March 24, 2021 • 4 min read
Digital transformation: how to avoid the most common mistakes
What are the most common digital transformation mistakes? And how can you avoid making them?
John Pillay, Director – Strategic Transformation, talked with experts and peers across multiple industries about the top three digital transformation mistakes they’re seeing – and how to avoid them – to help speed up your digital transformation journey.
“Many executives are learning that digital transformation is harder to pull off than a typical change program,” says Pillay. “Digital is always on the move, which can get overwhelming. This makes it even more important to get the basics right, rather than overcomplicating an already difficult transition.”
Mistake 1: Forgetting who the technology is for
Companies are still overinvesting in technology and underinvesting in change management and communications.
Blockchain. Machine learning. Robotics. All can offer significant benefits. But if we don’t invest in change management and communications, employees don’t know what’s going on. New technologies aren’t adopted and the changes don’t stick.
How to avoid this
“This is a familiar pattern and one that’s seen across multiple industries. But it keeps happening,” says Pillay. His advice? Involve the people who will use the technology from the start and listen to their feedback.
“When we first started its digital transformation journey, we made this mistake, too,” says Pillay. “We implemented technology that made five people’s jobs easier and 5,000 people’s jobs harder. We have learned that digital transformation needs to work with the company rather than against it. Challenge your assumptions, think carefully about unintended consequences and work hard on engagement.”
Pillay also advocates for a ‘purpose-led transformation’ approach.
“Start by asking ‘why does the world need our company?’. Use that to map out the future and the role you play in it. This creates a conversation around how people can influence the transformation at a personal level and connect them to the bigger picture.”
The biggest problem in digital adoption is failure to address the people aspect of digital.
Digital Transformation Expert, Finance
Mistake 2: Not having the basics in place
Digital needs data. However, data quality and data management fundamentals are often bypassed. Many companies get distracted without having the basics in place. Instead, they focus on eye-catching dashboards and artificial intelligence use cases. These initiatives have limited impact if the data is inconsistent, and if data sources can’t be identified and brought together.
How to avoid this
“Conduct a data audit of your organization and establish an agreed strategy for data,” says Pillay. “Get a clear and honest picture of the current state of your organization. If it isn’t good enough for what you need, then invest in building a data infrastructure that’s fit for purpose and can support advanced data uses like artificial intelligence and machine learning.”
But, building an integrated data platform can take years to do. “We’ve seen customers recognize that their asset data is poorly organized. They become overwhelmed by the perceived effort to fix it, so they don’t get started at all,” explains Pillay. “That’s why a released based, incremental build-out works well. Start small, but always with the bigger goal in mind.”
Rather than ensuring the underpinning data platforms are aligned, many companies see digital as a website or some cool technology.
Digital Transformation Expert, Banking
Mistake 3: Creating the illusion of digital
Digital transformation programs often create an illusion of digital progress. But nothing meaningful has changed in the core business.
A common trend is for organizations to create their own digital laboratory – or even a separate corporate entity to experiment with the latest technology and show the core business how ‘digital’ is done. Though, it rarely works out that way. They’re often disconnected from the business. They refuse to scale and rarely offer insights beyond what you already know.
How to avoid this
Pillay warns to not get too caught up in the ‘theatre’ of digital.
“Start your digital transformation program by mapping out your central business processes. Then, identify how digital technology can improve these processes or remove them completely. That’s where the real impact of your digital dollar lies.
“The connection between the digital business and the rest of the organization needs to be strong and well maintained, unless you’re giving up on your core business,” he adds. “Have innovation incubators but set specific targets and key performance indicators for integration – and make sure the digital team sticks to them.”
Digital isn’t just a channel for potential new business. It’s also a mindset about how business is done. It’s both culture and business transformation for the organization as a whole.
Digital Transformation Expert, Management Consulting
Don't be afraid to fail. But fail fast
The pace of change is accelerating as more businesses embark on their digital transformation journeys. Given the scale of the challenge, it’s inevitable that mistakes will be made along the way. But by getting the fundamentals right and following a clear roadmap that’s tailored to your business, you can reap the benefits of digital.