Why Digital Projects Fail – And How to Keep them On Track

By spotting and solving these five key issues early on, your organization can improve the odds of succeeding with its digital projects.

If you were about to get on a boat or an airplane, and someone told you there was a 70% chance your journey was going to turn out very, very badly, would you still embark? Probably not.

But despite launching with optimism and hope, about 70% of all digital transformation initiatives fail. Why? In our work with Fortune 2000 business leaders, five red flags typically emerge early on. They’re consistent, regardless of industry or geography. How and when your organization addresses these signs of trouble will determine whether your digital projects succeed or derail.

  1. Orienting fully on the new technology stack. Any digital business must run on systems of intelligence, and this modern business platform is very different from our prior systems of record and systems of engagement. In the same way that systems of record were based on a client/server “stack” (from network to database to server to PC-based interface), systems of record are based on a new stack: cloud infrastructure, data modernization, artificial intelligence/machine learning (AI/ML) algorithms and consumer-grade software that can run on any device. While most IT leaders now understand this, many apply the new stack in the wrong way. How? By being solely tech-led (vs. business use-case-led), which leads to an over-indexing on one layer of the stack at the expense of the others. They try, for example, to build the great database in the sky or to become a “cloud-first enterprise” (whatever that means) without properly focusing on tangible business results. Such approaches often end in tears. As we learned with enterprise apps and Internet 1.0, a use-case-driven approach forces the proper implementation of the new tech stack, as all layers must work in harmony to make the solution come to life. So, ask yourself whether your digital projects (and associated budgets) are tech-led or business-led. If it’s the former, you’re headed for trouble.   
  2. Winning in the experience economy. In the industrial age, the “field of dreams” strategy was a basis of competition: “Build it (a great product or service), and they will come.” Now, quality products and services are only table stakes. The new battleground is experience; can you delight your customer in a 1:1, curated and real-time manner? This is the game the FAANG vendors have played for years, and it’s now in every sector. Competing on experience requires new operating rules for data, product management and customer management.  For example:
  • Data: Do you have proprietary data to drive proprietary advantage? Personally, this is my one-question test to understand just how digitally sophisticated a leadership team is. Digital veterans become completely obsessed with the new power of data.
  • Product management: Product management has morphed into experience management, based on the AI-driven insights generated by how customers actually use your products and services. The classic product manager of old is now an experience manager.
  • Customer management: Similar to your use of Waze or Google Maps – with the continuous next-best action suggested as you drive – the experience economy demands you do the same for your customers with your products and services.

If your team is not focusing on experience as its True North – with the associated evolution and intensity around data, product management and customer management – your digital efforts are headed down the wrong path. 

  1. Accentuate what’s always made your business great. The FAANG companies are a great example for all of us … but only to a certain point. If you hear a colleague stating, “We need to be the Amazon of our space,” you should run. Why? Because you’re not Amazon. Different industry (probably), with a different starting point, customers, competitors, regulatory context and constraints.Instead, get back to the basics of what made you great in the pre-digital era. Focus on that, and accentuate it with digital. If you’re an industrial manufacturer with a great reputation for product reliability, how does digital make you even better at that? If you’re an insurer, how does digital make your captive agents more productive? If you’re an investment manager, how do you get more personalized in terms of what you do? It seems counterintuitive, but it’s important to get back to the essence of being you.
  2. Deal with the reality of what’s bad vs. the fantasy of what might be good. Things sucking is the real mother of invention. Go after previously accepted problems in your business model to turn bad experiences into beautiful ones. Before Uber, we accepted that standing on a street corner, waving like a mad person, was the way to hail transport. No more.So, what are the “that’s just the way things are” parts of your business – be it internal or customer-facing – that are unconsciously horrible? Finding and fixing these is the fast-track to digital success.
  3. If you’re convincing, you’re losing: In assembling the right teams for your digital initiatives, don’t try to convince anyoneMove on from people in your organization who are not your advocates and allies. You know the type – they’ll talk about the regulatory reasons why you can’t change, the commitments you’ve made to other customers, that it’s just the way things are done around here. When you hear that language, just bypass them and work with a coalition of the willing.

I suggest viewing these five points as a diagnostic for your digital projects. If any resonate, you or your project could be headed for that 70% failure category. To head that off, play what we call the Google Game. Get the right people in a room and ask, “What if Google took direct aim at our business? What would we do differently to react to that?” Address the five issues above as you answer these questions to steer your digital projects toward success.

Watch a talk on this subject Malcolm Frank gave recently here. He is President, Digital Business & Technology (DB&T), at Cognizant. In this role, he is responsible for bringing together the industry’s most compelling technology vision, strategy, roadmap, capabilities, solutions, partnerships and subject matter expertise into a single integrated powerhouse.

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