Even though Digital Transformation investments will keep growing for the next years —it is expected to reach 2.8 trillion U.S. dollars by 2025—very few companies manage to get it right.
Digital Transformation is not as straightforward as many think. First, it not only involves technology, as we have discussed in this blog before. Digital infrastructure and systems are key components, but there are a lot of moving parts related to the organization and to the user itself, like an organization’s culture, business outcomes, governance, budget, content, and, of course, vision and strategy.
Focusing only on technology can make organizations own robust and modern solutions that don’t target business outcomes (so, no ROI). Similarly, not paying attention to technology will create a scenario where a potential solution doesn’t have the infrastructure to scale properly, which will kill business growth.
Digital Transformation is a very delicate balance of forces. So, what does taking the wrong approach means, and how can organizations avoid it? Here are some of the common wrong approaches we have seen in different industries and markets.
1. They Rip-and-Replace Rather Than Harness Current Systems & Investments to Drive Value
Too Much of: Focus on New Technology
What it Lacks: Focus on Organization
When it comes to Digital Transformation, companies frequently believe that a “Big Bang” approach is the way to go. After all, they want to reap the benefits of increased efficiency and agility. However, scraping the existing systems can do more harm than good.
Let’s be honest. As a business, you have already made significant investments in core technologies and systems. Over the years, these systems and applications have developed and accumulated considerable value and business logic that can’t be replaced easily. In a way, it’s the heart of the company, but only a few can reach it.
Many Digital Transformation journeys fail because, in order to modernize their applications and architecture, they rip and replace existing tech stack and workflows, breaking down processes, weaken security measures, and jeopardize revenue. Business continuity is at risk and, if not thought carefully, the cure can be worse than the disease.
So, to guarantee a lasting Digital Transformation success, you need to rethink how to leverage your existing systems and investments. Modern approaches include Rest APIs, service-oriented architecture, integrations, and Digital Experience Platforms, that can bring new life to your existing systems. Successful Digital Transformation is about being agile and methodological while bridging the old with the new to drive value to your staff, customers, and external stakeholders.
2. Their Existing Systems Tie Together Business Logic and User Interaction
Too Much of: Focus on Technology
What it Lacks: Focus on The User
Legacy systems and ERPs usually have an architecture that ties user interfaces (UI) with business logic: what’s called a “monolithic” application. Usually, this type of software focuses on back-office process automation rather than the user. As a result, changes are expensive and challenging to execute: they not only require experts and specialists to make improvements but also constrain what a user can do with the technology.
Today’s challenges however demand that companies are effective with their back-end systems. With 25% of all employees working remotely by the end of 2022, having good user interfaces for business processes is what defines today how productive a company is. Companies are only strong as their weakest link—if operations and logistics are key processes, your employees should be able to run, sprint, and scale with their tools.
Fail-proof Digital Transformation strategies deliver solutions that decouple UI from business logic, allowing for easier maintenance, testability, and evolvability. IT teams can improve UX and attend to user needs without affecting the backend systems. This front-end autonomy significantly reduces the complexity of managing your systems in the light of changing customer demands and market conditions.
3. They Deploy Best-of-Breed Digital Solutions Without Focusing on the Whole Ecosystem
Too Much of: Focus on Technology
What it Lacks: Focus on Organization & User
Implementing best-of-breed digital solutions could seem like a way to go with Digital Transformation. Yes, the best-of-breed software tends to be built on the most powerful, most modern technologies, so businesses feel confident they’re using the best tools across the board.
But an effective digital transformation is not about a unique technology; it’s about building a dynamic and interconnected digital ecosystem that supports your internal processes, staff, customers, and suppliers. It should function like a well-oiled machine, but organizations often overlook the whole ecosystem failing to attain the desired return on investment.
We always remind our clients that Digital Transformation success does not depend on how specialized a unique software is. There is no “magic bullet”—it’s all about teamwork within your digital ecosystem. Orchestrating, managing, and connecting your different technologies and tools with a horizontal approach is the road to achieving efficiency, quality, and productivity. That, and developing the right processes for the future within your organization.
4. They Disregard UX Issues for Employees and Vendors
Too Much of: Focus on Organization & Technology
What it Lacks: Focus on User
Nearly one-third of America’s workers lack digital skills to successfully perform their jobs, which poses a threat to organizations seeking to implement digital solutions.
Due to low technical fluency and acumen among employees and suppliers, dropping a new digital solution into the works can result in wasted productivity. After all, technology in itself is not helpful unless your staff knows how to operate it.
Indeed, implementing a complex solution that doesn’t consider your workforce or partners can create barriers to adoption. Again, it’s the key role of UX in business enablement: poor UI/UX design creates process inefficiencies and slows down teams, negatively impacting overall productivity and your bottom line. As a Digital-First business, you should aim to develop an inclusive design that empowers employees to act and overcome challenges in their day-to-day work.
What makes a company’s Digital Transformation a success? Understanding that Digital Transformation is not a single effort, a single area, or a single software what makes a good strategy. Your company needs to balance its forces and find the right path for your unique needs. While the organization’s culture and readiness, budget, solution vendors, and current technology and infrastructure each have a role in the journey, it is important to have the right mindset just to approach the challenge.
Becoming a Digital-First company, a company with a digital mindset, is not a matter of finding specialized software or building a custom complex solution. Begin by reimagining business processes and user experiences for customers, partners, and employees rather than investing in IT infrastructure. The organization must lead the way with a holistic strategy that touches every technology in the digital ecosystem, and that delivers early benefits to get people on board. And then, keep moving forward.
If you need a trusted partner for your journey, no matter the stage you are at, we can help you. Base22 is an experienced company that has achieved proven Digital Transformation success with global brands while avoiding costly pitfalls.