In today’s rapidly evolving business landscape, embracing new technologies is more than just an option—it’s a necessity. Organizations are increasingly turning to digital transformation to streamline operations, enhance customer experiences, and boost revenue. Central to this process is the adoption of subscription-based cloud platforms, also known as software-as-a-service (SaaS), which can replace outdated systems and automate manual processes. However, the journey to a successful digital transformation is fraught with challenges. One critical factor that often determines success is the presence of experienced professionals who have navigated similar transformations before.
The Reality Check
Let’s start with a sobering reality: while digital transformation is achievable, its success rate is alarmingly low. According to McKinsey & Company, the success rate of digital transformation initiatives is less than 30%. Boston Consulting Group (BCG) corroborates this statistic, highlighting the difficulty many organizations face in realizing their digital transformation goals.
What’s Missing?
Both McKinsey and BCG offer valuable insights, focusing primarily on people and processes. McKinsey identifies several keys to success, grouped into five categories, while BCG presents its approach through “Five Truths and One Lie About Corporate Transformation.” However, both organizations miss a crucial component: **experience**. Past experience with transformation efforts is often the differentiator between success and failure.
Digital Savvy ≠ Transformation Success
McKinsey emphasizes the importance of having “digital-savvy leaders” in place. While understanding the technological landscape is undoubtedly important, it’s not the sole ingredient for success. Despite McKinsey’s emphasis on digital-savvy leadership, the 70% failure rate of digital transformations suggests a shortage of leaders who not only understand digital technologies but also have practical experience in managing complex transformation initiatives.
Being digitally savvy is essential, but without hands-on experience in digital transformation, even the most knowledgeable leaders may struggle. This is where experience becomes invaluable. Leaders who have previously led digital transformations can navigate the complexities, foresee potential pitfalls, and guide their teams more effectively.
The Importance of Formal Transformation Programs
One of BCG’s “truths” is that “You Cannot Make Things Up as You Go.” We fully agree. A formal transformation plan or program is crucial for communicating the blueprint to everyone involved. It ensures that the transformation team and the rest of the organization understand the reasons for the initiative, the goals, and the expected outcomes. It also enables effective progress measurement.
However, the absence of experienced professionals in the planning and execution phases can undermine even the best-laid plans. Experience informs better decision-making, realistic timelines, and more effective risk management.
Outsource the Experience
Experience in digital transformation can be found within various levels of an organization or with your implementation vendor. However, relying solely on internal experience can be problematic if it’s not recognized or utilized effectively. Employees with transformation experience may struggle to get the leadership’s attention and can feel undervalued, leading to potential disengagement and communication breakdowns.
Implementation vendors bring a wealth of experience but often face two challenges: their experience is typically from the vendor’s side, not as a customer undergoing transformation, and they should remain impartial advisors rather than decision-makers.
The best solution? Outsource the experience.
Why Outsourcing Experience Works
1. Dual Perspective: Experts who have been on both sides of the table—vendor and customer—understand the unique challenges and can provide tailored guidance.
2. Focused Expertise: These professionals bring focused expertise, having seen what works and what doesn’t across various industries and projects.
3. Objective Insights: External experts can offer objective insights, free from internal biases and politics, ensuring that the transformation stays on track.
4. Efficient Execution: Experienced partners can quickly identify and mitigate risks, streamline processes, and ensure that the transformation progresses smoothly.
The Linchpin of Success
The true linchpin of a successful digital transformation is a partner who is not only digitally savvy but also has a wealth of experience in formal transformation programs. This individual can bridge the gap between your team and the vendor, ensuring seamless communication and execution. They bring the necessary expertise to navigate the complexities of digital transformation, anticipate challenges, and steer the initiative toward success.
Conclusion
Digital transformation is a complex and challenging journey, but with the right experience, it becomes a manageable and rewarding endeavor. By outsourcing the experience, organizations can leverage the knowledge and insights of seasoned professionals, significantly increasing their chances of success. If you’re ready to embark on your digital transformation journey, consider partnering with experts who can provide the experience and expertise needed to make your vision a reality.
