Digital transformation offers massive benefits when it’s done right—yet you need an expert perspective. Without careful planning, you may not be able to deal with certain risks ahead of time.
How can you mitigate these risks and ensure a healthy transformation?
Here at Corsica, our digital transformation consulting team has seen it all. With 30 years’ experience, we’ve developed a comprehensive list of risks—and how to mitigate them.
Here’s everything you need to know.
1. Lack of buy-in from all stakeholders
Digital transformations come in all shapes and sizes. Some may touch several parts of an organization, while others may be more limited.
Regardless of the specific scenario, it’s essential to get buy-in from all affected stakeholders. If you don’t build and develop this consensus, there’s a risk that some people won’t adopt new technologies and processes. People may be reluctant to change if they don’t see how it supports their goals—especially if they didn’t get a seat at the table in the planning process.
The solution is to build an early coalition of stakeholders, then keep everyone fully involved throughout the project. Here at Corsica Technologies, we use a proven process for cross-functional collaboration to achieve this kind of synergy. We want to get everyone involved, speaking up, and contributing to the final outcome in a healthy way.
2. Strategy that isn’t future-proofed
Digital transformation comes with a curious twist.
You must approach transformation as a continuous initiative. Otherwise, you can end up with legacy systems and processes that worked at the time of the initial transformation—but don’t work today.
Yet if you don’t future-proof your transformation by laying a good foundation, you can end up in a tough place down the road. Here are a few situations we’ve seen before companies come to us for help.
- Custom development. Some organizations build a custom solution to address a current need without considering how to maintain, support, or iterate on the solution long-term. Many organizations look only at the initial cost and impact of building a custom solution. They fail to realize that they are now “in the software game” and need to have a robust plan to continue supporting this solution for long-term success.
- Not considering cost at scale. Some organizations select a software solution or platform without considering growth and how it will affect cost. For instance, a high per-seat price for a Software as a Service (SaaS) platform that may work well for a limited number of users, but as the number grows, so does the cost. This can make the chosen solution not viable in the long run as it becomes cost-prohibitive.
- Lack of documentation and support. In the early stages of implementing a digital transformation solution, when the teams are small, it can be easy to neglect documentation about new systems and processes and how to engage with users as they are onboarded and begin using the solution. As teams and usage grows, having a lack of documentation or support process can cause confusion and regression, forcing users to abandon the new solution long term and fall back to their old ways. (Note: We’ll unpack this more in #7 below.)
It’s challenging to manage this risk properly. You need experience, and that only comes from doing many transformations.
Here at Corsica, our approach is to lay a durable foundation that doesn’t stay static, but rather empowers future transformation. We do this with careful planning to minimize future technical debt.
3. Introducing technical debt
It’s easy to get caught up in what technology can do for you right now.
The bells and whistles are amazing, the software is state-of-the-art, and leading companies are adopting it. What could go wrong?
Unfortunately, it’s easy to overlook the future possibilities of depending on a certain technology. Lack of interoperability with other systems, vendor lock-in, and other factors can severely limit your flexibility in the future.
When that happens—when you’re wedded to a piece of technology and suffering for it every day—you have technical debt.
This is a real risk in digital transformation. But the right partner can help you think through all the possibilities and envision life in 1 year, 3 years, or even 5 or 10 years. These are critical conversations, and they need to be informed by your company’s long-term strategic roadmap. This is the best way to avoid technical debt.
4. Chasing trends without a real business case
No doubt about it, digital transformation often hinges on exciting new technologies. But every organization should examine their transformation initiatives carefully. You don’t want to chase buzzwords and trends (or do something just because everyone else is).
Does this really happen?
Unfortunately, yes. For example, many organizations are reexamining their wholesale migrations to the cloud. This technology was all the rage in the 2000s and 2010s, and this led many companies to believe the cloud was right for every use case. Sadly, the cloud isn’t right for every scenario—which has led to the growing trend of cloud repatriation or reverse migration.
We’ll talk more about unforeseen costs below in #9. But here, the point is simple: You don’t want to do something just because everyone else is doing it.
You should start with a real business case, then look for the technology that can solve the problem—not the other way around. Here at Corsica, our experts help you cut through the hype and determine what you actually need. This ensures you don’t pursue transformation for the wrong reasons.
If you don’t have a business case, you probably don’t know what success looks like either. Which leads us to our next digital transformation risk.
