Digital transformation is an overused term.
The concept of digital transformation is increasingly prevalent in today’s business landscape. The term digital transformation is widely used often, yet not always completely understood, leading to its overuse in various contexts. It encompasses a broad spectrum of organizational initiatives that almost any project could qualify as a digital transformation endeavor. After all, it’s hard to find a project that doesn’t use digital assets in some form. Any change to people, processes, policy, or infrastructure can be transformative. The digitalization of data and files dates back to the 1950s, and every software application ever built uses computers and digital files, thus, every application leads to digital transformation.
What exactly is digital transformation?
McKinsey defines digital transformation as “an effort to enable existing business models by integrating advanced technologies,” essentially allowing digital technologies to be integrated into already existing business models, changing the way you operate and deliver your product or service. From process and policy revisions to infrastructural overhauls, any change involving digital technologies can be considered transformative. As such, digital transformation has become an omnipresent aspect of organizational development, and every software application built contributes in some way to the ongoing digital transformation process.
The current generational divide complicates digital transformation efforts
The introduction of computers and software coincided with the baby boomer generation and the subsequent advancements in digital systems and the internet. Though the introduction of digital systems was over 40 years ago, these systems didn’t take hold until the late 1990s and early 2000s with the introduction of the Internet. While later generations have grown up in a world immersed in digital technologies, the baby boomers, who are still largely in control of decision-making positions, may not fully embrace or understand the potential of digital initiatives.
The baby boomers were, and to some extent still are, in control of decision-making. Senior management holds the key to the prioritization and funding of digital initiatives. Many are uncomfortable with how technologies are used or should be used, to improve their organization. However, many individuals in leadership positions may see the opportunity but are hesitant to fully buy into the potential benefits of digital transformation. This reluctance at the top levels of organizations often results in half-hearted or non-committal approaches to digital initiatives, ultimately impeding their success.
Technology is hard and unforgiving
Systems are often unfriendly, confusing, and hard to work with. Additionally, the challenges posed by technology itself cannot be overlooked. We hear about user-friendly systems all the time. But people are people, and what is intuitive to one may be difficult to another, especially for older workers who have had to become comfortable with applications. The complexity of systems, from general bad designs to system slowness, to system hanging, to incoherent error messages, coupled with insufficient training and support, leads to negative experiences and suboptimal outcomes for many employees.
Implementing new systems, and digital transformation, is not straightforward.
Differences in generational knowledge, expectations, familiarity, and comfort with digital systems contribute to the complexity of implementing digital transformation initiatives. Systems designed by younger, software-loving designers, continual upgrades and feature stuffing, inconsistent training on systems and their use, unrealistic expectations by senior management on the effectiveness and efficiencies of new systems, and a lack of commitment from management to get systems implemented and then supported—all has led to an unusually high percentage of digital transformation efforts that have failed.
According to McKinsey, 70 percent of all digital transformation efforts fail. Associated impacts include 45 percent that are completed significantly over budget, 7 percent that are completed over schedule, and benefits that fall short by about 56 percent. These statistics, along with the inherent complexities and challenges, may lead senior managers to question the value and feasibility of embracing digital transformation initiatives.
Keys to achieving digital transformation success
Setting expectations is exceptionally key
Setting expectations for a digital transformation project and implementation is key and helps everyone involved understand the potential challenges and outcomes and better prepare for potential delays or obstacles. Realistically consider the following to occur:
- Not all project participants will likely receive exactly what they expected, and the implementation of the system is likely to impact the daily responsibilities of the project team.
- ​Factors such as vacations, sickness, special projects, and organizational crises will likely influence implementation times
- Users may not immediately embrace the system, particularly if they have only received minimal training
- Users might also request changes right from the beginning and expect quick implementation
- Anticipate that the IT department will raise concerns regarding the solution’s security, infrastructure, maintenance, documentation, and user support.
Recognize the generational divide
There is a difference in digital proficiency and comfort between boomers, millennials, and Gen Z. Consider the following for a smooth implementation process:
- Provide users with options to choose their preferred way of using the solution, such as icons, dropdowns, or words. Offer choices for color schemes, and provide options for wording of error messages.
- Millennials and Gen Z are comfortable using smartphones.
- Boomers prefer clicking buttons over typing.
- Tailor the report details according to the desired level of specificity.
- Videos can be helpful, especially if they can be shared on social media.
Selective implementation can help
When implementing new software or a solution, it can be helpful to consider selective implementation strategies. It’s important to recognize that not all users may need or be ready for the full set of features or functionality initially promised. Therefore, it may be beneficial to carve out specific modules or functionality to be presented first, with the potential for additional features to be introduced later. Additionally, providing different user groups with different access and meaningful feature sets tailored to their needs can be a valuable approach.
It’s also worth considering locational rollout strategies, especially for larger organizations operating in different countries. In some cases, organizations may need to operate in a duality until users become fully comfortable with the new solution, although this may not always be feasible or may require substantial additional effort. To ease the transition, training some user groups first, particularly those with the greatest need for the solution, can be a practical approach.
Exploring AI technology potential and challenges
AI technology has the potential to make various tasks easier and more efficient. This can lead to software becoming more versatile, conversant, and interactive, with faster and more efficient development. It will also allow for better incorporation of user feedback into functionality. However, AI may not address the varying comfort levels and expectations of different users. Initially, AI may attempt to perform a range of user functions, which could have different degrees of success. Additionally, as digitalization increases through automation, the proportion of fake and incorrect data among all digital assets may also grow.
In conclusion…
Overcoming the numerous obstacles and challenges associated with digital transformation requires a concerted effort and a strong commitment from all levels of the organization. Realistic expectations, proper planning, understanding, and support play pivotal roles in increasing the chances of achieving successful digital transformation. By addressing the generational gap, garnering support from senior management, and acknowledging the inherent complexities of digital technologies, organizations can pave the way for successful digital transformation initiatives.
About the Author
Scott Brandt, President and CEO of eQuorum Corporation
Scott Brandt brings to the leadership position more than 30 years of operating and finance experience for growing technology and SaaS companies. Before joining eQuorum, Scott was CFO/COO and Director of Accelarad in Atlanta, where he was responsible for all operating, finance and administrative functions. Before Accelarad, he co-founded BACK Aviation Solutions in Atlanta where he was Director and CFO and was also responsible for strategic planning.
