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One recent study found that 70% of digital transformation efforts fail. While this percentage seems alarmingly high, I’m not really surprised. In my experience, the most common pitfall is overemphasis on technology at the expense of the business processes the technology is meant to serve — and the people intended to implement or adopt it.
Digital transformation is a journey, not a destination. Just like you would prefer to take a swiss army knife when travelling, instead of a machete. When you focusing on just one success factor in digital transformation, it increases the risk of failure.
Digital mosquitoes and elephants
Emerging technologies promise to augment almost every aspect of our private and professional lives. It may seem like there’s so much to digitize and that’s essentially true. We can improve almost any process in any business area, from manufacturing through finance to HR by using powerful, data-based digital tools. Does it mean that we all should start doing that tomorrow?
I think the answer is, simply, “no”. We must realize that among all these business processes and digital tools there are elephants – major, strategically significant initiatives that make a big difference. We need to tackle them first. And then, on the opposite, there are many mosquitoes. If you spend your time and energy trying to chase them, pursuing every technology and gadget to digitize many, smaller things in your business… there simply won’t be enough time to focus on what matters most. I didn’t come up with this analogy, but I think it aptly describes the business case imperative in any digital transformation endeavor.
Digital transformation starts with people and mindset
Few companies will realize their full digital potential without first cultivating a digital mindset among its people.
In an age of galloping technological change it’s more productive to view digital transformation as a process or journey, rather than a fixed set of short-term outcomes or results. In that, a company culture that embraces change and values agility can be your greatest asset.
Ultimately, any new technology or digital process you adopt will only ever be as effective as the people entrusted with its implementation. You can develop the most powerful and efficient data analytics, artificial intelligence (AI) or digital simulation solution on the market. But without skilled and motivated people to implement it effectively, the technology alone won’t deliver the desired results.
Let’s take a few examples.
Why data science and data analytics fail?
Quality of data depends on people. The number one occupation for many companies is to have the right amount of data. But the real challenge, especially as we face a talent scarcity in data science jobs, is to have the right people on your side. As our Chief AI Officer, Philippe Rambach noticed in his article, “bringing in AI experts unlocks the business-relevant value of using open-source data for start-ups or limiting the dark data for experienced players”. You can acquire data, but to make it work, you need more than data science. You need field expertise and close relation with your customers. And even more importantly, data must become everyone’s business, and that requires a cultural change.
Is artificial intelligence dangerous?
Common critiques around the limitations of AI are, in reality, about human limitations. There is no good or bad AI, but there are good and bad applications of AI. It can be used to decrease the carbon emission and optimize energy usage. It can be used to create deep fakes that spread misinformation. Thus people backed with an AI corporate ethical frame, are far more important than technology itself.
No one can evade digitalization, and we are not running away
What these two examples illustrate is the intersection between people and technology in determining the success of digital transformation. Quality talent can’t succeed without the high-tech digital solutions can only go as far as the people who implement them.
Believe me: at Schneider Electric, we’ve learned this in practice.
The process of transforming a 180-year-old manufacturing firm into an AI-based business dedicated to redefining efficiency and sustainability has been more a winding road than a straight path. But at each stage of our transformation, we’ve counted on the talent, motivation, and agility of our people to make the most of the new digital tools at our disposal.
Technology will always have its limits. But it’s your people who’ll either draw or erase the boundaries and define the horizon of your digital transformation.