When the priorities of technology and business execs clash, digital transformation projects fail
Research shows that between 70 per cent and 84 per cent of digital transformation programmes don’t achieve their intended goals. While the reasons for failure vary widely, the most common we’ve seen is the disconnect between the strategic priorities of IT and business executive teams.
It is a common misconception that the role of technology teams is to identify, budget and implement these technologies. Although it is seemingly synonymous with things like cloud, AI and blockchain, digital transformation actually involves so much more than just technology.
Bring on the business model
Rather, digital transformation requires unprecedented change in the way organisations around the world are structured – targeted at aligning business and technology imperatives. Where technology used to act as a functional component in an organisation’s business model, we’re now seeing business models based entirely around technology – industry 4.0, mobile-only banking, and the gig economy being prime examples.
For these business models to work, we need complete cohesion between business and technology teams – which is easier for some than others. How can executive teams, whose strategies have traditionally been built around business imperatives, now be expected to instinctively know which technological changes are needed and which are not? On the same merit, how can technology teams be expected to plan for the wider organisational, social and economic consequences of digital transformation?
Ultimately, there is no delegation when it comes to digital transformation. Organisations must level the playing field between technology and executive teams, learn from one another and establish mutual respect in order to iron out any misaligned incentives which can cause digital transformation projects to fail.
Being more agile
If an idea starts and ends in the silo of an IT team, it paves its own way to failure. Adopting an agile approach and mindset across teams – through regular communication, aligned objectives and a dedication to self-improvement – provides a strong foundation for a business to react quickly and flexibly to a new trend or situation, and to keep innovating in the process.
The agile approach is normally associated with the Silicon Valley mindset of ‘move fast and break things’ – constantly working towards the next innovation or iteration to stay ahead in the game. However, agility can more accurately be described as the convergence of the objectives of business teams and IT teams, aligning what a company ‘needs to do’ and what a company ‘is able to do’.
The who and the how
This leaves two questions: who should lead the alignment of business and technology teams and how can this be done?
Firstly, the CTO is both a physical and symbolic link between different stakeholders and their respective objectives and/or concerns. Of course, responsibility for digital transformation is not the remit of any one individual; it is the responsibility of the entire organisation. Instead, the CTO simply represents a channel by which technology imperatives can be translated into business imperatives and vice versa.
With regards to the how, communication between business and technology teams needs to be both fast and regular, moving beyond the current channels that involve endless paperwork in particular. This could involve the setting up of regular meetings, using seamless communication channels, or even physically being in the same room when working on a change project.
Understanding the end game
Often, IT teams within companies are driven to undergo digital transformation projects by external factors.
For example, budget constraints on IT might compel an organisation to move all its core applications off premise and into the cloud, without necessarily accounting for whether or not they will be compatible with the new environment.
However, for a digital transformation project – or even a singular technology update – to be a success, business and IT teams need to be involved from the start. The first step is for everyone to understand the business issue that needs to be addressed.
A good example of this comes from telecoms giant BT. Changes in content consumption behaviours, a burgeoning amount of data and an ever-changing technology landscape were identified by BT as key business priorities which could be addressed by technology.
One of the key drivers for success during BT’s recent digital transformation initiative was its multidisciplinary approach, one which did not just involve technical upgrades, but the establishment of a culture that would reap the most benefits from them. Combining change communication with enterprise architecture, virtual machines with user-centric design, and deployment platforms with agile methodologies, BT was able to accelerate innovation while fulfilling the strategic needs of its various business units.
Creating tangible impact
Agility and innovation are key priorities for any business – priorities which increasingly rest with the CIO and the IT team. A recent Deloitte report found that nearly 70 per cent of technology and business leaders believe the CIO will have the most important role in driving digital initiatives in the next three years.
In order to support the business’ objectives surrounding innovation, it’s crucial that IT leaders develop a deep awareness and understanding of how company culture impacts the effectiveness of technology implementations.
However, this is almost impossible to achieve without inviting individuals from the business into conversations. Establishing mutual understanding between teams as a core facet of an organisation’s overall culture is therefore key to optimising its readiness to change. This will help to predict the likelihood of success when deploying new technologies before they are purchased, instead of simply evaluating them based on their ability to provide new ways of doing things, in turn creating tangible impact.
Consistent innovation is the key to a business’s survival. As the speed of change accelerates, it’s no longer enough for every firm to invest in the latest technology. A systematic approach, with equal input from IT and business stakeholders, is important to ensure successful business transformation.