Scott Harkey, EVP, Financial Services & Payments at Endava
Often the pace of technological advancement can feel impossible to keep up with, but it’s vital for business growth. In the banking sector, for example, companies that have established themselves as digital leaders saw a 40-70% growth in digital sales in the past three years, while those that are lagging in digital transformation grew just 8-17%. But embarking on digital change requires more than just the right domain expertise. It demands a deep understanding of organisational dynamics, strong relationships with tech partners, and an approach that puts people front and centre.
The digital transformation disconnect
Despite knowing how important digital transformation is for business growth, the ever-evolving expectations and shifting goalposts of innovation mean that digital transformation projects often fail to live up to expectations. In fact, Endava and IDC’s “Leveraging the Human Advantage for Business Transformation” report found that 88% of organisations claim that 50% or less of their digital transformation projects met their expected goals or outcomes in the past year.
Missing the mark on digital transformation has a huge impact. Along with risking the security and continuity of key infrastructure and affecting the business’ competitive position – 62% of surveyed organisations claimed that failed digital transformation projects meant they were less technically mature and had a longer time to market then their competitors – employees also bear the brunt of digital transformation failures. 56% of businesses reportedly face frustrated staff, 50% saw a rise in staff attrition, and 44% cite a less stimulating work environment.
Employee experience is one of the areas that is most heavily impacted by failed digital transformation initiatives, but it also often holds the answer as to why these projects might have failed in the first place. When embarking on digital transformation, many businesses find themselves caught up in metrics around productivity and efficiency, forgetting that it’s the human employees that unlock the real value of technology.
39% of surveyed organisations state that a lack of employee buy-in was a key reason for failing to meet expected outcomes, highlighting how important cultural considerations are to engagement. Conflicting opinions from leadership (36%) and a lack of collaboration internally (33%) were also cited as reasons for digital transformation failures, showing just how important collaborative processes and stakeholder engagement are to digital transformation success.
Clearly, strategies that don’t anchor digital goals around people, at all stages of the journey, are often to blame for failed digital transformation projects. This creates a vicious cycle, with businesses failing to consider their employees throughout digital transformation, and then allowing their teams to feel the biggest impact when these initiatives inevitably fail.
The push for people-centricity
With recognition of the importance of people in digital transformation growing, organisations are starting to realise that investing in their growth means investing in their people. When the surveyed businesses reflected on failed digital transformation projects, over half recognised that investments would have been more successful if they had been channelled toward people-centric projects like upskilling staff (55%) and improving IT and line of business communication (50%).
Today, as the industry grapples with the rapid advancement of AI, people-centric digital transformation has never been so important. Almost half (49%) of survey respondents have already deployed AI in their organisations or are currently running a proof of concept. And these organisations recognise how important it is to unite human expertise and AI capabilities, with 51% saying it was very or extremely important to retain a human influence during AI implementation.
AI tools and automation strategies are also increasingly being positioned as a way to empower a stronger employee experience and enable human staff to work more strategically. 58% of businesses are focusing their AI strategy on eliminating mundane tasks, and 54% agree that employee engagement and satisfaction are integral in these projects.
While the survey results on digital transformation shortcomings highlight a persistent gap between the intention of digital projects and business’ ability to bring them to life, clearly there are promising employee and customer outcomes for those that get it right. Respondents cite optimisation (62%), cost reduction (57%), and revenue increases (53%) as key benefits, along with improved customer experiences (45%), an increase in employee productivity, and satisfaction and retention (42%).
The success of digital transformation is always reliant on how people will respond to new technologies and ways of working. While it’s easy to get caught up in the AI hype, it’s vital that every stage of digital evolution is backed up by a human-centric approach, understanding user needs, expectations, cultural barriers to adoption, and collaborating with employees to engage them from day one. While the digital transformation disconnect looms large, it’s encouraging to see more businesses bridge that gap by prioritising people as they shape their digital strategies for the future.
