Many studies show that, while companies like the notion of digital transformation initiatives, they are struggling to effectively implement these. The cause may be related to our mentality of valuing the tried and tested more highly than constant profound changes. Yet, this is exactly what is needed when it comes to initiatives that are designed to advance digital change in a company: We require a rethinking that may shake a company to its very foundation, a willingness to create something really new and a redefinition of the “why”, “how” and “what” a company does.
The first step alone is not enough
Today, hardly any company would dare to distance itself from the call for digital change. At least this hurdle has already been overcome. Until a few years ago, there were still doubts as to whether this “new fashion” would prevail at all. Now, there are at least attempts to consider the inevitable. And yet, only a first step has been taken and many digital transformation initiatives continue to fail when faced with the slightest hurdle.
Many years ago, an acquaintance in a managerial position made an effort to approach this topic in “his” company. He talked and wrote about silos, agility, change management and almost pulled his hair out because nobody wanted to hear these ideas. He was smiled at and his concepts seeped away, never to be heard beyond the management level. A few years later, this very same company is now riding high on the wave of innovative change (albeit not yet holistic change!). As such, his company stands as a symbol for many companies that are more or less willing to face up to this topic.
This is also confirmed by a study we recently conducted among 350 managers and C-level executives. Around 25% of the companies surveyed are either still in preparation or have no plans whatsoever to deal with digital transformation initiatives in any form.
The understanding that such a decisive change has to be reflected in everything and everyone in order to be successful, is usually not available.
Understanding change in depth and anchoring it in culture
The understanding that such a decisive change has to be reflected in everything and everyone in order to be successful, i.e. to actually change the DNA of a company, is usually not available. Everyone means employees, departments, hierarchical levels, technical teams – the whole company – so it’s a big effort.
The open corporate culture at OTRS embraces change – and continuous change throughout the company – as an unalterable and unquestionable agenda item for moving forward. We are virtually living the change, everything and everyone is constantly on the move. This makes it easier for us to meet the challenges of digitalization. And yet we, like other companies, encounter obstacles and questions that are not easy to overcome. First and foremost is the topic of investment.
More than 22% of those addressed in our survey cited budget bottlenecks as the reason why digital transformation initiatives are not being achieved.
#1 First on the list of the three biggest errors when implementing digital transformation initiatives is limited financial resources, either because investments are not considered necessary, are actually limited or were not budgeted accordingly.
In fact, the costs incurred here are not so easy to calculate in advance. This is why it is important to carefully assess the extent of the changes required and the associated financial impact. Above all, one must plan for the long-term.
Variables, which may include core elements such as
- cross-departmental cooperation,
- increased culture-building and corporate communication efforts,
- Implementation of appropriate tools and their optimization,
- the time required by all for measures to become effective, and
- a sometimes temporary decline in productivity
must be taken into account.
For example, at OTRS, we have our own budget for cross-departmental collaboration on projects which gives us the freedom to implement measures and initiatives that are essential to our digital transformation. We have set up a playground to pave the way for innovation and creativity, and above all, we have budgeted for it. Here, employees from different departments work together proactively on various topics of interest. Such “financial open spaces” are helpful, especially when it comes to actions that cannot be precisely defined in advance.
Fortunately, a positive attitude can forged by revising the company's guiding principles so that they reflect the mission and culture of a company willing to change.
#2 Second on the hit list of errors is not involving employees in the change process
More than 17% of the respondents cited resistance to change or corporate culture as one of the most important “obstacles” to initiatives related to digital transformation. This underlines how important it is to win employees over when change is needed. Without integrating the workforce into the change process, it cannot succeed. Digital transformation is not just about introducing digital processes or software.
Organizations in which change management is not the normal order of business would do well to take care of this issue. Resistance is often the result of worry about excessive new demands or even large-scale staff reductions.
Fortunately, a positive attitude can forged by revising the company’s guiding principles so that they reflect the mission and culture of a company willing to change. Additionally, the repeated company-wide dissemination of these core culture statements helps to involve all employees and reduce resistance.
When redesigning the OTRS mission statement, we integrated all employees and demanded active feedback from them. After all, this exercise is about everyone identifying with the new way in order to be able to make a positive contribution. To this end, we have clearly formulated our goal, communicated it and ensured that it can be understood by all.
Last but not least, our study cited a lack of knowledge and skills as the reason why the goals of digital transformation could not be achieved.
#3 Skills are number three on our list of reasons why digital change fails.
This is not surprising, as most companies are accustomed to adjustments and changes, but usually not in such a comprehensive framework. But that’s what digital transformation initiatives are all about. And these require the ability to plan, structure and then implement change processes step-by-step while using the right methods, tools and an appropriate communication strategy.
It can be helpful to implement the position of a Chief Digital Officer (CDO). The CDO should have exactly the right set of skills and experience to analyze complex systems and define and implement suitable measures. Of course, these tasks can also be performed by an external consultant. Either way, a professional view of the overall picture is important and advantageous.
The positive effect of all these measures has also become visible in our survey! While tackling tasks like rethinking the customer journey, improving efficiency through automation and processes, or outlining new services to incorporate technological advances can be challenging, it is clearly well worth it once begun. This is proof that digital transformation is not only an indispensable change for companies, but is also worth the effort.