Research has shown that digital transformation projects in the APAC region fail at a high rate and have mixed success at best.
For example, recently published Gartner research in Australia found that the success rate of CIOs running digital projects was around 48%, which, according to vice president analyst Daniel Sánchez-Reina, “was like flipping a coin. air”. He called the problem the “curse of random success.”
Vishal Dhawan, APAC regional managing director of software company Planview, said his company serves 4,500 clients worldwide, including more than 200 in Australia and more than 50 in New Zealand. The organization recently analyzed 2,500 value streams managed through its software, revealing that companies only see 8% of their planned initiatives being delivered in a tangible way.
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“I think today, boards and CXOs say, 'Hey, I've been spending millions on digital transformation.' Can someone show me the value I'm getting from these digital initiatives? If you look at the numbers and success rates, I think the wastage in digitization is quite alarming,” Dhawan said.
However, as he explained to TechRepublic, organizations can improve their success rate by focusing on culture, improving decision-making capabilities, and enabling the ability to pivot.
Why do organizations struggle with digital transformation projects?
Planview has identified several key challenges organizations face when pursuing digital transformation.
Lack of visibility and transparency
The work of the organizations creates a “very heterogeneous landscape,” Dhawan explained. Although many technology systems are implemented “for the right reasons,” he noted that executives often struggle to have a clear view of the status of digital initiatives across the organization.
“That visibility and that almost real-time transparency is missing,” Dhawan said.
Additionally, CEOs may know their top strategic projects, but often still need to request reports to get updates on their progress.
“And then half the organization ends up running around collecting data for that project, and by the time the data reaches the CEO, you know, things have changed,” he explained. “So obviously there are inefficiencies in terms of productivity and just gathering that basic sense of visibility,” Dhawan said.
Difficulty adapting to changing conditions.
Companies often find it difficult to change their digital projects or strategies mid-stream as requirements change, Dhawan said.
He emphasized the need for organizations to dynamically adjust or flex their strategy, shift initiatives, and reallocate resources in response to changing market dynamics.
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“The question is: How can you have those core capabilities… to be able to change and refine your strategies, tactics and initiatives, you know, based on those changing dynamics?” asked.
The rise of purely digital business models
More purely digital operating models are emerging, with no starting or ending point as is the case with traditional transformations or projects. Dhawan said banks and telecom companies aspire to such a digital operating model.
“The result is a completely different change of mentality,” he explained. “They are no longer executing projects. If someone runs an e-commerce platform or a mobile platform, it is not a typical project where there is a start and a stop; “You are starting a product initiative and there is no stopping as such.”
This digital operating model creates a series of new challenges for clients who adapt to this model of continuous innovation in complex organizations, such as prioritization and reprioritization in line with strategy, assembling cross-functional teams on agile projects, allocating costs and measuring KPIs.
Three Ways to Improve Your Digital Transformation Success Rate
A strong culture that enables better decision-making capabilities and the ability to change priorities agilely are factors in improving digital transformations or digital operating models, Dhawan said.
1. Foster a strong company culture
Dhawan said that success in digital transformation is the culmination of people, processes and technology within a company, where technology is used as a catalyst, rather than just an end in itself.
Planview believes that some organizations are effective when people and culture are the starting point.
“I think it starts with that change in mindset, the culture and how they approach driving their strategy. That is the starting point. So the culture and design of the organization becomes a good foundation,” Dhawan said.
2. Have abilities to make objective decisions
Recent research conducted by The Economist for Planview, which surveyed 600 executives in seven countries, found that only 14% were confident in their organization's decision-making ability.
“It all comes down to having the right set of capabilities, where you can drive a very objective-based decision-making model, especially when you're looking to allocate your capital and allocate your resources during a typical budget cycle.” Dhawan said.
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Since demand is coming from everywhere, Dhawan said objective approaches helped build consensus, so that people are aligned. “They should think, 'Yes, this is the right allocation of where our company's capital should be and where our resources should be invested for what we're trying to accomplish.'”
3. Enable always-on heading correction for transformation
Being prepared for change is an essential part of today's digital transformation or digital operations projects.
“You need to be able to come together as a management or project team to quickly analyze an objective, data-driven model to reassess and reallocate that finite capital and resources,” Dhawan said.
“It's about constantly looking at how the work aligns as closely as possible with your strategy and making sure any variances are highlighted quickly, so you can then correct course very quickly.”