5. Not defining the metrics of success
Here at Corsica, we’re fans of the S.M.A.R.T. goal methodology. Every goal should be specific, measurable, attainable, realistic, and time-bound. Every one of these attributes is important, but here, we’re asking whether a goal is measurable. If it’s measurable, then by definition, you have a metric that can tell you whether you succeeded.
In this sense, a vague goal might look like this: “Launch our new cloud platform to improve customer experience.”
What does that even mean? How do you know if customers are having a better experience?
A measurable goal might look like this: “Launch our new cloud platform and increase customer interaction by 20% within 3 months.” Once you’ve defined this clear success metric, it’s easy to tell if the project succeeded.
6. Lack of cohesive cybersecurity strategy
Not all digital transformation companies specialize in cybersecurity. And if your transformation project doesn’t have security baked in, it may be difficult to foresee how it will impact your company’s cybersecurity standing.
In an effort to move quickly, organizations may sidestep security considerations as they work to connect data and systems in support of a digital transformation effort. As an example, consider an organization that’s working to develop financial reporting or KPI dashboards and must pull data from various databases and files. Throughout implementation, solution team) encounter data access issues that prevent progress and inadvertently open permissions to allow data to flow into their solution.
The solution is now working, and stakeholders are happy, but without cybersecurity oversight, the organization is now at risk of exposing financial data to employees who should not have access. Even worse, information may be exposed to bad actors outside of the organization who may use the reduced restrictions to break into sensitive systems.
We find it’s essential to pull in cybersecurity experts on every transformation project. This is one of the biggest reasons why we have diverse experts on our team—people with backgrounds in cybersecurity, IT services, digital transformation, and even B2B data integration and EDI.
7. Not accounting for training and user adoption
It’s far too easy to focus on the implementation and launch of a new system. If you can just hit that launch date, everything will be good, right?
Not necessarily.
In fact, transformations rarely fail before a system gets launched. It’s the afterlife of the implementation that really needs some thought.
How is your team going to live with the new system? Are you going to train them on it? Is it sufficient to send them some videos they can watch, or will your team need something a little more involved?
Think about adoption too. Just because a company mandates that everyone use a system doesn’t mean they will—or that they’ll use it the right way. Internal adoption and training absolutely require a plan and people to execute it.
Likewise, if there are external users interacting with the system, how are you going to train them and drive adoption? Do they know what’s in it for them? Have you created incentives and communication touchpoints to help them make the transition? What about a guided tour calling out the new features and benefits they’ll see? Maybe you need to designate “evangelists,” internal users who will bridge the gap and help drive external users to adopt the system.
The possibilities are endless. Luckily, it’s easy to overcome this risk with some foresight and dedicated planning.
8. Getting tunnel vision and missing impacts to other systems and processes
We’ve talked about technical debt, which covers the potential future impact of a transformation without good planning.
But there are potential impacts to consider in the present as well.
If you get tunnel vision and focus only on one problem, you may cause another problem. Perhaps you gain efficiency in one area through a new technology, but that technology introduces new friction in a different process or system.
In that scenario, it’s tough to say if you’re better off after transformation.
To mitigate this risk, you want to take a holistic view of all systems and processes that could be affected by transformation. It may not be obvious how transformation can create ripple effects throughout the organization, so it’s essential to engage a good partner who’s familiar with this kind of analysis. Doing so ensures you get the transformation you need in one area—while also maximizing the value of that transformation across the organization. It’s an essential component in a good strategy.
9. Looking only at the initial costs of transformation
In terms of cost, new technology may look like a great solution because the upfront investment is so small compared to the value you’re getting. But what are the details of the cost model? How do those costs play out over the long haul, in different scenarios, as the system experiences changing demands from users?
Ignoring long-term or complex costs is a significant risk in digital transformation. The solution is to conduct a comprehensive cost analysis in light of your organization’s needs—both those in the present, and those in various future scenarios.
Moving forward: Mitigating risks in digital transformation
In some cases, transformation isn’t optional. You must replace a system that has become EOL (end of life) or has outdated cybersecurity controls.
In other cases, transformation offers such incredible benefits, you don’t want to let the risks stall the project.
In both scenarios, a seasoned digital transformation partner can help you mitigate risks while maximizing the benefits of transformation. Here at Corsica Technologies, we’re passionate about helping companies become better, leaner, and more competitive—all while reducing risks through smart strategic planning.
Need help with digital transformation risks?
Reach out to schedule a consultation with our specialists.
