It's been well documented by commentators far more qualified than myself, that nearly four out of five large digital transformation projects fail to deliver the results required to justify the investment in them.
With IDC predicting that DT global spend will reach a staggering $2trillion by 2020, if only a fifth of those produce a positive return, an eye watering $1.6 trillion is set to be written off at some point in the near future.
If getting ROI in digital is so hard, why are so many still investing?
- The rewards for digitising a business, or disrupting a market, can be dazzling. A successful project can transform an organisation's market share and profitability and set them up for the foreseeable future;
- NOT doing it isn't an option for many: if they don't do it, their competitors will; and
- Companies appear blind to the true causes of failure, and set out without a proper plan for success.
From our work across a number of DT projects, we've observed some crucial areas that can mean the difference between successa nd failure:
1. Measure what Matters
The old adage of "what gets measured gets done" is never truer than in DT initiatives. If the most measurable elements of your programme objectives are expressed as cost-savings, efficiency measures, or down-times then that's going to be the focus of most of the thinking and effort that goes into the design of the digital solutions.
How many DT projects have realistic, measurable, actionable metrics for customer satisfaction, quality of experience, level of staff engagement, shared vision? Not just within the programme's team but across the whole business?
DBS, Singapore's largest retail bank, is a great example. Lying in the bottom quartile of customer satisfaction rankings, the bank set out to digitally transform its main customer-facing processes in 2009. After extensive research, COO Paul Cobban, landed upon the idea of ‘The customer hour', because most of the customer criticism was rooted in slow processes. Once this focus was embraced by the company, 250 million hours of customer ‘wasted time' was removed, and DBS was the number one rated bank within a year.
If you want a return on your digital investment, set KPIs that are customer- and employee-focused: NPS scores, CSat, employee engagement scores and staff turnover are good options, but try softer measures too - collaboration indicators, ideas contributed, and qualitative insight.
2. Co-create experiences
Too often, companies view collaboration and speed as binary choices. Too little time to research with customers or engage all divisions within a business, and a poor understanding of agile methodologies, gives teams false comfort: "It doesn't matter if we don't get it right first time, we'll iterate in live".
Wrong. If a project doesn't root itself in genuine customer or employee needs - taking note of actual customer preferences, expectations and behavioural norms - then it'll prove nearly impossible to course-correct later on.
Successful digital initiatives embrace customer and staff input and involve them in designing and architecting solutions throughout the life of the project.
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