Three big digital transformation mistakes
Digital technologies such as artificial intelligence, robotics and machine learning are promising big changes to the energy, chemicals and resources industry. To prepare, many businesses are embarking on digital transformation programs to enable their organisations to reap the benefits. However, according to a recent study by Advisian Digital, the pathways to success and the benefits that accrue from digitalisation are not as clear. There’s a lot confusion, failings and false starts.
But there’s always something we can learn from our mistakes, and other people’s too. Global Digital Transformation Director at Worley, John Pillay, spoke with experts and peers across multiple industries about the top three digital transformation mistakes they’re seeing — and how to avoid them — to help you with your digital transformation journey.
“Many executives are learning that digital transformation is harder to pull off than a typical change program,” says Pillay. “Digital is always on the move, which can get overwhelming. But it also makes it even more important to get the basics right, rather than over complicating an already difficult transition.”
Mistake 1: Forgetting who the technology is for
It’s obvious. But it’s also a common mistake when it comes to digital transformation. Companies are still overinvesting in technology and underinvesting in change management and communications.
Blockchain. Machine learning. Robotics. All can offer significant benefits to the energy, chemicals and resources industries. But if investments aren’t made in change management and communications, employees don’t know what’s going on, new technologies aren’t adopted, and changes don’t stick.
How to avoid this:
“This is a familiar pattern and one that’s seen across multiple industries, but it keeps happening,” says Pillay. His advice? Involve the people who will use the technology from the start and listen to their feedback.
“When Worley first started its digital transformation journey, we implemented technology that made five people’s jobs easier and 5,000 people’s jobs harder,” says Pillay. “We have absolutely learned that digital transformation needs to work with the company rather than against it. Challenge your assumptions, think carefully about unintended consequences and work hard on engagement.”
Pillay also advocates for a ‘purpose-led transformation’ approach. “Start by asking ‘why does the world need our company?’ and use that to map out the future and the role you play in it. By setting an anchor point like this, you start a conversation around how people can influence the transformation at a personal level and connect them to the bigger picture.”
Mistake 2: Not having the basics in place
Digital needs data. But data quality and data management fundamentals are often bypassed, with many companies getting distracted with eye-catching dashboards and artificial intelligence ‘use cases’ without having the basics in place. These initiatives have limited impact if the data is inconsistent and if data sources can’t be identified and brought together.
How to avoid this:
“Conduct a data audit of your organisation and establish an agreed strategy for data,” says Pillay. “Get a clear and honest picture of the current state of your organisation. And if it isn’t good enough for what you need, then invest in building a data infrastructure that’s fit for purpose and capable of supporting advanced data uses such as artificial intelligence and machine learning.”
But building an integrated data platform can take years to do. “We’ve seen customers recognize that their asset data is poorly organized. However, they become overwhelmed by the apparent effort to fix it and so they don’t get started at all,” explains Pillay. “That’s why a release-based, incremental build out works well in many cases — start small, but always with the bigger goal in mind.”
Mistake 3: Creating the illusion of digital
All too often, digital transformation programs create an illusion of digital progress, but nothing meaningful has changed in the core business.
A common trend is for organisations to create their own digital laboratory or even a separate corporate entity to experiment with the latest technology and show the core business how ‘digital’ is done. However, it rarely works out that way. For the most part, they’re often disconnected from the business, refuse to scale and rarely offer insights beyond what you already know.
How to avoid this:
Pillay warns to not get too caught up in the ‘theatre’ of digital.
“Start your digital transformation program by mapping out your central business processes, then identify how and what digital technologies, innovation and new ways of working can improve these processes or remove them completely. That’s where the real impact of your digital dollar lies,” he says.
“Unless you’re giving up on your core business, the connection between the digital business and the rest of the organisation needs to be strong and well maintained. Have innovation incubators but set specific targets and key performance indicators for integration — and make sure the digital team sticks to them.
“Digital transformation needs to be everyone’s business.”