Why Change Management is The Key to Digital Transformation
Digital transformation is key to surviving in today’s rapidly-moving business landscape.
For your organization, this might mean introducing new digital technologies, updating your processes to improve employee communication, or identifying opportunities to expand into lucrative new markets.
A successful digital transformation can boost your productivity and your profits. However, there’s evidence to suggest that up to 90 percent of digital transformation initiatives fail.
At Systems Assurance, we’re convinced that change management is the key to successful digital transformation. In this article, we’ll explore what change management is, and the role it has to play in successful change management. We’ll then set you up for success, by sharing a five step plan for applying change management techniques throughout your digital transformation initiative.
By the end of this article, you’ll know how to boost key stakeholder buy-in, encourage employees to embrace change, and give your digital transformation initiatives the best possible chance of success.
Digital transformation in a pandemic economy
At Systems Assurance, we’ve spent over a decade helping businesses of all sizes improve productivity and boost their profits through successful digital transformation. However, the COVID-19 pandemic means that more businesses than ever before are contacting us for digital transformation advice.
We’re also working with more and more organizations who need to make changes fast. It seems we’re not the only ones, as 71% of technologists report that digital transformation projects that should have taken months or even years to complete, are being implemented in a matter of weeks.
With the COVID-19 pandemic continuing to affect every part of our daily lives, this rapid rate of digital transformation doesn’t seem set to change anytime soon. In fact, we’re convinced that making positive, sustainable change through digital transformation is the key to navigating 2021, and beyond.
With the stakes high, it's crucial that you get your digital transformation right. This may be more complicated that it sounds, with research suggesting that 90 percent of digital decision-makers fail due to factors such as a lack of resources, and reliance on legacy technology. In addition, only 16 percent of employees say their organization’s digital transformation initiatives have improved performance and equipped them to sustain change over the long-term.
These figures are already worrying, but there’s evidence to indicate that COVID-19 may be making successful digital transformations even more difficult to achieve - at a time when
businesses’ need to change the most! According to a recent study, 76% of technologists are concerned about the long-term impact of digital transformation initiatives that are being rushed through due to the COVID-19 pandemic.
There are many reasons why digital transformation initiatives may fail. However, at Systems Assurance we believe there’s one crucial element that can help any business achieve digital transformation success - and that’s change management.
What is change management vital for digital transformation success?
Digital transformation isn’t as simple as identifying an issue, and addressing it. You need to focus on how you’re going to implement these changes, particularly the social aspect of change implementation. This is where change management comes in.
Change management can be difficult to define, as it follows a more reactive and indefinite route than other forms of management, such as project management. However, it’s generally defined as the processes, tools and techniques that are required to manage the people side of change.
Successful digital transformation hinges on convincing your workforce to use the tools and experiences you create for them. This can be difficult, as most people are reluctant to try new things - and your employees are no exception! Change management can make your workforce feel energized and eager to buy into your digital transformation initiatives.
If your staff are motivated and enthusiastic about the planned changes, then immediately your digital transformation stands a far greater chance of success.
Change management can also help you secure the budget required for successful transformation. It’s notoriously difficult to convince decision makers to update business processes and tools that seem to be working. Although every change management project is different, they typically share some common goals:
● Improve Return On Investment (ROI) by boosting the efficiency and productivity of your workforce. This may involve implementing digital tools, and updating old processes.
● Create a competitive advantage by identifying opportunities to improve and innovative.
This may involve reducing costs, launching new products and services, or improving the quality of your existing offerings.
By putting these change management objectives at the core of your planned digital transformation strategy, you can help combat the “if it ain’t broke, don’t fix it” mentality. This can help you secure buy-in from key stakeholders, and increase your chances of digital transformation success.
How do I integrate change management and digital transformation?
