile technology-centric team with a strong leader into an organization with an existing IT department it’s hardly surprising that you’re going to have to put out some fires and smooth over a few ruffles. Balancing two-speed IT means having an internal IT teams focused on reducing costs and improving process efficiencies through Business Transformation (BX) and a DevOps team re-inventing business models through Digital Transformation (DX) in tandem. Recognizing each team for its own skills and contributions to business outcomes and balancing praise is going to be important for a healthy culture.
- Denial of the need for a bimodal approach – Many digital resistors will have internal forces arguing the case for the status quo, normally with the argument, ‘We’ve worked like this for years and we’ve never needed another team’. Denial of the need for a bimodal approach can often be supplemented by a lack of understanding in management tiers of the possibilities of digital technologies and how they are changing our world. This makes it all too easy for incumbent disruptors to underplay the impact of digital technologies and the need for change.
And that’s our top 10! They aren’t in order. The level of potential impact will vary according to the type of project. On publishing this list we do hope it doesn’t put you off. There are far more project successes than failures; and you are ever more likely to be succeed if you manage these challenges.