Why companies fail with digital transformation
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Why companies fail with digital transformation

The HAL Moment (1): column by Christian Fehrlin



In "HAL Moment" Christian Fehrlin presents provoking thoughts about the benefits and risks of digitalization. Sometimes "HAL Moment" might look far ahead in the future. Which future are we preparing today?

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According to the market research giant Gartner, digital projects burn through well over $100 billion every year. 75% of digital initiatives are scrapped or fail to achieve success. 17% of large-scale projects get so out of hand they even threaten the existence of the company.

Why do companies fail?
Of course, the reasons are complex, but there are five main reasons.

1

Too much timeTechnology changes rapidly. Long-term projects fail time and again because technology overtakes them.

2

Too much money
Large companies invest far too much money in implementation. Small companies and startups often struggle with budget issues, but they’re more agile in implementation so they can achieve better results in a short time.

3

Too many people
Having too many people involved almost guarantees a project to fail. With too many people, it’s hard to keep priorities and unnecessary requirements creeping in.

4

Too many external consultants
External consultants rarely promote efficient implementation – at the end of a project, they’re out of a contract, so speed is not often in their interest.

5

Too much ambition
It’s exciting to think big and implement large projects. But you have to resist the all-in-one-perfect-solution. An oversized project has a higher risk of failure.

How do you minimise the risk?
Think big, start small. It definitely helps to work towards a big vision, but you have to break the elephant down into digestible chunks. Launching a big project in small pieces, quickly, can teach you a lot, and if things go wrong, you haven't lost much.
There are four principles to minimising risk.

1

Fail fast
Fail as quickly as possible. Failure is important for learning new lessons about what works and what doesn't. Learning lessons at the end of a project is extremely painful and costly.

2

Rethink processes
"If you digitise a crap process, you get a digitised crap process." Digitisation offers the potential to simplify and accelerate business processes and even discover new business models. This is not an opportunity to miss.

3

Take out the guesswork
All stakeholders have opinions and expertise, but using simple prototypes to get user feedback minimises the risk of building something users don't understand or need.

4

Get out of your way
For innovation, leaving the familiar environment is vital. Staying put means you run the risk of marketing, IT, legal or product management interfering and thinking they know better. In a project that needs to rethink processes, this is deadly.

Have you ever had a project go down the drain?
I was asked this in a presentation. No, I answered. But of course I’ve made mistakes. Mistakes are so important in any project, so you know how to fix them easily – and you don’t end up another Gartner statistic.

What are your insights? Contact Christian!

Why "HAL Moment"? In 1968 HAL 9000 was the future we are now almost living in. And again we seem to see another exponential development today: learning software, robotics, new energy sources, never expected computing capacities.

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