DIY Digital Transformation- What could go wrong?

Digital transformation is a term that has been thrown around a lot lately, so let's define what digital transformation really is. According to strategic consulting giant McKinsey, digital transformation is the fundamental rewiring of how an organization operates.

"The goal of a digital transformation, as outlined in the new McKinsey book Rewired: A McKinsey Guide to Outcompeting in the Age of Digital and AI (Wiley, June 20, 2023), should be to build a competitive advantage by continuously deploying technology at scale to improve customer experience and lower costs."

This seems pretty straight forward right? So, why couldn't you just rewire your organization by yourself?

Why could a DIY Digital Transformation go wrong?

You could. But, where digital transformations get tricky for many companies is in the following areas:

• Their lack of a comprehensive transformation roadmap
• Their limited knowledge of the application landscape
• Their lack of experienced deployment expertise
• Their failure to acknowledge the term "continuously"
• Their focus on technology while underestimating the people side of the equation

No Roadmap

Effective digital transformation requires the alignment of a firm's strategic objectives with a comprehensive enterprise-wide assessment of the functionality needed to deliver those objectives. Once the functionality is determined, a roadmap can be developed to guide the deployment of the necessary processes and technology. Many companies embark upon their digital transformation journeys by deploying solutions that are not aligned with their overall strategy. Lacking a well thought out digitization approach, the deployment of a solid, competitive solution in one area might well limit the options available to address a competitive weakness in another.

Limited Knowledge

Knowledge of the application landscape is a key component in the formation of one's digital roadmap. Certain applications integrate well and complement others. Given the fact that effective digital transformation requires data synchronization and accessibility across the enterprise, the selection of applications and tools needs to occur with the big picture in mind. It is not unusual to come across organizations with entities that have purchased two different tools that each serve the same purpose, with neither group aware of the capabilities of the other's tool. This approach to digitization can be costly, redundant, and an impediment to overall transformation success.

Lack of Experience

Even after the completion of a thoughtful application selection process, the successful deployment of enterprise applications across a medium to large company is an extremely difficult task. According to Gartner, 55-75% of ERP projects either fail or do not meet their intended objectives. Common issues include:

• Inaccurate requirements
• Lack of leadership commitment
• Insufficient resources
• Bad data
• Over-customization
• Lack of testing
• Under appreciation of the role of change management

Given this long list of potential points of failure, any one of which can sink a project, one would think that any firm attempting to do this on their own, without experienced resources, is asking for trouble.

Failure to Acknowledge "Continuously"

Many companies struggle with the notion of ongoing continuous improvement. As the definition explains, the goal of digital transformation is to build a competitive advantage by evaluating your current processes and continuously deploying technology to improve the customer experience and reduce cost. We have witnessed firms that deployed technology, created competitive advantage, then for any number of reasons failed to maintain that advantage. This can be due to management changes, unwillingness to sustain investments in capital and/or resources or simply the failure to accept the fact that you are either moving forward or you are losing ground.

Underestimation of the People Factor

Last, but not least, companies underestimate the impact that digital transformation has on their associates. Effective digital transformation requires rethinking the way work is performed. Many traditional tasks are completely eliminated, others are drastically changed, and many new processes are introduced. Each of these events create disruptions in the way people have done their jobs, requiring them to adapt and accept new roles and responsibilities. 

Organizational Change Management (OCM) is the approach utilized to address the human resource impact of digital transformation. Companies that fail to take OCM seriously struggle to get associate "buy in" and adoption to the new tools and processes. Employee acceptance is the number one reason that many digital transformation initiatives fail to deliver the intended results. However, Prosci's research "shows that initiatives with excellent change management are seven times more likely to meet objectives than those with poor change management."

Still considering doing it yourself?

As you can see, there is nothing stopping you from running out, purchasing some software, and starting your DIY digital transformation. If you are willing to bet your career that you have sufficient expertise to address all five areas described above, have at it! If not, there are digital transformation consultants available to you in your journey. 

Don't want to DIY? Connect with us to schedule your complimentary consultation today. 

Tony Young is a RubinBrown Service Delivery Manager who is renowned for his expertise in digital transformation strategy. Keep up with him on LinkedIn.