Research has shown that digital transformation projects in the APAC region are failing at a high rate – with mixed success at best.

For example, Gartner research recently published in Australia found that the success rate for CIOs running digital projects was around 48%, which analyst Daniel Sanchez-Reina said was “like a coin flip.” He called the problem the “curse of random success.”

Vishal Dhawan, APAC regional director at software company Planview, said his company serves 4,500 customers worldwide, including more than 200 in Australia and more than 50 in New Zealand. The organization recently analyzed 2,500 value streams managed through its software, revealing that companies see only 8% of their planned initiatives materialized.

SEE: Accenture finds Australian companies lagging behind in digital transformation

“I think boards and CXOs today are all saying, ‘Hey, I spent millions on digital transformation. Can someone show me what value I’m realizing with these digital initiatives?’ If you look at the numbers and the success rates, I think the waste of digitalization is quite alarming,” said Dhawan.

But as he explained to TechRepublic, organizations can improve their success rate by focusing on culture, increasing decision-making capabilities and enabling the ability to pivot.

Why do organizations struggle with digital transformation projects?

Planview has identified a number of key challenges that organizations face in pursuing digital transformation.

Lack of visibility and transparency

The work of organizations creates a “very heterogeneous landscape,” Dhawan explains. While many technology systems are implemented “for the right reasons,” he noted that executives often struggle to get a clear picture of the status of digital initiatives across the organization.

“That visibility and transparency on a near real-time basis is lacking,” Dhawan said.

Additionally, CEOs may be aware of their most important strategic projects, but often still need to request reports for updates on their progress.

“And then half the organization goes around collecting data for that project, and by the time the data gets to the CEO, the situation has already changed,” he explained. “So there are clearly inefficiencies in terms of productivity and it’s just a matter of that fundamental sense of visibility,” Dhawan said.

Difficulty adapting to changing circumstances

Companies often struggle to change their digital projects or strategy midway as requirements change, says Dhawan.

He emphasized the need for organizations to dynamically adapt or relax their strategy, change initiatives and reallocate resources in response to the changing dynamics of the market.

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“The question is, how do you have those foundational capabilities … to be able to change and refine your strategies, tactics and initiatives, you know, based on those changing dynamics?” he asked.

The rise of purely digital business models

More and more operating models are emerging that are purely digital, without starting and ending points as with traditional transformations or projects. Dhawan said banks and telecom companies are pursuing that digital business model.

“It results in a completely different mind shift,” he explains. “They no longer carry out projects. If someone is running an e-commerce platform or a mobile platform, this isn’t a typical project where you have a beginning and an end; you start a product initiative, and there is no end to it.”

This digital business model creates a range of new challenges for customers adapting to this continuous innovation model in complex organizations, such as prioritizing and reprioritizing in line with strategy, bringing together cross-functional teams on agile projects, allocating costs and measuring of KPIs.

Three ways to improve the success rate of your digital transformation

A strong culture that enables better decision-making capabilities and the ability to shift priorities in an agile manner are all factors in improving digital transformations or digital business models, Dhawan said.

1. Foster a strong company culture

Dhawan said success in digital transformation is a culmination of people, processes and technology within a business – where technology is used as a catalyst, rather than just an end in itself.

Planview sees that some organizations are effective if people and culture are the starting point.

“I think it starts with that change in mindset, the culture and the way they approach their strategy. That is the starting point. So the culture and organizational design become a good foundation,” said Dhawan.

2. Have the capabilities for objective decision-making

Recent research by The Economist for Planview, which surveyed 600 executives in seven countries, found that only 14% had confidence in their organization’s decision-making capabilities.

“It comes down to having the right set of capabilities – where you can drive a very objective-based decision-making model, especially when you look at allocating your capital, allocating your resources during a typical budgeting cycle,” Dhawan said.

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Since the demand came from all sides, Dhawan said objective approaches helped build consensus so that people were on the same page. “They should think, ‘Yes, this is the right allocation of where our company’s capital should be and where our resources should be invested for what we’re trying to accomplish.’

3. Always enable course correction for transformation

Being ready to change is an essential part of today’s digital transformation or digital operations projects.

“You need to be able to come together as a management or project team to quickly look at a data-driven, objective model for reassessing and reallocating that capital and resources that are finite,” Dhawan said.

“It’s about constantly checking how the work fits in with your strategy as much as possible and ensuring that any deviations are quickly identified, so that you can then correct course very quickly.”