Given the ever-increasing number of technologies and their impacts on all spheres of society, companies have no choice but to embrace digitalization. Without this transformation, many industries and organizations become less competitive and productive, which severely jeopardizes their future. In addition to rapidly expanding digital technologies, today’s companies face a range of social, economic and environmental issues. For example, the COVID-19 pandemic led to major changes for companies of all sizes and sectors, compelling them to quickly adapt to new realities.  

As a result, it has become especially important for companies to shift to digital, whether to remain competitive or to take on global challenges. Research conducted by the World Economic Forum measures the performance generated by the integration of advanced technologies throughout the value chain: 

  • 90% increase in productivity 
  • 100% improvement in speed to market 
  • 50% boost in energy efficiency 

However, knowing that 70% of digital transformations fail, it is crucial to do your transformation projects right if you want to achieve these performance targets. To illustrate, there are major organizations that have failed in their digital transformation and suffered major consequences.  

  • Levi Levi’s faced a number of obstacles in the course of its project (ERP implementation), including demands from one of its customers, leading to nearly $200 million in losses on a project with a $5 million budget.  
  • The Canadian government’s Phoenix pay system This project was launched in 2010 with the goal of automating the Canadian government’s payroll system. The project, however, faced problems, including the system’s operation itself, the effects of which are still being felt to this day. These problems led to losses estimated to reach $2.2 billion by 2023. 

That said, there are a number of factors that can contribute to the failure of a digital transformation project. The reality is that the project environment is becoming more complex (technologies, labour shortage, organizational restructuring, etc.), requiring rigorous risk management now more than ever. This means that in order to ensure your transformation projects are successful, you absolutely must minimize risk at every step of the process.  

The importance of a digital diagnostic 

When a technological solution fails, it’s often because the wrong one was selected to begin with. Deciding on the solution is one of the first steps in a digital transformation and this decision can, when poorly made, cause significant problems in the project’s next steps. According to an article published in Les affaires, most companies are not aware of the size of their current technological environment. An organization that does not take its own specific situation into account risks adopting technologies that are ill-suited to their needs and can end up being very expensive. Yet, digital diagnostic is an essential step to any project. The process includes 4 steps:  

1.Assess the company’s present situation This step is to identify the current business processes and pain points. It is also where you map out and assess the organization’s technological environment, including its cybersecurity and cloud infrastructure.  

2. Identify key business needs This phase is where you determine the company’s requirements and business targets, often through workshops and input from employees with different knowledge bases. This step is generally when a technology watch is conducted. 

3. Set your technological target This third step allows you to target key needs for your technology, architecture and potential solutions. It’s also when you make a technology roadmap (of budget and resources).  

4. Come up with your digital transformation vision and plan This is the step of the process where companies select the most suitable architecture and technology solutions. It’s also the time to plan the selected technological solution.  

The importance of the human aspect 

A digital transformation can also fail due to simple human error. In fact, 70% of solution implementation failures are due to human factors.  The people involved in a transformation project will naturally experience different feelings, such as anxiety, fear or anger, as the word change often sounds like uncertainty or a lack of control. These feelings are inevitable and need to be addressed to minimize risk and ensure a project’s success. This is why it’s so important to have a good approach to change to ensure that everyone can adopt and internalize it. 

1.Awareness This is the first step of the change adoption process. More specifically, this phase is for informing stakeholders like employees about the purpose and nature of the change.  

2. Desire for the change is more specific to the employees and their relationship to change. The aim of this step is to create a desire to participate in and support the change. At this stage, it is important to take note of concerns and address them, as they can lead to strong push back if ignored.  

The first two steps are essential and determine whether the project will be embraced or rejected. After all, if you take the wrong tack to informing stakeholders, it can throw everything else off course. 

3. The last phases of the process—knowledge, skills and reinforcement—come after acceptance of the change and require training stakeholders, especially on the ways of doing things, the skills and behaviours to apply and certain mechanisms for maintaining the change.  

The importance of project management 

Without adequate project management, it can be difficult for an organization to achieve its objectives. At this stage, the risks should have been anticipated and reduced to a minimum. However, poorly organizing the activities involved in a transformation project can unfortunately lead to its failure. That’s why it’s important to have the right techniques and necessary knowledge when it comes to project management. There are five basic project management processes that can be adapted to different situations.  

1.Launch: The project is formalized and takes shape in the project charter. 

2. Planning: This is the most important step. This includes planning activities (resources, duration, cost), identifying risks, implementing follow-up tools, etc. 

3. Execution: The project is carried out according to the established plan and timeline. 

4. Follow-up and control: Ongoing assessment of how the project is being implemented vs. the expectations set in the planning step. 

5. Closure: The project has been accepted by the stakeholders. This is when you issue final reports and conduct the post-mortem.   

To make your digital transformation a success, it is important to effectively manage risk throughout the customer journey. This starts by identifying a technology solution tailored to your company’s needs. To prevent a project from failing, it is also important to centre the people affected and their concerns in the transformation, as poor change management can lead to resistance to and rejection of the project. Finally, good project management ensures that your projects run smoothly and successfully.  

Our multidisciplinary team and unique approach can help your transformation projects thrive. At Talsom we use a rigorous risk management model that is applied from the very start of your project. Whether you’re at the beginning of your reflection process or at a more advanced stage integrating a specific technology solution, our teams are here to support you. 

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