Why boards must end rigid investment cycles

Digital transformations can be complex programmes of change, but they’re a vital process for most organisations. With the continuing advances in technology, today’s digital transformation is less a one-off project, and more a continuous strategy. Yet despite many organisations adapting to become more relevant with the digitisation of processes, systems and tools, they are struggling to keep up with the pace of technology.

This means that business leaders need to reconsider their investment processes and align transformational programmes to evolving user needs to provide effective digital services.

This new continuous approach is nothing new - Gartner has been talking of ‘continuous modernisation’, as a superior approach to Gartner’s so-called “rip-and-replace”, for a few years, reducing the risk it will have on the system. The times that projects continue to go wrong are when information and application leaders lack communications in their transformation team. They might fail to make the right call to say ‘stop’ to improving or, more typically, their projects aren’t user-driven.

Taking a continuous transformational approach and building apps with users in mind will keep progress moving in the right direction but it also requires overcoming some rigid budgetary-orientated challenges.

Shifting the boardroom mindset

Organisations are exploring and pushing the boundaries in new tech, such as AI. However, budgets for transformation are often set by those not close to the project, and it is the 'in year' savings targets that drives the wrong behaviours. A complex transformational project could cost £100k to tidy everything up, and deliver an end to end solution. That might create for example £50k of operational efficiencies, however that is a yearly 'saving' on a platform that is fit for purpose for the next five years.

For change to be continuous, the outdated cycle of tech investment has to change, where boards or budget cycles view transformation as having a start and a finish. It may be that financial or other business leaders at a distance to tech, are making budgetary decisions about what level to invest in IT improvements. There will always be some stakeholders with a view of software that, apart from security updates, software only needs to be changed to support a new business feature. This results in the ongoing care of the system being overlooked.

Software continually evolving is a very different paradigm to spending two years doing a software build to digitise services - for instance, to automate forms, automate data collection, or implement an ERP or CRM. Finite projects like this have an expectation of  a completion date with no more or minimal additional investment required.

How transformations can fail

Where things go wrong, often it’s due to overemphasising the technology itself, as opposed to the organisations and people it’s supposed to serve. Giving employees, citizens and customers the right access to tech empowers them to be more productive and work with it.

Sometimes the process of taking people through transformation you get the impression that people feel a transformation has been done to them and not with them. People should be engaged in the process of designing processes and given the opportunity to share how they use systems. Collaboration is key to shaping an environment that is actually going to deliver change and enhanced value for your organisation.

A  continual modernisation approach, which is about taking people on the journey of change is the antidote. This way they feel part of designing the new digital solutions and therefore they embrace, accept and welcome them; ultimately, the transformation becomes more successful. People can be resistant to change but less resistant when they are actually seeing what is changing is improving and getting better.

We’re now seeing applications evolving to consider their users in a different way, to push digital capabilities to the max. However, the rule of thumb is, you should only do some work if it’s creating value to the organisation. Every feature should save x amount of time or improve the customer experience – you should be clearly able to define the increase in business value that’s being created by whatever work has been done.

If you’re at the point where there’s no further business value being created then this is the time when engineering leaders have to make the right call to say ‘stop’ to investing in a product that is not giving increased value.

User-driven change

If you’re aiming to offer a better service, you should be trying to make it easier for the customer to manage or self-serve and look after themselves. Ultimately, it should be about asking, “Does the customer benefit from what we’re building them?”

If you’re building a set of features that aren’t useful, you’re missing the point. Programme leaders must focus on people, understanding what it is that people want and what they find most interesting. They should use analytics to build features in a self-service portal using an MVP approach and see which ones users find more useful which will show which features to  enhance.

Growing and learning for successful change

Effective leaders always look to grow and learn – and learning from previous mistakes is vital for successful change. Crucially, this is why digital transformation must include connecting with employees and customers, taking them on the journey and finding out how they use technology in order to make it work for them.

Consumers are becoming dependent on digital and their expectations are undoubtedly shaping application development. Therefore, approaching digital transformation as a continuous improvement exercise that takes customer feedback into consideration throughout will inform the ongoing value add and direction in pseudo real time.

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