How easy is digital?
Simplify your digital transformation journey and ensure success by addressing four key focus areas.
What is digital?
Many people have had a go at defining it, but the key is to understand that digital is not just about front end channels, it’s not simply about process automation or data management. A digital company has an ecosystem that works together across front and back end systems, business operations and employed skills. Trying to change one in isolation will not “enable” the digital business that Gartner and others are saying is critical to do business by 2018.
Digital is a major transformation for any business, one where the culture needs to match the strategy, as much as the back office needs to work in tandem with the front office.
Why are organisations finding it so difficult?
Predictions are wild about how many data and digital projects will fail this year with upper estimates at 75%; the question might be “why so high and how can you avoid being in the majority?” We think this is the wrong question.
The failure rate figure of 70% of all IT projects has been with us for many years; it’s simply being applied to the digital world. For once we need to look at failure as something we need to work with in certain areas of digital; after all there is a world of prototyping and field testing that goes hand in hand with what digital is. Digital also needs a new definition of “success” and “ROI” to really make it work and this is where CIOs and CTOs need to take the lead to truly deliver a digital vision and culture.
If you want digital success, we believe there are four key areas to address:
- Legacy IT systems and the interfaces into them. One of the main issues we see is organisations believing digital is all about presentation, when in fact digital must bring together legacy systems and the interfaces into them.
- Operational change: business transformation and processes. Time and again we see back office platforms not able to handle the new load placed upon them from a digital layer. Customer complaints go up due to back office processes and existing skills not able to handle the new flood of high-volume, low-input interactions. Channel choices then push up costs, due to ineffective channel strategies that haven’t driven technology choices.
- Culture: organisation-wide change. We can’t emphasise enough how the culture of an organisation that wishes to become a digital leader needs to be managed and potentially changed. Your delivery organisations will need to understand delivering in weeks rather than months and years, shifting emphasis from “every project is a success” to “some are failures on the journey to something better”.
- Execution: governance; compliance; and programme and project management. We have worked with a number of organisations who “have a problem with digital” – they are actually suffering from programme and project failures that would be common to us all from the pre-digital era. Digital encompasses so much that it can be hard to find where the problems are and what needs to be done. We have seen focus then quickly head towards the new technology, leading to a vicious cycle of never getting to the route cause, gradually backing away and de-scoping from the original intent.
There are some fantastic successes in digital
We’ve painted a picture of a transformation full of pitfalls and risks, but to counter that you need to look at the potential rewards.
If we look at some of the successes of digital, it’s obvious great value is there for the taking:
- Bookmaker Paddy Power displayed how it has transformed itself from owning a host of local gambling organisations to becoming a successful international gaming platform. Whilst rivals, who were rooted in old business models have shut, or are in the process of shutting, their doors.
- Tesco leveraged digital in order to surpass the expectations of its customers by providing a new iPhone barcode scanning app. It is a great example of a brand that is stretching the use of technologies, to provide greater utility to customers than even they might expect.
- In the UK, aggregators such as comparethemarket.com and moneysupermarket.com have made shopping online for highly regulated services simple and effective.
So it really doesn’t have to be hard, but you need to know where to focus your energy. The technology isn’t as new as we like to think; the failures in delivery are common failures we have been seeing for many years. Sure, there are certain changes that you need to think about; how the front end, back end and data design hold together as one; whether you use legacy systems; or a greenfield build, is all critical to being able to leverage the technology and get true business benefit.
But crucially, our experience shows that what will make or break digital within a business, is whether it is treated as a core transformation with the necessary changes in culture and business processes that will support the entire organisation. Digital is not something that can be simply added on to a business: it is a whole business transformation which is enabled though the use of new technologies.
About the Author
Matthew Headford is a Managing Consultant and Head of Technology at Coeus Consulting. Matt’s specific responsibility at Coeus is to support organisations to understand their strategic ‘technology’ direction, in order to create opportunities from which they can leverage benefit. Before joining Coeus, Matt was responsible for the development of the Atos technology strategy to drive the business to achieve its three-year target. He also spent time at British Tobacco shaping the future of their UK IT systems.