5 Reasons Business Digitalization Fails

Digitalization is an effective optimization tool. But without the transformation of business processes, the technical solution will lead not to a qualitative improvement in performance, but to an additional burden.

Digitalization is often positioned as a tool for quick results and direct improvements in business performance. Popular trends – robotization, machine learning, and artificial intelligence – promise an effect here and now, if you just implement it yourself.

Digitalization can indeed effectively solve problems and bring the expected results. But it requires end-to-end processes, simplification, elimination of duplications and bottlenecks, and a clear understanding of the parameters and results of the future automated process.

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reasons business digitization fails

5 Reasons Why IT Solutions Fail

An IT solution cannot independently improve business performance. At the implementation stage, it is possible to identify five factors, the ignoring of which, at a minimum, leads to a mismatch with expectations, and most often also leads to losses of investment and time.

  1. People

The key role is played by the attitude of the project participants, stakeholders and the operational team, which will continue to use the implemented solution or the changed process. Resistance to adoption and refusal to use can nullify the effectiveness of even the most innovative solution.

Therefore, even before the implementation, it is important to conduct preparatory work with the parties involved, so that everyone clearly understands the goal of digitalization and is prepared for the changes to come. Thus, change management should be a mandatory part of any project management.

It is necessary to identify all the parties involved, the main owners of the process and the decision makers of a particular change.

Often, when a project is handed over for testing or startup, there are new individuals or actual process owners who block the change because it is not aligned with them.

There are also frequent startup problems, such as automation in the warehouse, where employees simply don’t want to enter data into the systems because “they need to work, not press buttons.” Getting people right is one of the most important factors in the success of any change.

  1. Processes

Any automation must be preceded by a process workflow phase. Business often perceives the popular Agile software development as an opportunity to start a project without thinking it through. But this is the reason for endless projects with uncontrollable costs.

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Before implementation, it is worth thoroughly working through the project, taking into account different scenarios and simulate the vision of the final result as clearly as possible. This helps at the earliest stages to show what problem the project solves and to which final point to move.

In cross-functional projects, each participant often knows only one area well. Evaluating the picture as a whole is the task of working through the process from beginning to end.

Participants need to see the entire chain of steps and assess how their sub-process interacts with another sub-process. For example, if you take the process from purchase to payment, it contains many blocks – a change in any of them will inevitably affect the result of the whole process.

  1. Flexibility

Any process must generate value or support other business processes. It is important that already at the stage of project development the necessary flexibility and scalability under the changing business environment is built into the project. Otherwise, the slightest change in conditions or business structure will render the solution useless and money wasted.

Business does not stand still. Sometimes there is a shift in activity and focus even within a month. Let’s take seasonality: what works well during normal times does not fit during the period of maximum load – you need “higher, faster, stronger and more flexible.” In this regard, the system must be flexible in the changing business environment at the design stage.

  1. Technologies

The main problem in choosing one or another tool is the lack of a well-built IT strategy and architecture. Often the business is guided by “minute” impulses: cheaper, the consultant sold beautifully, and others. The result is an implementation with huge costs for maintaining data exchange interfaces and duplicated maintenance of master data.

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This can be avoided by systematic work:

  • defining IT department goals and objectives, performance metrics;
  • selection of qualified personnel who would be trusted by top management when making decisions.

The task of any business unit is to bring value, and IT is no exception. In addition to providing the entire cycle of IT tasks – from collection of needs, implementation of solutions and subsequent support – it is necessary to build an IT strategy based on the business strategy.

The role of a business relationship manager, or business relationship manager, works well for collaborative work with the business. He is the link between the business and IT and conveys the business need for project initiatives.

  1. Adaptation

The business often does not analyze the performance of a new process and the impact of its implementation, nor does it make adjustments. Without constant monitoring, the solution can lose its effectiveness and remain only a nominally working tool.

Even the currently most modern approach can inevitably become outdated, faster than it might seem. Technology advances so rapidly that it is important to always be on the lookout for innovations and to find ways to improve. If, after a successful launch, you let everything go on its own, the efficiency will run out very quickly.

A good practice is the approach of organizing working groups to evaluate the financial result, the level of product usage, and to collect analytics to adjust and adapt the solution if necessary, taking into account the return on investment period.

Increasing the Efficiency of Digitalization

Automation should make the process work more efficiently, but first you need to understand its criteria. The concept of “efficiency” has many definitions, but the simplest and most straightforward is enshrined in the ISO 9000:2015 standard – it is the ratio between the achieved result and the resources used.

Four factors influence the amount of resources:

  1. Incoming volumes, or load drivers – the number of direct shipment warehouses, customers, employees, document volumes. To optimize the process, you can reduce the number of drivers, for example, transfer logistics to a transport company.
  2. Service level. Determined through the quality and time of the task. The higher the requirements for quality and speed, the more resources are required.
  3. Process efficiency. The efficiency of the process as a whole is determined by the most inefficient part of it. To increase efficiency, it is necessary to reengineer the process – search for and eliminate problem areas, simplify, assign responsibility, identify gaps. Automation also helps to increase the efficiency of this block.
  4. Performer efficiency. Obviously, an experienced employee performs tasks better and faster than the one who came a week ago. In this case, everything can be solved through training, mentoring and transfer of experience.
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If the process works ineffectively, it needs to be analyzed and corrected. There are two ways to review business processes:

  • Detailed workshops. They take considerable time and require the involvement of a large number of participants. Most often, this approach is needed to create a new process and then automate it.
  • Quick wins method. The end-to-end process is divided into large blocks, each of which is divided into constituent sub-processes. Next, it is determined what is input and what becomes the output for transfer to another sub-process. Based on the results of the analysis, the weakest points are worked out: the quality of documents, the timing of submission, the correctness of information, the level of automation.

Author’s bio: Jean Hartley is a professional content writer for help me write my paper service. She will help you to prepare an overview, report, essay, or another paper. Jean will make you amazed with the final interesting content or any other you may have for writing.

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