Digital transformation has been the central development of the modern workforce for years. All organizations have had to adapt to the development of powerful technological innovations in today’s corporate landscape in some form or another. Finance professionals in particular have had their work processes changed by digital transformation. Unfortunately, most fail to effectively do this, and lag behind the competition. A recent BCG study revealed that 70% of digital transformation efforts fail; any serious company can understand that this is a completely unacceptable odds at success. Given the criticality of digital transformation, and how consistently efforts at it do not go as planned, finance teams should possess a thorough understanding of the most common mistakes in this process. This article will flesh out these mistakes, and what can be done to prevent them from happening.
8 Mistakes Consistently Made in Digital Transformation
1. Inadequate Budgeting & Planning
Some organizations make huge plans and then jump straight into executing them, without any precise budgeting or first checking whether their employees possess the necessary skills and knowledge. This is exactly how hidden costs begin to snowball, in the form of additional required training, unanticipated delays, new hires, etc.
Slow down during the preliminary planning, add buffers to your budget for each part of the project, and always take it one step at a time. You should also ensure you have what it takes within your organization to reach your goals.
2. Unrealistic Expectations & Rushing
This is the perfect storm for failure. Remember that big changes are a lot of small things done well, and transformation projects cannot be done all at once because you will either burn out or fail.
Solution: Start with a limited MVP and share any positive results early on. This will serve as an incentive for stakeholders, management and your employees to keep on transforming, and also allow you to see whether your strategy is good enough or if it needs some adjustments. In other words, focus on the step in front of you, and not the whole staircase.
3. Generally lacking Clarity
Surprisingly, many organizations know what their goals are, but inevitably, the people who are directly involved will have a different understanding of how to achieve them, and even of what the goals actually are. If no one is really clear about their role within the digital transformation process, they won’t be as engaged as they should be, nor will they do the tasks they’re supposed to do.
Clearly articulate your expectations, define the goals of the transformation, the reasons behind the process, and set KPIs. You should also potentially redefine the roles of your employees, so that they are clear on their position within the transformation process and feel a sense of responsibility for it.
4. Ignoring employees and lacking executive commitment
The transformation process often reflects the CEO’s own state of mind, and can occur without any prior discussions with other employees, without any outlining, or any consideration of other perspectives, and without any training. As a result of this, employees are often disengaged, and even top management will lack commitment to the project. It’s also worth noting that no one will begin to use the new technologies unless they know why the old system was replaced and how to use the new one.
You need to talk to your employees, from the C-level executives down to junior specialists. Get different perspectives and make adjustments to the transformation as necessary. Also, keep on explaining why it’s necessary to get rid of the legacy systems and make sure that they like and use the new ones.
5. Neglecting preparation and ignoring crucial data insights
Any project can be sabotaged by failing to make well-informed decisions based on quality data, and skipping an adequate preparation phase. You wouldn’t go right into heavy lifting without a good warm-up; injuries happen without it. The same goes for projects, preparation is a must.
Exploit, manage and analyze your data collection to take the appropriate measures. Don’t just rely on your intuition.
6. Disregard of the importance of user-friendliness
The needs of your customers are constantly changing, especially during the COVID-19 crisis. Not monitoring those needs leads to creating products, systems and services that have no value for them or that only solve older and irrelevant problems.
Think in terms of the greater context. Use data insights, discover what your customers really need, and try to identify some trends, in order to anticipate what your users may soon expect from you. Put your clients first, so that you can always be one step ahead of them, and never behind.
7. Hiring Multiple Vendors
While it is not a good idea to navigate digital transformation alone, it is also important to avoid hiring a bunch of different vendors to bridge any gaps in skills or infrastructure. This exacerbates the difficulty of managing and remaining consistent with your strategy, especially when you also have non transformation-related tasks to execute.
Decide on a solid tech partner that can help you with everything, from strategy down to implementation, so that you can concentrate on your ongoing processes to keep everything moving forward. This will also enable you to get valuable insight from a third party – one that is always ready to test and try out even your best ideas.
8. Treating digital transformation as a destination and not a journey
Many organizations (unfortunately) regard digital transformation as a typical tech project and once they achieve their perceived objectives, they think this is the end of the road. The truth is that digital transformation is really an endless journey of keeping up with technology. There’s no way around this.
The digital transformation is not a project that can just be completed and then forgotten about. This project needs to be approached as an ongoing journey that of course has objectives, but not ones that signify the end of a process. Digital transformation has no end, because it is simply consistent with inevitable technological updates.