Traditionally, digital transformation took the form of large-scale IT projects overseen by CIOs with large budgets at their disposal and relatively free reign to achieve their technical and operational goals.
Today, due to the COVID-19 crisis, the scale and pace of change is unprecedented, budgets are smaller and there is less appetite for risk than ever.
In this context, taking an agile approach to digital transformation is the best way for businesses to deliver quickly and cost-effectively, building resilience into the process and ultimately reducing risk.
But although agile might be less risky than waterfall, it’s not entirely risk free. Which means that even with an agile approach, digital transformation needs to be a strategic business decision with buy-in from the whole of the C-suite and clear, company-wide goals agreed from the outset.
CIOs will increasingly need to make a business case for their plans. It’s not good enough to say that a project will increase server speeds or reduce the VPN load or improve the website’s load time. The CEO and the CFO will want to know how it will impact market share, customer satisfaction and employee productivity.
So if a CIO sets out their plan for getting rid of fax machines and migrating to a cloud based document sharing system, the CEO may well turn around and ask, “But will we be any better off for it? Will our teams be more efficient? Will our customers be happier? Will we save or make money on the back of that?”
What the CIO and their peers in the C-Suite need is a common language for what success looks like, which bridges the gap between tech-driven improvements and non-tech stakeholders. And as we start to take a broader, business-wide view of digital transformation it becomes less about technology and more about people, both internally and externally.
Internally, if digital transformation doesn’t deliver value for employees - or it is not perceived to deliver value - then in the long term it can’t be said to have succeeded. Poor uptake, internal dissatisfaction and the resultant implications (low morale, high employee churn) will ultimately negate any technical or operational benefits the transformation has brought.
Likewise if customers do not perceive a benefit from the new digital approach, then it will not have served to sufficiently differentiate the business from competitors. If the human experience is poor, it will impact negatively on brand loyalty and ultimately sales. Again, such a digital transformation project cannot be said to have succeeded even if technical and operational goals have been achieved.
Finally, and perhaps most importantly, there is the fact that, according to McKinsey, culture is “the most significant self-reported barrier to digital effectiveness.” Culture is about people. From the outset, a human-centric approach to digital transformation is essential if it is to succeed.
The truth is that almost 70% of business transformation projects don’t meet their goals, according to a 2018 report by the Harvard Business Review. And if that was true two years ago when life was a lot simpler than it is today, then it’s highly likely that that number will go up.
This is why it is vital that businesses view digital transformation holistically, understanding and setting business-wide goals from the outset and ensuring that they can quickly and easily measure its progress using the right measurements.
Ultimately digital transformation cannot be simply about the technology. Its function is to power business initiatives to support employees and customers. And that means that we need a way to measure its impact on people.