Is Digital Returning Value

Is Digital Returning Value

What is the future for all those Digital Transformation projects that were running in January 2020? The answer is mixed and uncertain.

A few months ago, in November 2019, IDC predicted that by 2023, Digital transformation spending would eat up 53% of IT budgets!

But here we are! Only four months into 2020, and instead, COVID-19 has forced enterprises to re-write their plans and instead focus IT priorities on Bandwidth, Access, and Security to allow their employees who can, to work remotely during the crisis.

While some of the largest companies were running Digital Transformation portfolios that could be described as coordinated and strategy-driven, this was not the case for many more. For most, Digital Initiatives were more opportunistic, Department or Business Line focused, and mostly initiated by ground-up internal champions. Many of these projects were technology-focused and did not necessarily encompass real Digital Transformation.

For this reason, once the immediate Cash-Flow crisis is behind senior management’s attention, it is time to reassess ALL the Digital Transformational projects, in-progress and planned, and see if they make sense anymore. Additionally, if a coherent Digital Transformation Strategy linked to the Companies Business Plan is not in place, then now is an excellent time to correct this before making any individual project assessments.

Why is this a Digital portfolio review so timely? The facts are that despite the hype, many Digital Transformational projects continue to be failures.

According to McKinsey, 70 percent of complex, large-scale change programs don’t reach their stated goals!

While it can be generalized as to why the success rate is so low (low employee engagement, deficient management structures, and resistant culture), my research amongst digital practitioners in the Oil and Gas space point to specific failures:

  • Working on the wrong projects or starting too big
  • Focusing too early on building and filling Data Lakes that become Data Swamps that nobody used
  • Unrealized hopes that Data Science, Machine Learning and Artificial Intelligence would provide P&L gains
  • Siloed Digital teams
  • A lack of cross-functional cooperation due to organizational structures
  • Staffing with the wrong people or the wrong vendors
  • Not understanding the true funding needs
  • Too much emphasis on internal optimization at the expense of enhancing customer Value

To add to this, many of the same managers point to conflicting advice from other internal managers, IT, the Digital project teams, and the vendors. Under such conflicting positions, decision making is difficult.

The bottom line is that now is the time to get a good handle on your spending needs in Digital Transformation, based on objective criteria and against clearly articulated priorities aligned with the Business Plans for recovery and growth.

Paul Gould

Principal Consultant

Imperative Insights is an independent consultancy focusing on providing managers with a path through digital transformation uncertainty and setting them on the road to success.