Why do digital transformation initiatives derail and how to bring them back on track? Satheesh Kothakapu April 9, 2021

Why do digital transformation initiatives derail and how to bring them back on track?

Why Do Digital Transformation Initiatives Derail And How To Bring Them Back On Track

The COVID-19 pandemic has brought the future of business to your doorsteps in terms of where and how work is done. CIOs are rapidly integrating cloud, APIs, microservices, AI and other emerging technologies into their business operations in the hope of streamlining processes and building resilient and agile workplaces. Indeed, the pace of digital transformation is unprecedented and unparalleled.

However, amidst much ado surrounding digital transformation, do you find yourselves stuck and struggling to keep the momentum going? Are your digital transformation initiatives “derailing”?” If yes, you are not alone. According to a survey by Mckinsey,

At organizations pursuing digital transformations, more than seven in ten survey respondents say the progress of these efforts has slowed or stalled at some point.

Read on to know the “red flags” that indicate your digital transformation initiatives will stall and ways to bring them back on track.

Signs your digital transformation journey is bound to stall

As Chris Howard, Chief of Research at Gartner, was quoted as saying, “IT leaders have learned many valuable lessons in the past year, from how to quickly move entire organizations to remote workforces, how to create a secure work environment, and how to prioritize digital initiatives like never before. But there is more work to be done. Leading in 2021 will look different from leadership in 2020, but understanding and planning for unknowns and continued disruption across the IT organization is critical to moving forward.

Digital transformation is a journey that keeps evolving with time. Encountering obstacles along the way isn’t the end of the road. Once organizations have done their initial homework, they need to work hard to keep things moving at a consistent pace.

But why does the transformation journey stall?

1. Your digital transformation “vision” lacks clarity.

The Problem – Often, the primary factor that causes transformation to stall in the pilot stage is the lack of strategic clarity and vision.

Neil Osmond, Distinguished VP Analyst, Gartner, once said,
Digital transformation won’t succeed without a common understanding and a clear vision across the organization. When people think about digital transformation, they tend to emphasize technologies such as artificial intelligence (AI), chatbots or automation, as these are the most visible attributes. But technology issues are usually the easier things to work through. The non-technological aspects, if not addressed, can mask the depth of organizational transformation required and become serious inhibitors.

The Solution – Focus on the intent and strategy. Only a specific, actionable, and time-bound vision that fulfills a business outcome can ensure the success of your digital transformation endeavors. It’s crucial to reach a consensus among senior leaders and stakeholders regarding business goals. Therefore, build a comprehensive model for the timing and impact of the digital initiatives and collaborate with the operations function to redesign transformation.

For example, “We will digitize our processes to simplify our ways of working and enable seamless employee experiences.” is a generic and ambiguous statement. However, “We are changing from traditional intranets and legacy systems to AI-powered modern intranets to ensure seamless employee experiences.” leverages a from-to descriptive metaphor to clarify the rationale.

2. Your people are unaware of the “why” and resist change.

The Problem – To be truly successful, digital transformation initiatives need to move at a steady pace. Move too slow, and you risk falling behind your competitors. However, move too fast, and you risk isolating your most valuable resource – your people. Often companies set tight deadlines for their transformation plans, and individuals aren’t appropriately briefed about the organization’s challenges and the need for change.

Moreover, employees may be overwhelmed by the magnitude of change. For them, change equals risk and brings uncertainty, building resistance that leads to inertia and ultimately failure. Additionally, automation introduced to save time and money may be perceived by employees as a threat to their jobs.

As Osmond rightly said,
The number of times that change is mentioned every day can lead to transformation fatigue. People come to work to deliver, not to change. If you’re forcing change on them, it can be really tiresome.

The Solution – Gradual and effective change management is the key to overcome inertia, increase loyalty, and build a culture that gets people excited about digital transformation. You can instill trust and confidence by aligning people to the prospective initiatives, talking about what will and won’t change, securing their buy-in, and making them a significant stakeholder in the decision-making process.

3. Your operational costs consume a significant chunk of your IT budget, leaving very little for growth and transformation.

The Problem – An organization’s IT budget is allocated to three major areas – run, grow, and transform. However, operational (run) costs, such as subscriptions, licenses, cloud costs, maintenance, upgrades, personnel, etc., consume a significant portion of the budget, acting as inhibitors to the growth and transformation of your digital infrastructure.

Research by Juniper Networks showed,
Network security was an ever-present, and growing headache for IT teams, with 97% of the respondents saying they had been obliged to spend money on breach mitigation in the past 12 months. The professionals’ tasks were being made more difficult by network performance issues, an inability to upgrade the entire network, and the daily grind of basic network maintenance.

Additionally, as more and more organizations move to the cloud to reap benefits such as unparalleled flexibility and scalability, they tend to lose sight of the costs. About 1/3rd of a company’s IT budget goes for cloud services, with 70% of the cloud spend getting wasted due to poor architecture and unprovisioned resources.

The Solution – Reduce operational (run) costs with AIOps, AI-powered cloud cost optimization, and AI-enabled virtual assistants.

a) AIOps, or artificial intelligence in IT Operations, optimizes IT costs while enabling faster, simpler, and more efficient IT operations. AIOps saves millions of dollars of revenue, often lost due to network disruptions, and at the same time frees up people’s time for more productive work by automating standard day-to-day operations. Functions include – application performance monitoring to maximize network uptime, predictive analytics to single-out IT incidents that can potentially cause network outages, AI-enabled root-cause analysis to expedite issue diagnosis, and automation of mundane tasks, like password resets, logs and audits, routine queries, etc.

b) Cloud cost optimization ensures costs don’t spiral beyond budget; to maximize ROI and reduce the total cost of ownership (TCO). Cost-optimization measures include the following –

  • AI-enabled cost anomaly detection
  • Right-sizing to identify unused capacity and consolidate idle resources
  • Data insights on capacity forecast and budget
  • Proactive cost optimization
  • Service analysis and provisioning
  • Active action on recommendations
  • Governance, admin control, security, and compliance

c) AI-enabled virtual assistants automate routine, repetitive tasks, such as solving everyday issues, maintaining IT tickets, and managing service requests. Hence, they free up service desk agents for growth and transformation projects while saving enormous costs and ensuring the quality of service does not suffer. Virtual assistants leverage technologies, such as AI, machine learning, and natural language processing (NLP) to answer FAQs, remediate day-to-day issues, and provide intelligent suggestions based on the employee’s role, geography, etc.

Final Thoughts

Digital transformation is an ongoing process and is bound to bring some disruption to the workplace, at times putting a halt to your transformation journey. According to Harvard Business Review, “No organization has the momentum, power, or time to eliminate all the obstacles. But the big ones must be confronted and removed. Action is essential, whether it is a person, a process, a regulation, or company structure.”

As seen above, three actions may help organizations manage a derailing of their digital transformation momentum –

  • Bringing strategic clarity, consensus, and a clear vision across the organization.
  • Implementing change management to overcome resistance and secure organization-wide “buy-in.”
  • Optimizing operational costs to leave sufficient resources for growth and transformation initiatives.

At Acuvate, we help clients optimize costs and get their digital transformation endeavors back on track with our AI-driven Services, and virtual assistants.

To learn more about our services, please feel free to schedule a personalized consultation with our experts