Some businesses have flawlessly executed their plans - take the UK’s University of Sussex, for example. They expedited their five-year business transformation plan into the space of a week: "A decision was taken that we had to respond to coronavirus and that's led to me trying to then move that five-year roadmap and strategy into a one-week deliverable."
For some, however, the transition has not been so smooth. In a report written by Dion Lisle, it is said that:
- 70% of digital transformations fail (Forbes)
- Of the $1.3 trillion spent on digital transformation in 2018, an estimated $900 billion was wasted when initiatives didn’t meet their goals (Harvard Business Review)
- 61% of banks worldwide are in "digital deadlock" according to IDC research, although nearly 100% of banks acknowledge the need for digital transformation (IDC)
In this article, I want to explore the transformations that encounter roadblocks, understand why some transformations have failed, and spearhead the crucial importance of a data-first approach in this sphere.
Failure is not to be feared
An article from Harvard Business Review reads, “instead of ramping up quickly, only to ramp down painfully, it would be much better if companies can make steady progress toward the right end state without making such costly mistakes.”
Although this piece dates back to 2018, in a time where none of us had the pressures of a global pandemic on our doorsteps, the sentiment still rings true for a 2020 reader.
If digital transformation was not already on a company’s agenda back in March 2020, having the cognitive and business ability to create something entirely new and then set about implementing it can be an understandable struggle. It is not something we would have seen in previous years without the pressures of a pandemic bearing down on us.
With the need for speed, errors will naturally occur, whether in the planning or implementation stages - or even both. In a world full of uncertainty, mishaps are almost a certainty - so what is needed is an agile and flexible mindset, which enables you to maneuver around these obstacles easily.
Keeping your business going - despite hardships - is enough
Take GE, for example. In 2011, they began their digital transformation process and built an IoT platform called GE Digital. It launched in 2015, but there was a huge problem - “the company was simply too large to transform all at once, especially without a true vision of what it was trying to achieve,” Blake Morgan, customer experience futurist, explains.
Despite billions being thrown at the project, the strategic oversight was not strong enough and led the company into a scattergun approach. Maintaining a leader throughout the course of digital transformation is important to ensure there is always someone with an omniscient vision to steer the ship.
As Blake concludes, “digital transformations are often done best with a handful of passionate people leading the charge instead of thousands of employees.”
Data is at your disposal - use it
There is nothing more valuable when it comes to business insights than business data. It is the looking glass into your customer's habits, seasonal trends, and more.
Back in June 2020, I was on the panel for a webinar between Loqate and Rapyd, the world’s largest local payments network. I noted, through data analysis, that there was a:
- 41% spike in digital revenue during the final fifteen days of Q1 2020
- 200% surge on digital spending for essential goods during Q1 2020
- 34% discount rate surge during mid-March 2020.
This data shows the evolution of the customer during the early stages of the pandemic. It was the beginning of what would become less of a trend for 2020 and more of a lifestyle adaptation, as stores closed, and practically everything became available online instead.
Sometimes, even the simplest data can give you the richest insights - and looking at this can show you that the way forward is undoubtedly digital. Analyze your data and then use it to inform your next steps.
Improving customer experience starts from the inside out
Digital transformation is widely cited as something to help the customer, but the transformation must start from the inside out for it to be truly effective. Forbes says: “To meet this [digital transformation] challenge, we must rethink how our teams work together across the enterprise and apply a modern approach to work with new systems and models, enabled by the right tools.”
As I have previously written, ensuring your team is on board is one hurdle, but maintaining a leader throughout the transformation is imperative to the plan’s overall success. This is not to say that the drive should be entirely business and KPI oriented - within this drive must come an empathetic understanding of employee’s concerns.
Digital has been touted as something to take away our jobs - with AI and ML being applied to write articles or file documents more neatly and efficiently than any human ever could. Even now, contactless robots are helping us deliver - employees will undoubtedly have concerns about helping a change that may spell the end of their position with the company.
It is important to keep employee’s concerns front of mind during huge business change. Discontent in teams can disrupt progress, and it is all too common for employees to look at digital transformation as a vulture to swoop in and take away their jobs.
From the very beginning, business leaders must allay any worries and keep employees completely in the picture while digital transformation takes place. This will ensure the entire team, from top to bottom, are on the same page, charging towards the same goal post. In 2019, Wall Street Journal led an article with the headline: "Businesses Predict Digital Transformation to Be the Biggest Risk Factor in 2019". No one saw what 2020 had in store, and remarkable things have happened under great duress.
This year, simply keeping your business afloat is more than enough in terms of progress. Undertaking digital transformations, with or without the pressures of a pandemic, is a tough task. But if we can open up the conversation to say that failure is not something to be afraid of, we can help each other to continue in the most adverse of situations.
If you would like more information on fintech, customer data, and digital transformation, join us at our partner Stibo Systems' first-ever global virtual conference, Stibo Systems Connect 2020, November 3-5. In our session, “Why Digital Business Transformations Fail and the Importance of Data First Strategies,” Dion F. Lisle, Fintech Consultant at FACERE25, and I will highlight the mistakes that businesses intent on digital transformation must avoid and share use cases of successful data-first, digital transformation strategies. Click here to learn more.