When an innovation project is implemented within the company, including technological projects, it is inevitable that in most cases there are differences between what we expected to obtain and the final result.

Digital transformation projects are no different, and often the results do not exactly correspond to the expectations generated during the pre-implementation phases.

Logically, these differences depend on how realistic the initial forecasts were and the analysis carried out on the environment, barriers and risks of the project.

A study carried out in 2018 by Harvard Business Review with the collaboration of the EXL consultancy firm based on a survey of more than 800 participants from different levels of responsibility, sectors and sizes, analysed these differences and how to deal with them.

What is digital transformation?

It is not possible to have a clear picture of what is going to be achieved with the digital transformation if you do not first understand what it consists of. For many people, digital transformation is nothing more than the creation of new digital channels and the implementation of technology to support them.

However, the real digital transformation goes much further. It is a strategic change that affects all business processes, the organisation and the business culture.

In its analysis, Harvard Business Review defines digital transformation as “the application of certain digital capabilities to processes, products and services to improve efficiency, increase customer value, manage risks and bring to light new opportunities to generate income”.

If it is not approached with a global vision, it is possible to achieve specific improvements in different areas, but it will be difficult to achieve all the benefits promised by the digital transformation.

According to Nagaraja Srivatsan, Executive Vice President of EXL, “a successful transformation requires digital intelligence, which involves a perfect combination of domains and data, talent and technology, to create the context necessary to enable successful client relationships. It is in this context that companies find opportunities to improve the customer experience, create products and services more intelligently and increase their profitability.

Technology must be a means, not an end

The problem with many organisations is that they launch into the incorporation of technological tools without first doing an in-depth analysis to identify the challenges they face, define a realistic objective and only then seek and implement the appropriate technology to achieve those results.

Moreover, these processes are often carried out in isolation, in departments that function as silos and without an overall strategic vision, which, in the long run, produces inefficiencies and friction between the systems implemented, higher maintenance costs and poorer results.

This does not mean that the transformation must take place simultaneously throughout the organisation. Companies that excel in digital implementation generally select a critical area to focus on and experiment. The important thing is that these tests are not carried out individually and in an uncoordinated manner throughout the company, but are the result of a thoughtful strategy.

What companies expect

The data from this 2018 survey, taken with due care, provides valuable information that nevertheless reflects trends we often see in companies around us.

Firstly, if we look at the areas where companies are looking to improve when implementing digital initiatives, 78% are focused on improving efficiency and 75% are also focused on increasing the value of their customers. Other areas of interest are data management, customer loyalty, process automation, improved information analysis or risk management.

Results of the digitisation

Once the different initiatives in the digital transformation processes have been launched, the main benefits perceived are related to (in order from highest to lowest):

  • Improving the user experience.
  • Improved communication between value chain actors.
  • Greater and better access to information.
  • Better use of existing business assets.
  • Greater agility.
  • Greater security.
  • Growth in existing markets.
  • Cost reduction.
  • Access to new markets.
  • Higher revenues.

It is important, however, to note that only 40% of respondents said they had experienced these improvements in a significant way.

Especially in some areas that generate high expectations, such as access to new markets or the creation of higher income, the success rate is less than 35%.

Why the objectives are not achieved

What lessons can be learned by those who have launched initiatives that have not produced the expected results? The main barriers that prevent a correct digital transformation have to do with some of the following aspects:

  • Silo mentality in managers and employees.
  • Insufficient allocation of resources.
  • Lack of internal experience.
  • Integration problems with existing technology.
  • Poor change management.
  • Lack of adequate leadership.
  • Poor identification of objectives before implementing the technology.

Linking to the definition we have made of the digital transformation, it is important to note that the major causes of failure are not related to technology but are attributable to cultural and organisational causes.

Focusing the digital transformation processes correctly, clearly establishing the results that are expected and aligning the whole organisation with the project can help enormously to improve the results and obtain the maximum benefit from the technology for the company.