John White, managing director of Radical Company, looks into the four areas businesses must consider when embarking on a digital transformation project to protect against failure.
Digital transformation is a phrase which is increasingly banded around by businesses looking to digitise their existing manual processes, disrupt their market or catch-up with their competition through technology innovation. However, as with most buzzwords it has lost much of its meaning and is being overused even on projects which are anything but innovative and fail to add value to either businesses or their customers.
Flexibility should be at the heart of any digital transformation programme as taking a rigid and time-consuming approach to innovation is a sure-fire way to ensure failure. If a business spends a year writing a 2,000-page brief on the new web experience or app they require, the product will be outdated before design and production even begins.
It’s therefore vital businesses are fully aware of the combustible elements which are susceptible to change before starting any innovation projects. With this in mind, this article discusses the four areas businesses must consider to safeguard against digital transformation failure.
1. Business requirements
A year is a very long time in the business world. Senior team members come and go, new partnerships are forged and goals change – it’s all part and parcel of the corporate world. It’s therefore worrying to think many businesses spend six months to a year just on creating a product brief, without considering the fluctuating market. For example, if a company spends months creating a document detailing a payment app for a particular arm of the business only to find this is then shut down, the time has been wasted.
It’s therefore vital businesses are taking a much more flexible approach to project briefs, replacing the hugely time consuming processes currently in place with a constant collaboration model. The initial brief could instead take the form of one carefully-planned workshop which gives the outline of what is required so a design and development team can begin adding value immediately. Businesses should stop wasting time planning and start doing – taking a flexible, reactive approach will prove more cost-effective in both the short and long term. Although the initial product presented may not be perfect, collaborating to amend areas which need changing saves money and time.
Radical has experienced projects where businesses were better off financially producing four products which don’t meet the exact requirement, than spending excessively on planning and using a more traditional approach. By embracing flexibility, a product can then be created and honed to meet business requirements, rather than being outdated before the project even begins.
2. Customer demand
It’s not only businesses which are susceptible to change; customer expectations can be just as erratic. One slight fluctuation by a business or market influencer can result in an overnight change in the way customers view an industry. Take Blackberry for example, less than ten years ago it was THE smartphone manufacturer, until Apple released a touchscreen iPhone. The consumer market suddenly expected its mobile devices to be touchscreen and Blackberry is still playing catch-up now.
Customer demand doesn’t just impact business goliaths however; all companies must keep the needs of their customers at front of mind when starting an innovation project. Failing to do so can result in a product which either doesn’t resonate with the target market or is behind the times. Either outcome equates to both time and money being wasted. This can have disastrous ramifications for businesses of all sizes. This is why a flexible approach, which ensures the latest customer demands are built-in to any prototypes, is so business critical. It can futureproof innovation projects against failure.
3. Compliance
Research shows the UK economy loses £41billion a year due to increased compliance, highlighting the sheer amount of legislative change businesses face. This can be something as small as changing the way one particular report is presented to the introduction of automatic enrolment (AE) for pensions. Taking a rigid approach to digital transformation will almost certainly result in such compliance issues being missed, meaning the end result is a product which is outdated and irrelevant. If payroll software was produced which didn’t offer the option to opt out of AE for example, the business would be uncompliant and risk hefty fines.
However, taking a flexible approach to innovation will ensure compliance changes can be communicated to the development team at any point of the project. Amendments can then be made, resulting in a product which complies to the latest legislative changes, without having to rework the entire system once a ‘final product’ has been presented. Time and money will be saved, while the end-user won’t be faced with the worry of incompliance.
4. Market change
Largescale market changes can have a crippling impact on a digital transformation project if not taken into account. Look at the retail sector; it wasn’t too long ago that the high street was king but now it’s all about omni-channel retail, balancing both the in-store and online customer experience. Any retailer looking to innovate without taking the rise of ecommerce into account was left behind by the likes of Amazon, which offered vast ranges of products at the click of a button. Woolworths is a prime example; once a high street goliath but now in administration.
Flexible digital transformation can prevent such failure, as developers can react to the latest market changes and look at ways to further the product to ensure it is ahead of the curve wherever possible.
Flexibility is key to the modern business. There are so many different elements which can change at a moment’s notice which organisations must react to – failing to do so can have disastrous impacts on businesses. If Blackberry had reacted to the user experience opportunities presented by touchscreen it may still be the industry leader, while if Woolworths had realised the power of an online presence it could have been competing with Amazon rather than being a footnote in retail history.
Businesses of all sizes must be prepared to embrace flexibility and react to the latest trends when carrying out digital transformation. Ignoring such market fluctuation will result in any previous competitive advantage falling by the wayside and could even result in business failure.
By John White
Managing Director
Radical Company