Why do Enterprise Digital Transformation projects overrun their budget, or not produce the desired benefits realization? When I began my career in doing DX initiatives, changing business processes, and utilizing ERP solutions was almost three decades ago. At the time, most of the projects, something like 70% of them, were late or did not deliver the expected benefits.
Recently, I read an interesting statistic that about 70% of Digital Transformation projects are still significantly late and or do not produce their expected benefits realization as planned. That means, in the 25 or so years that I have been a part of this industry, we have not been able to make any progress on delivering large scale transformation projects. Honestly, that is a sad statistic, yet most likely correct.
So what is going on? Why are we always late? Why are benefits disappearing? If you were to poll DX leaders about the most important things that dictate a successful DX project, you would find two consistent responses. Effective Change Management and accurate data.
The technology is not the issue anymore. It once was. When we began doing Business Process Reengineering and DX transformations, there were few technology choices to support the transition, and they were incomplete and or “buggy.” There were only two significant players, SAP and Oracle, and each had issues. These days, the technology is much more widespread, richly functional, they work very well and truly have global reach and support for most industries. Thousands of installations are up and running, and there is more every month. So why are the implementations still so uncertain and so many viewed as failures?
One issue is the underlying data. You can implement a comprehensive technology, no bugs, works 100% of the time, but the first time a user sees inaccurate or duplicated data, the automatic response is “This system stinks!” Of course, we know it’s not the system; it’s the data. We can talk about accurate data all day long, but Change is a much fuzzier topic to tackle.
According to my colleague Richard Catalano, Within the realms of a digital transformation, the OCM (Organizational Change Management) group is a significant player in the overall health of a program. This group gets tasked with multiple initiatives to be effectual in the successful implementation.
Many people look at Change Management people as “Party Planners” that is responsible for communications and events like lunch and learn presentations and such, but the role of OCM and the Change process is much, much more. The management of the change process is critical to benefit attainment and on-time project delivery. We all know that, yet, most programs under staff the initiative and use the most basic, old tools to monitor the change progress.
In my experience, a DX project is seldom just one project. There are usually many, sometimes a lot of related, dependent projects all competing for benefit improvements and company resources, including resource time and money. The OCM team (and Program Management) has to stay on top of developments in many projects, including all of the initiatives that can affect more than just their space. Keeping track of progress across all of the programs and reporting on benefit goals and progress is a crucial component of garnering continued support for DX programs. The entire organization needs to continually build that support to retain key staff, get cooperation from the rest of the organization, and achieve their budget and benefit goals.
OCM is well placed to help the leaders of the organization put accurate, informative information out to the organization. However, they have to help the leaders provide leadership, not just as a support mechanism. The entire program team needs tools that are keeping up with the pace of change. Many organizations are using business dashboards to keep their focus on the drivers for successful business operations, why not implement a tool for the measurement of DX initiatives at all levels? A tool that can help provide accurate status reporting on program progress to budget and value attainment projections. One that can help track value across programs helping to identify overlaps as well as implications for value attainment across the program when one part of the program stalls. Effective reporting and monitoring will help create and reinforce the appropriate focus and apply the same management focus to this process as a business would over other business-critical functions outside of the DX program. Implementing and using a tool that supports this will help eliminate surprises, and focus the company on the successful completion of the program, attaining the benefits expected.