Why Digital Transformation Projects Fail -- And How to Avoid Calling for a Bailout

My teenage boys love playing the “Would You Rather” game - making me choose between one dire situation versus another. Here’s a game of “would you rather” that I often see my clients play -- though of course they don’t realize they’re playing until it’s too late:Would you rather…

• Pay a small percentage of your overall project costs for a consultant to help guide your business transformation initiative…
• Or rely on your implementation vendor to manage your project for you and end up slipping go-live by 6 months, paying additional fees to the vendor and then more fees to a consultant to help you figure out what went wrong and come up with a plan to rescue the project?

In hindsight, the choice is stark and the decision ought to be easy. But I lead a fair number of project bailouts, and I know that it’s not that simple.Executives don’t have the benefit of hindsight when beginning transformation initiatives.  Often they are converting data and processes that have been in place for 10 or more years, so they don’t understand what moving off a legacy system can entail. Underestimating the complexity of the transformation often causes a cascade of shortfalls -- teams tackle the transformation in good faith, but find that they lack the expertise, time, and resources they need to execute effectively.Failing to account for these difficulties in the migration process can cost hundreds of thousands of dollars (not to mention team morale and staff turnover) and require outside consultants to rescue the project.

4 Questions To Ask Before You Start

Leaders must thoroughly evaluate where their organization is positioned currently and what the desired transformation will require in terms of resources and skill-sets.They should ask these questions before every project:

1. Do they have the skills in-house to assess and lead the transformation? 
2. Do they need an outside perspective to help them see their blindspots?
3. Have they validated the vendor’s proposed strategy, and do they have a realistic plan to execute?
4. Do the impacted teams and divisions have sufficient bandwidth to execute this transformation?

Digital transformation projects are far-reaching endeavors. The difficulties of migrating operational business processes and legacy data to a new application will challenge a project team to dig deep, be thorough and detail-oriented, and make some unexpected concessions.Complex system migrations can be delivered on time and on budget -- but only with ample awareness of the full complexity of the project.  Set your team up for success by building in sufficient time, expertise, and resources to deliver the project well.