70% of Digital Transformation Projects Aren't Successful

According to recent research, more than half (51%) of enterprise IT spending will be focused on public cloud computing by 2025. As companies around the world look for ways to stay agile and competitive in the impending post-pandemic economy, they’re shifting away from traditional computer systems and onto cloud-based platforms.

Planning a Digital Transformation?

If you’re planning a digital transformation of your own, you’re in good company. Most organizations in 2021 and 2022 committed to making strides by increasing their tech spending, and the movement is forecasted to continue long beyond 2023.

The high percentage of IT spending dedicated to cloud adoption indicates where the next generation of distributive business models will lead to. Moving forward, companies that fail to join the cloud shift run the risk of becoming obsolete, especially as consumers grow increasingly expectant and tech-savvy by the moment.

Adopting cloud technology can sound great in theory, but the execution is an art form and can fumble easily. In fact, experts estimate that around 70% of IT digital transformation projects ultimately fall short of their goals. As you ramp up the early phases of your digital transformation, these kinds of statistics can seem daunting, but they shouldn’t deter your efforts.

Instead of fearing failure, focus instead on optimizing your project and identifying vulnerabilities early. Today, we’re sharing what a successful IT implementation looks like, the issues you might encounter, and how we can help you ultimately fulfill your goals.

Cloud Adoption

Many organizations have talked about migrating away from their legacy systems and onto the cloud for years, but have only gotten serious about the effort in recent years. What’s driving the sudden spur in activity?

We can trace most of these new implementations back to the COVID-19 pandemic, which required most companies to re-think and re-structure the way their teams work. In one study, researchers found that 81% of companies said that the pandemic had accelerated their cloud timelines.

Within those companies, there was a 200% increase in organizations planning to move at least 75% of their apps and workloads to the cloud. In addition, 86% were considering cloud options in their decision processes for new applications, and more than 40% chose the cloud as their first option.

In hindsight, it’s easy to see why the cloud suddenly became more appealing. Companies that had not made the move before March 2020 discovered that without access to their data center, network, hardware, and software, they were severely limited in what they could accomplish.

Conversely, those that were already performing most or all of their processing in the cloud found it easier to comply with quarantine, stay-at-home, and remote work setups. Their employees could log in from anywhere, for as long as they needed to.

At the same time, the public cloud also proved to be more reliable and scalable during the pandemic. If a company had issues with its on-premise systems, it could alleviate those burdens by moving its core operations there. As more of their workforce went remote, production didn’t wane.

While the future of the pandemic is still unknown, it’s expected that cloud adoption will continue at its current pace long into the future. The reasons why include:

• More companies making the switch to a fully-remote workforce to lower infrastructure costs and improve productivity
• More secure remote access
• More vendors (e.g. security, governance, enterprise architecture) investing R&D resources into cloud-based applications
• A renewed focus on preparing for business continuity needs in the face of a crisis

A cloud-first strategy can help fulfill all of those aims, but these implementations can be complicated. Before you jump into your project, take the time to understand and define what success looks like for your team.

Defining IT Implementation Success

There isn’t a one-size-fits-all definition for IT implementation success for your digital transformation projects. Rather, what constitutes a successful project will likely vary from one organization to the next.

Among others, some of the deciding factors include:

• Project scope
• Project goals
• Project budget

Triple Iron Triangle

While each project will include its own set of unique requirements and goals, those that are successful will adhere to three simple mandates, which we call the Triple Iron Triangle.

To achieve success, your IT project should be:

• Delivered on time
• On budget
• On Target

Sounds straightforward, right? As long as you dedicate plenty of time to your initial planning period, you should be able to set realistic timelines, budgets, and goals. That way, your teams won’t take too long, overspend, or focus their efforts in the wrong direction.

However, it’s not always that simple. At Quazic, we have seen many projects that have met the Triple Iron Triangle Constraints and did not return value to the organization or to the users.

On the other hand, the reverse can also be true. An IT project can suffer delayed timelines, overblown budgets, and scope creep, only to deliver a fantastic ROI and user adoption, despite challenges during implementation.

While stories like these obviously instill hope, they’re usually the exception to the rule, and shouldn’t be looked to as examples. Instead of skipping right through the planning phase and crossing your fingers that the project will still succeed, focus now on what you can do to give it the best chance of survival.

Top Factors for Successful Digital Transformation

It all starts with understanding what you need to do and putting plans in place to achieve those requirements. Instead of squabbling about potentially wasting time, money, and energy, start with a mindset of success.

