There is a lot of focus currently in the industry on Digital Transformation and Digital Workplace initiatives. As new and compelling features increasingly become common and innovative technology advancements get introduced at a rapid pace, most enterprises are forced to rethink their business model, existing solution capabilities and technology stack. In-spite of huge investments and effort from IT division or business, still majority of these initiatives fail to achieve their intended ROI.

This blog is intended to share some of the common approaches followed by enterprises to execute a Digital Transformation engagement which can lead to failure. Only sample scenarios are picked up for clarifying on how not to approach a digital transformation engagement.

Scenario 1
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Title: Technology adoption driving Digital Transformation

Overview: Enterprise wants to define and build the next generation platform to meet digital transformation needs by setting up Mobility CoE/Work Group, Cloud CoE/WorkGroup, Big Data CoE/Workgroup etc.

Problems in this approach:

• Digital Transformation is about using digital technology to address current and future needs. Technology only assists in achieving the goal. Defining the technology first is never the right approach for digital transformation. The Digital first approach, of making the solution as digital as possible should be backed by a strong business opportunity, and a problem that it will address.
• When the focus is on technologies to build a specific platform, the resulting solution will be something that most of the business groups are not willing to adopt and has very little chance of generating a reasonable return on investment.
• Technology is changing at a rapid pace. It is not realistic to expect a solution developed today, to be the best suited solution after couple of years unless it is modified to accommodate the enhancements in technology. So, focus of business outcomes and business roadmap, and then use technology to meet the business goals.

Scenario 2
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Title: Lack of Collaboration between internal teams in IT for executing the Digital Transformation

Overview: A group in the enterprise believes they are lagging in technology adoption and decides to run an initiative for digital transformation. This can be a team deciding to do something on external cloud without proper pipeline or a team deciding to introduce mobility without a customer base or something along similar lines, taken up by a team/group in enterprise.

Problems in this approach:

• Digital transformation is not an initiative to be executed in silo for a specific technology. It is quite common to see that many enterprises run separate Cloud or Mobility initiatives without communication with each other. A mobility app could be the best use case from process and security perspective to experiment a cloud initiative. The lesser the interaction, the higher the chances of failure. Having a Mobility CoE or Big Data CoE is good, but it should be a sub group under a bigger transformation program, and not operating in silos. The sub group should have clear goals set and deliverables tracked under the umbrella transformation program.
• The real challenge in most enterprises is not just adoption of new technology. Digital strategy engagements which focus on the challenges and needs of the enterprise will be able to come up with many tasks that improve efficiency, increase revenue and reduce costs. A good example is consolidation: many enterprises have different business groups using different enterprise platforms that do the same task. Like each department might be using a different Content Management Solution from different vendors, different cloud accounts etc. In many cases, the licenses for the third-party vendor products might not even get utilized. With more products in enterprise doing same function, the resources engaged for support also become more, in addition license costs. So getting multiple teams together, becomes significant to run a Digital transformation engagement.

Scenario 3
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Title: Product driving Digital Transformation

Overview: Enterprise has a partnership with a major product vendor, who has already convinced the client to invest in their product. The digital transformation requirement is to build everything that is possible with that SAP, Oracle, Microsoft, etc. product package which has a suite of products and licenses.

Problems in this approach:

• Most IT managers involved in digital transformation/digital workplace projects would have encountered this scenario where they setup a platform and retire it a year later due to lack of adoption or ROI is lesser than cost of maintenance. This happens despite significant spend on licenses. Could be because an internal team prefers the product vendor, or the product vendor pushed for a quick closure of their product sale by offering discounts.
• Technology should help address the challenge. Technology first is not the right approach. Defining a digital transformation strategy around a platform/product is not suggested.
• There is a hidden danger of vendor lock-in. A year later when re-org happens, or enterprise wants to reduce costs or change vendor/product, the associated costs and business impact will be huge.

Scenario 4
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Title: Lack of proper IT-Business Collaboration

Overview: IT wants to build a platform for digital transformation and compel business groups to use it to avoid Shadow IT in business groups.

Problems in this approach:

• Without users to adopt the new enterprise platform and tools, there will be no ROI. IT cannot define a digital transformation program without guidance on the challenges to address, impact on process, etc. from the business groups.
• It is very important to get confirmation from business teams, on their willingness to adopt the changes from a digital transformation initiative. This requires good collaboration between IT and business, and support from senior management.
• There is support from top management and business teams required, to ensure the digital transformation is prioritized. The key stakeholders who would benefit from success of digital transformation should be willing to invest effort, resources, and funds on the digital transformation initiative. To ensure this, the key stakeholders should be engaged in defining the problem statement, goals to be achieved and in the high level decision making process.

Scenario 5
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Title: Defining a Solution before understanding what business problem/challenge to solve

Overview: IT has created a reference architecture using all the tools and platforms they have. It includes all the platforms for Digital enablement. Their only requirement is a decision matrix on how these can be leveraged to perform digital transformation.

Problems in this approach:

• A reference architecture is just a reference. Most reference architectures for digital do not have anything more than a typical enterprise architecture, and in many cases, show the modules encountered in typical solution architecture.
• Even if a Digital stack is defined at a more granular software/hardware asset level, there still will be multiple ways to address a specific business problem.
• Digital transformation should use the software/hardware asset database to identify what to use, what to retire, how to integrate, etc. in driving cost efficiency and scale based on business demands.
• The technology strategy and digital stack should be driven by business requirements and should not be an aggregation of existing platforms/solutions to chose from, as such a solution will not scale to meet current and future needs.

Only five sample scenarios are discussed in this post. The intent was to show how typical approaches followed by enterprises can become a significant cause for failure of Digital transformation initiative. It is critical to ensure Digital transformation is business driven, has support from senior management and is a collaborative effort for making it a success.

I would like to hear back from you.