‘Digital Transformation’ Requires Stakeholder Alignment

by Granville Triumph

Less than a decade ago, digital transformation was a novel concept. Today, organizations must embrace new technologies in order to remain competitive. It’s important to remember, however, that digital transformation isn’t just about implementing new IT tools — it’s about changing the way you do business so that you can take full advantage of technology.

That’s easy for “digital native” startups. These organizations built technology into their business plans and strategies. In fact, they are in business to deliver technology-driven products and services. These firms are disrupting markets in a wide range of industries, and more traditional businesses must respond and adapt in order to remain competitive.

If you’ve been in business for several years, digital transformation can be painful. It forces you to learn about new technologies and reconsider well-established processes and workflows. It requires you to imagine ways that you can innovate, become more agile and enhance the customer experience. 

But before you begin planning your technology initiative, you need to ensure that key stakeholders across your organization recognize the level of change that’s required and have the right expectations regarding the impact of that change. Otherwise, your initiative won’t deliver the expected results.

Causes of DX Failure

The failure rate of IT projects is legendary. According to a report from Standish Group, less than one-third of all projects were completed on time and within budget during the preceding year. An astounding 75 percent of IT executives believe their projects are “doomed from the start,” according to Geneca. 

Many people assume that the technology itself is the cause of IT project failure. However, research shows that the most likely causes are (1) insufficient funding or budget, (2) poorly defined requirements, or (3) lack of executive buy-in. Not having a clear vision of what you hope to achieve and how you are going to achieve it can also doom your digital transformation initiative.

Here are some stats:

  • More than 60 percent of organizations identified “capturing time/costs against projects” as their biggest challenge (The Access Group).
  • Eighty percent of project management executives don’t know how their projects align with their company’s business strategy (Changepoint).
  • Approximately one-third of projects fail because of a lack of involvement by senior management (University of Ottawa).

Understanding Disparate Viewpoints

All of these doomsday scenarios can be traced to a lack of alignment among key stakeholders. That’s because executive management, finance, IT and end-users tend to have different perspectives and goals. The management team wants to ensure that the initiative will enhance performance and/or create competitive advantages, while finance is concerned about the cost of the project and the potential return on investment. IT is worried about supporting the new technology, and end-users want to know why you’re making changes and how those changes will affect their jobs.

When each of these viewpoints is addressed, it’s easier to get budget approved and develop a solution that will meet functional requirements. Upper management will become the project’s champion and help drive it toward successful completion. Ongoing communication throughout the project will enable adjustments and realignment as necessary.

Digital transformation isn’t just a buzzword — it’s the force driving significant change in organizations of all sizes. Organizations must take steps to align the needs and objectives of various stakeholder groups to ensure that technology initiatives deliver the desired results.

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