10 digital transformation challenges and how to overcome them

Confidence is vital in 2021. Only enterprises willing to take a leap of faith will come out of the pandemic in strong form. But many teams have been hurt by digital transformation failures in the past. Michael Chalmers, MD at transformation consultancy Contino offers his advice for refreshing old fashioned views, overcoming past mistakes and making the best choices on the innovation journey, to produce digital transformations that stand the test of time.

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This is a contributed article by Michael Chalmers, MD EMEA, Contino.

For every digital transformation success story, there are many more failures. Even with the best intentions (and a substantial IT budget), large enterprises in particular face complex challenges that get in the way of innovation.

So what can be done to improve your chances of a successful transformation? When a digital transformation initiative doesn't go to plan, teams must be willing to learn from their mistakes. This means identifying what went wrong, and finding the confidence to try again. Easier said than done – but the best transformations often succeed when teams learn the hard way.

Here are ten reasons why transformations in the enterprise fail, and how teams can use this to inspire better practices on the next try:

1) Innovation efforts are not aligned to business outcomes

Businesses tend to focus more on technical outcomes than business outcomes. But to stand any chance of success, you must find your “why” before you get started. Build a solid business case and a cross-functional team of business stakeholders and technologists. Make your business case transparent and inform people of progress frequently.

2) Lack of C-level support

At the end of the day, if the mandate for change does not exist, true transformation is not possible. You need to have C-level support or innovation initiatives will struggle to scale beyond a small team or silo.

3) The “It's the way we've always done it” mentality

Many organisations make the mistake of lifting and shifting all of their procedures and controls from the last 50 years into their innovation project. 

But “It's the way we've always done it” is not the right response when innovating. This is the time to automate your checkpoints and compliance validation, and illustrate this with dashboards and visualisation. 

4) A fear of the unknown

A fear of the unknown can suffocate progress. Move your service management experts and compliance experts into your cross-functional teams. Have them consult with your engineering divisions and explore how you can increase the transparency and knowledge of change across your landscape. 

5) Overly ambitious targets that don't deliver ROI quick enough

Don't boil the ocean with digital transformation projects. Make sure your innovation efforts can demonstrate business value in three months. Apply design sprint thinking, cross-functional teams and minimum viable products to test your hypotheses with real customers. 

6) Focusing more on the technology than your customers

Your customer is not going to care about how you configure your service mesh. They want beautiful products that are stable, reliable and remove friction from their lives. Aim to deliver working increments of software to customers in every sprint. Make sure your “show and tells” have real customers in them and use their feedback to inform your next sprint goals. 

7) Lack of cloud-native skills and talent

Organisations often fail to acquire the skills and talent to build sustainable solutions in a cloud-native fashion. Investing in your people's skills and development is critical. Talk openly at industry events about what you're trying to achieve and the engineering culture you are breeding to attract people with the right skills. 

8) Proceeding without a clear business model

When it comes to building your innovation project, you need to be clear on your strategy. There are two options. Either you build a 'newco', a breakaway project separate from your core business, premised on modern technology and rapid innovation that will feed insights and learning back into the 'mothership'. Or you can start as you mean to go on, by invoking changes bit by bit and bringing your whole business with you over time. This is slower but can be transformative. 

Just don't get caught trying to do both! You'll achieve nothing. 

9) Denying your people decision-making power

Experimentation and entrepreneurship need to be encouraged and rewarded across the business. Your people should be empowered to make decisions as part of the innovation efforts. Establish environments in the cloud that allow your teams to be creative without breaking compliance. Use cloud-native security patterns and DevSecOps approaches to embed proactive measures at each stage of your software development lifecycle. 

10) No real timescale

Make sure that digital transformation efforts don't drift aimlessly, without being aligned with business outcomes. Break your effort into three-month planning increments with outcomes and key results clearly defined, captured and agreed with your engineering teams. Don't dictate these Objectives & Key Results (OKRs) to them or else you're destined to fail. 

Learn to fail and you won't fail to learn

But what should you do if, after taking all of the above into account, your transformation still fails? Remember that failure is integral to good business. Teams that can pick themselves up after a failed transformation, dust themselves off and find out what went wrong will have the confidence to try again until they see results. When aligned with business objectives, a culture of experimentation and collaboration is the route to a successful transformation.

Michael Chalmers is MD EMEA at transformation consultancy Contino, where he is responsible for the successful growth of the EMEA business, leading all departments including Sales, Delivery, Marketing, Finance, HR and end-to-end business operations. Chalmers has over 13 years' experience working with enterprise organisations across a variety of industries to provide high-value, complex IT solutions.