How to Overcome the Biggest Roadblocks to Digital Transformation

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How to Overcome the Biggest Roadblocks to Digital Transformation

mckinsey logoCountless large, medium and small-sized enterprises are embarking on major digital transformation projects. But too often they go wrong — a McKinsey & Company report found that a full 70 percent of them fail.

You may think the reasons they fail have to do with the technology itself. But that’s not necessarily so. Peter Bendor-Samuel, CEO of Everest Group, a management consulting and research firm, writes in Forbes that “In investigating why digital transformation often fail to meet expectations, I find several factors contribute to the failures. However, I believe the biggest problem is the mind-set. This is where most companies go wrong… Technology is rarely the reason for failure.”

Bendor-Samuel says that companies manage digital transformation as if it is a single event “rather than a multi-year journey, is where most companies go wrong.” He adds, “Success requires change in two key aspects: it must be budgeted and managed differently.”

His solution: “I recommend changing to a mind-set and structure like a venture capital process. In this approach, leaders make capital available and sprints or projects that are completed draw down on that capital. Through the sprints, they monitor progress of the journey to keep it on track to achieve the business objective. This is different from a detailed plan or road map that lays out all the steps and includes a bottom-up analysis of money applied to go down the journey.”

In an interview with SearchCIO at the 2018 MIT Sloan CIO Symposium, Naufal Khan, senior partner at McKinsey & Company, offers his own set of advice on how to overcome roadblocks to digital transformation. One of the biggest issues, he says, is “the lack of a clear accountability at the leadership level. Either the CIO or the CDO [chief digital officer] becomes the leader of it, and the business is not always getting that joint accountability and actually doing the digital transformation, when they are the ones that are being affected the most.”

His solution: The CIO and CDO need to take joint ownership of digital transformation.

The other problem with most digital transformation projects, he says, is that companies bite off more than they can chew. “It's great to think big,” he says, “but you have to start small. Think about, what are the five to 10 really important use cases that you can start with? Perhaps a couple of use cases in finance, perhaps a couple of use cases in HR. Can I actually try these different things out and build on those, rather than thinking either very narrowly on e-commerce or having a big vision, but then struggling how to enter the problem?”

Do that, he says, and your digital transformation project has a far better chance of succeeding.

Deloitte Consulting on Digital Transformation and the C-Suite

Deliotte Consulting recently arrived at a similar conclusion. In fact, they say that digital transformation requires a "C-Suite 3.0." Deloitte offers clear advice on what this means for organizations and what must be achieved to insure success. Read our recent related blog post: "Deloitte Consulting: Digitally Transforming the Enterprise Needs a new C-Suite."

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About Author

Amy Groden-Morrison
Amy Groden-Morrison

Amy Groden-Morrison has served more than 15 years in marketing communications leadership roles at companies such as TIBCO Software, RSA Security and Ziff-Davis. Most recently she was responsible for developing marketing programs that helped achieve 30%+ annual growth rate for analytics products at a $1Bil, NASDAQ-listed business integration Software Company. Her past accomplishments include establishing the first co-branded technology program with CNN, launching an events company on the NYSE, rebranding a NASDAQ-listed company amid a crisis, and positioning and marketing a Boston-area startup for successful acquisition. Amy currently serves as a Healthbox Accelerator Program Mentor, Marketing Committee Lead for the MIT Enterprise Forum of Cambridge Launch Smart Clinics, and on the organizing team for Boston TechJam. She holds an MBA from Northeastern University.

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