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7 Reasons Why Digital Projects Fail

5 minutes July 26, 2022
Natasha Allen Director, Consultant
Your idea or digital project needs human intervention to become a reality. We have seen great ideas and intentions fail, not because of the concept itself, but the organisational capacity (or maturity) to deliver them. 

By avoiding these issues, you can succeed in your digital revolution. 

The great news? There are often practical steps, or things to be aware of from the start, that can help you avoid some of the digital project pitfalls.  

From a lack of knowledge, to the inability to take a risk, we have seen many digital projects fail before they even start. Usually from a combination of avoidable factors.

Failing at a digital project is a costly exercise. We are not talking about the dollars spent to set up and implement a new tool, but the change management process internally and loss of buy in from your team. Staff frustration can have an even more damaging effect than a partially delivered digital project. The next time you have a 'business improvement' idea, you want your team to be excited, not resistant.

Your team need to be protected from a failed digital project, which is why at Dapth, ahead of any digital project, we make sure our consultants have a chance to set the landscape. 

We don’t want a project we have delivered to sit on the shelf and collect dust. So instead, we tackle both sides - change management and digital development from the start.

It is no wonder why many digital projects fail, often the focus is too heavily on the new digital tool or solution solving the immediate issue. The change management path is ignored and organisational uptake is assumed to be a given. 

If you are finding yourself 'getting digital' for reactive reasons, rather than proactive, then pause and talk to a friend first!

1. Over Focus on Timelines Rather Than Quality

Managing and completing your digital project by a key date is viewed as an achievement. The assumption is that projects delivered on time are also delivered under cost. This creates a risk of not addressing out of scope or newly uncovered items (a typical occurrence for any digital project). 

Keeping room in a project of refinement, enhancement or additional validation is worth it in the long run. Unrealistic timeliness is one of the top reasons why digital projects fail. Often, project managers commit to tight timelines to save costs or please individuals and are left rushing things through at the end. 

Depending on the level of pre-development work (workshops and prototyping), we always suggest allowing margin of time to ensure all checks and tests are done, and that a date is important but not as much as getting things right.

2. Inadequate Awareness of Value Within Organisation

A significant part of what makes digital transformation thrive is employee inclusion. It becomes easier to realign roles and change structures if you involve people. Resistance to change is a common reason why digital projects fail. Employees may resist new technology and this may happen regardless of whether the new technology will make their work easier. 

Many organisations struggle to lead and organise people around a project and people who support your projects need to feel included and in control of their future.

It’s best to be aware of inertia and ignorance quickly leading to tech aversion. People will try to maintain the status quo in response to new processes and technology. If your employees are ignorant, you fail to help them see beyond their jobs and they aren’t buying into the needs and benefits of your projects. 

Over 80% of employees say technological change makes them anxious, which is why your digital transformation leaders should work with everyone to encourage collaboration.  Have them develop a transition strategy to help everyone understand their roles.

Identify change ambassadors who can help your team embrace new tech by hyping it. They can highlight the benefits while helping others to learn about the system and help reduce any anxiety.

3. Project Not Aligned With Business Outcomes

One inevitable thing is that every digital project takes a fair investment in resources (time and money). A challenge presented is usually clear enough, either people are complaining, or a risk has been exposed. For most though, there are multiple projects that could be addressed at any given time. The issue is prioritising, validating, and then monitoring the benefit unlocked. The easier you can showcase this for stakeholders and decision makers, the more likely they will not just approve the project, but also support it as it is implemented. 

If you struggle to explain the benefit of a digital project in financial speak, usually you will struggle to keep momentum on it. You will often see favouritism towards projects that have an obvious cost benefit compared to those that are seen as non-essential. 

4. Failure to Develop a Clear Internal Communication Process

Your stakeholders and team need updates on progress and issues, giving space for other team members to have both transparency and input, will enable them to own what is later delivered (and understand why some things are delivered, while other things are not).

The whole project suffers when your team is excluded, and information is siloed. If an adequate channel of communication is not in place as part of the project delivery internally it can lead to confusion and delays.

Resolving project communication problems often begins with setting an expectation ahead of the project, as well as roles for your key stakeholders. Another important step to take is to establish the reason for the communication and the process that will be taken, this will help to reduce friction between team members. 

We see one department lead by an individual who is more outspoken than others, often the quietest person in the room is the one you want to get feedback from. As you ask for input and feedback, it’s important that those engaged understand that it is not their project, and they do not risk derailing things or trying to take the driving wheel. 

If you ask for a meeting think about how you want it to work, and also understand it is unfair to ask for input and then simply ignore it.

5. Lack of Talent to Lead the Project

Embracing digital transformation is just a starting point. Building a committed transformation team is often a problem for many companies. 64% of IT executives cited lack of talent as one of the top reasons digital projects fail. Most agree that talent shortage is a significant barrier to adopting new technologies.

If you’re looking to leverage a digital solution to an organisational problem, you want to ensure the people driving it understand technology, and aren’t being led by a salesperson with their own bias. A weak internal digital team results in a loss of knowledge transfer, ineffectiveness at keeping momentum, and missed opportunity for continuous evolution.

Not everyone has the skills and brevity to tackle digital projects, and that’s okay! Not every CEO is expected to head up the new intranet either, but leaving your digital project to be led by an external provider is risky.  Thanks to a remote and digital environment, accessing talent may be easier, but often your team need someone onsite. 

Another great alternative is up-skilling existing employees to leverage their organisational knowledge alongside the new digital solution. The bonus is we are in a digital world, and this will also help retain staff by stimulating their minds with a fresh challenge.

6. Micromanagement of Digital Project Teams

Micromanagement is sometimes essential if you're a digital project manager - it isn't easy taking a hands-off approach when you want your team to be efficient and precise. But sometimes, micromanagement can become an obstacle in your team's way. It’s common for many digital projects to be implemented with a third party, and your team is typically already managing someone else. Micromanaging is often an inefficient way of managing digital projects.

Rather than focusing on micromanagement of tasks, transparency through reporting and documentation should be the focus. Digital moves too quickly, and is much too fluid, making a micromanaged digital project an exhausting route. These days, most projects are delivered in an agile manner instead. 

7. Lack of Trusted Expert Help

Digital transformation can be challenging. One costly mistake you can make is to think you can do everything on your own and fill all the roles internally. It’s more beneficial to have a subject matter expert to ask questions, that in turn allows you to make an informed decision. It’s also important to have access to resources that can work around and compliment your own. 

The digital industry has been led by salesmen making suggestions with their own agendas, or executives who simply want to tick a box by delivering a solution. Leaving a business in technical debt from a poorly executed project is even worse than starting it at all. 

Inexperience is a common cause of digital transformation failure paired with a lack of access to the right help. You don’t have to simply push on, the other option is to leverage consultants with a clear remit to give you guidance to make your own decision.

There have been many lessons learned by organisations as digital projects have become more open to making change. 

Why not learn from them by a team often left to clean up the mess?

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