Typically, we define five factors that can ensure the success of your IT Cloud Adoption project. A strong software project implementation plan should include:

1. Execution Support
2. Emotional Maturity
3. User Involvement
4. Optimization
5. Skilled Team

Together, these elements can work together to deliver project success. However, lacking in just one area can throw the effort off-kilter. For instance, if you have everything in place but under-emphasize organizational change management, you might find that your employees are unwilling to support the new software.

Without user involvement, it doesn’t matter if you implement the most tech-savvy platform in the world. It will sit on the shelf and fail to deliver value unless it’s put into practice. Each of these five factors must be present in full to propel your project forward.

Correct Existing Digital Transformation Projects That Show Signs of Early Failure

As you monitor your project, you might see signs that indicate it’s heading in the wrong direction. For example, one of the biggest warning signs that an IT project will fail is scope creep. This occurs when key project stakeholders begin changing or adding to the project requirements, even after they’re established.

One tweak to the plans might not be detrimental. However, the more a project manager approves each change request, the wider the scope and budget start to grow. Before long, it’s reached a level that your company can’t afford to sustain.

Expanding timelines, budgets, and expectations are clear signs that the project might be in trouble. At this juncture, it might be tempting to abandon the work altogether. That way, you won’t squander any more company resources and can preserve the ones you have left.

Yet, all is not lost. Even if a project doesn’t start to go off the rails until halfway through its delivery, the project is far from gone. At Quazic, we specialize in helping companies come back from the brink of IT failure, setting them up for continued success.

Steps to Get Back on Track

Rather than trying to make up for a lost time, the most effective strategy we employ to get a project back on track is to slow it down. If an organization has all the prerequisites for success (support, emotional maturity, user involvement, optimized processes, and skilled workers), we typically follow these steps to correct the project:

1. Pause: Don’t rush into anything and avoid moving forward until issues are resolved.
2. Take a breath. Take time to remove the frustration and anxiety from the situation so all problems and challenges can be laid on the table.
3. Prioritize: Think about what needs to be done, and organize those steps in order of importance.
4. Revisit the Original Project Plan and Vision: Discuss the original goals and prioritize resolving challenges that directly impact that vision.
5. Prepare: Acknowledge that the most crucial challenge may not be the only one. Prepare a strategy to realign the team as required.
6. Plan: Make a concrete plan, create tasks, and assign responsibilities.
7. Perform: Put the plan into action and ensure everyone understands their role.
8. Prevent:  Schedule a post-project evaluation meeting to commend the successful delivery of certain project components and discuss opportunities to improve the process for next time.

Greatest Risk for a Digital Transformation

A majority of IT cloud adoption projects don’t fail due to technical problems. While a company may choose vendor software that doesn’t fit their needs or a particular platform might not deliver on advertised functionality, these problems aren’t as common.

Rather, the greatest risk for failure or sub-optimal result is actually on the people side of the equation, not the technical side. Humans thrive on praise and instant gratification, including the smartest and most dedicated individuals. Trusted with a high-stakes project like an IT digital transformation, they tend to overthink and stress, focusing too much on perfection than progress.

Risk of Perfection

When this occurs, it can push project team members into three common traps:

1. Choosing a solution based on the up-front cost
2. Trying to people please and make everyone happy
3. Limiting scope and complexity for a quick win

A third-party IT consulting team can help you correct these problems, but it’s important to choose the right one. The truth is that most IT project consultants simply aren’t focused on meeting the needs of the current marketplace.

Risk of Not Meeting Needs

As a result, most IT digital transformation developments go bust. There can be several reasons behind this disconnect, including:

• Product owners who receive little guidance
• Difficulty predicting what users actually want
• Development problems that aren’t identified or remedied until it’s too late
• A lack of planning
• Resource underestimation
• Failing to manage user expectations

Our team can help you identify the red flags occurring in your IT project. We’re committed to helping companies end their implementations on a successful note, even if they veer off-course along the way.

How Quazic Creates Winning Digital Transformation Strategies

At Quazic, we understand that IT digital transformation projects can go wrong. However, we don’t let that stop us or our clients from achieving a successful go-live.

We can implement 90-day goal strategies to ensure your project stays on track. Along the way, we’ll address ongoing challenges through our proven methodology.

Our success is driven by the key values that we uphold during each project. We’ll work with your team to assist with:

• Resource management
• User expectation management
• Tweaking at the end of the project
• Sufficient Testing

We know that successful digital transformation projects are those that meet the original goals and business intent defined in the early stages. The decisions you make today will affect your outcomes tomorrow.

Contact us today to learn more about the digital transformation services we offer, and together, we can help your enterprise find long-term IT success.