To ensure success, it’s vital you apply change management principles across the entire digital transformation lifecycle. This process will look different for every organization. However, to give you an overview, here’s our suggested five step plan for integrating change management and digital transformation:
Phase 1: Prepare for digital transformation success
During this phase, you can lay the foundation for implementing positive, long-term change. During the preparation stage, you should focus on developing a digital transformation charter that articulates your business goals and strategies to achieve your desired business outcomes.
This is also the time to start documenting any risks that may hinder your digital transformation, such as employee resistance, legacy databases, and end-user adoption. You can then identify key stakeholders who can help you remove, or at least reduce these potential roadblocks.
Studies have shown that when key stakeholders encourage staff to challenge old ways of working, digital transformation initiatives are almost twice as likely to succeed. By identifying and activating these key stakeholders at the start of the digital transformation process, they’ll be in a strong position to create excitement and drive adoption throughout the entire project.
Phase 2: Build your execution roadmap
During this phase, you’ll define your execution roadmap. This includes identifying your desired business outcomes, and your requirements. You can then identify key tactics that will help drive the desired change amongst your workforce. At this point, it may help to conduct an organizational readiness assessment.
You should also concentrate on arranging these tactics to deliver maximum value. For example, some tactics may deliver a bigger impact during the pre-launch phase, while others are better suited to the post-launch phase.
You can use this information to create a more robust execution roadmap. When building your roadmap, it’s recommended you conduct regular meetings with key stakeholders and change agents. This can help you gather valuable feedback, while also ensuring these key players remain personally invested in your digital transformation initiative.
Phase 3: Create your plan - and communicate it clearly!
This is the phase where you’ll finalize your digital transformation strategy. Here, you’ll use inputs from all the previous phases and formulate a plan that’ll shape the rest of your digital transformation initiative.
According to research, digital transformation strategies that have Key Performance Indicators (KPIs) are twice as likely to succeed. Wherever possible, we recommend defining tangible KPIs during this phase.
Good communication is a crucial factor in driving change, so your plan should feature a communication component. To improve communication across all key stakeholders, it may help to use tools such as wireframes, prototypes, proof of concepts, and data modelling.
There is also evidence to suggest that communicating your transformation vision via digital channels can give your initiative a much higher chance of success compared to in-person communication. For this reason, we recommend that digital communication should feature heavily in your plan.
By communicating with your key stakeholders in a clear and enthusiastic manner, you can help ensure transparency and encourage excitement. This is essential for helping your key stakeholders fulfill their role as enthusiastic advocates for your digital transformation initiative.
When communicating with your end-users, it may help to weave your digital transformation activities into a clear “change story.” This helps employees understand how your organization is changing, why it’s changing, and why these changes are so important. Management consulting specialists McKinsey found organizations that created a change story were three more times more likely to achieve a successful digital transformation.
It’s also important to include a training component in your plan, as this maximizes the chances of your workforce using the new tools, techniques, and processes.
Phase 4: Create a shared project management environment
This is where all your hard work pays off, as you execute your digital transmission strategy. However, during this phase there’s a risk that your focus may drift away from change management.
Change management can be a vague, intangible concept. Now that you’re making concrete, tangible changes such as migrating to new tools and modifying businesses processes, it’s easy to let change management fade into the background.
During this phase, it’s crucial that you avoid the temptation to set up a separate change management workstream. Instead, it’s far better to set up a shared project management environment for your tangible digital transformation items and your change management activities.
This ensures that change management activities are included in the same planning and review sessions as your tangible digital transformation items. This is vital for ensuring your change management efforts remain aligned with the day-to-day realities of implementing digital transformation.
Phase 5: Time to launch!
This is the most critical moment for any digital transformation initiative, as it’s here where you’ll drive user adoption.
Assuming that you successfully integrated change management with your digital transformation initiative, you should be primed and ready for launch. For example, your keystakholders should have received all the training they need to drive adoption, business processes should have been updated, and measurement plans should be in-place ready to record your KPIs.
During this phrase, it’s important to monitor all feedback, and share this feedback with relevant stakeholders. This can help resolve any unexpected issues that may arise, and give you the best possible chance of implementing permanent change.
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