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 organizations to reap the benefits. However, according to a recent study by Advisian Digital, the pathways to success and the benefits that accrue from digitization are not as clear. There’s a lot of confusion, failings and false starts.
But there’s always something we can learn from our mistakes, and other people’s too, which is why we asked our Global Digital Transformation Director, John Pillay, to speak with experts and peers across multiple industries about the top three digital transformation mistakes that 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 we’re seeing 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 we don’t invest 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.”
“The biggest problem in digital adoption is failure to address the people aspect of digital.”
– Digital Transformation Expert, Finance
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 organization and establish an agreed strategy for data,” says Pillay. “Get a clear and honest picture of the current state of your organization. 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 clients 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 released based, incremental build-out works well in many cases – start small, but always with the bigger goal in mind.”
“Rather than ensuring the underpinning data platforms are aligned, many companies see digital as a website and or some cool technology rather than working out how to digitize in an integrated way.”
– Digital Transformation Expert, Banking
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 organizations 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. Though, 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 knew.
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.”
“Unless you’re giving up on your core business, the connection between the digital business and the rest of the organization needs to be strong and well maintained,” he adds. “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.”
“Digital isn’t just a channel for potential new business. It’s also a mindset about how business is done. It’s both culture and business transformation for the organization as a whole”
– Digital Transformation Expert, Management Consulting
Click here to find out more on Worley's digital transformation journey.
Also published in Advisian Digital's Digital Insider Magazine.