Around the world, businesses of all kinds are facing disruptions as a result of greater competition, changing market demands and accelerated technological advances. In response to this threat, they are increasingly recognising the need to have a robust, customer-centric digital strategy. For many, the successful execution of such a strategy hinges on digital transformation – the integration of digital technology to enhance the customer experience, improve organisational performance and uncover new opportunities.
“Our customers are the driving force behind our digital strategy,” said Alicia Aitken, who leads the transformation and change capability at ANZ, one of Australia’s leading banks and a Project Management Institute (PMI) partner. “Putting the customer at the heart of everything we do begins with understanding what our customers truly need and want, not just today, but tomorrow.”
Getting started
A digital transformation can encompass everything from redesigning the external user experience to updating IT systems, internal processes and technologies. In an interview for PMI’s podcast, Projectified with PMI, McKinsey & Company Senior Partner Anand Swaminathan stated this is an important journey for organisations, noting how it can “fundamentally change the way they will operate in the future to better serve their customers and better manage their employees and to really drive their organisation into a more effective and successful organisation in the future”.
Unsurprisingly, a recent survey by Forbes Insights and Hitachi confirmed that digital transformation is the top strategic priority for half of all top management. According to Accenture’s Digital Transformation in the Age of the Customer report, improving the overall customer experience is a top priority for companies and a main driver behind their digital transformation ambitions. This shows a growing awareness that customer experience is critical to an organisation achieving its ongoing strategy.
Improving the overall customer experience is a top priority for companies and a main driver behind their digital transformation
“We’re finding the forefront of digital transformation is the voice of the customer – the end customer,” said Jim Boland, leader of IBM’s Project Management Global Centre of Excellence. “One challenge is how do we get our client to put themselves in the shoes of their end customer?” Organisations must continue to deliver the value and experiences customers demand and expect, while making ongoing real-time changes in customer-facing environments and activities.
Understanding challenges
Organisations undergoing digital transformations know this process presents several unique challenges. Adding to the difficulty of digital transformation is that large, global organisations, such as banks and other financial services companies, often have legacy technology and ingrained ways of doing business. They also tend to have third-party partners that add to their complexity and thus make them vulnerable to disruption by smaller, nimbler, digitally orientated start-ups. Such start-ups are able to execute a digital strategy without the need to focus on a digital transformation.
While successful strategy implementation has always been of critical importance, it takes on greater urgency when it comes to digital transformation. These complex, wide-ranging initiatives are essential to a company’s ability to compete. Even businesses that don’t think of themselves as hi-tech or digitally orientated can’t ignore customers’ demands for digital engagement.
Organisational strategies are successfully implemented through effective portfolio, programme and project management processes. Organisations that make use of project management can hope for greater success in their digital transformation strategies. That said, many companies are still wasting money on projects.
The most recent research from PMI’s 2018 Pulse of the Profession survey shows that, on average, global organisations waste €99m for every €1bn invested in projects – a slight uptick from last year’s figure of €97m. In Europe, the wastage figure is even greater: of the regions surveyed in PMI’s Pulse of the Profession, European organisations reported the second-highest average waste on project spending, at €127m for every €1bn spent.
Identification, execution, sustainment
Project management – the application of knowledge, skills, tools and techniques to activities to meet project requirements – brings rigour, discipline, standardised methodology and a common language to complex initiatives. It is recommended that organisations implement several of the following project management approaches to ensure they are taking the necessary steps to achieve their goals.
First, it is important to invest in executive support for the project. This is essential, as the top driver of projects can help ensure original business goals are met. Engaged executive sponsors help organisations bridge the communications gap between influencers and implementers to increase collaboration and support, boosting project success rates and reducing risk.
Agile is a mindset based on a set of key values and principles designed to better enable collaborative work and deliver continuous value through people-first orientation
Organisations around the world report that an average of 38 percent of projects don’t have active executive sponsorship, which points to the need and opportunity for executive leaders to be more engaged in the delivery of strategy. In Europe, 46 percent of projects were reported as not having an active executive sponsor.
The complexities surrounding digital transformation demand that an organisation focuses its efforts on benefits realisation management. This collective process identifies benefits at a project’s outset and ensures they are realised and sustained once the project ends. It’s a process that occurs in three stages: identification, execution and sustainment.
In organisations with high benefits realisation maturity, 33 percent more projects met their original goals, compared with organisations with low benefits realisation maturity. And yet, globally, only 32 percent of organisations have high benefits realisation maturity. Similarly, only 31 percent of European organisations report having high maturity in this area.
Agile approaches have been identified as a key reason for organisations improving results with strategy implementation, according to PMI research. Agile is a mindset based on a set of key values and principles designed to better enable collaborative work and deliver continuous value through people-first orientation. Agile organisations are able to embrace change by moving quickly, decisively and effectively to anticipate, initiate and take advantage of change, yet remain robust enough to absorb any setbacks.
As organisations prioritise digital transformation, it is essential that they remain agile throughout the process. As Tony Meggs, CEO of the Infrastructure and Projects Authority, recently said to a PMI audience: “The increasing digitalisation of everything is leading to changes in project management techniques – in particular, the use of agile methods of delivery.”
He credits increased use of agile, with its iterative, customer-centric approach, as having been “very successful in moving us away from a previous era of mega IT disasters”. Indeed, 28 percent of global organisations have high organisational agility, while only 23 percent of organisations in Europe report the same.
Businesses are embracing continuous change based on the capacity to sense and respond quickly to changing customer and employee behaviours, needs and wants. Though organisations are beginning to evolve to meet the digital challenges faced by all industries and regions, it is essential that they rely on sound project management practices as they drive their organisations forward.