Digitization project in danger of failing? – 5 simple steps for a turnaround
What causes digitization projects to fail and how can failure be identified at an early stage?
Digitization projects have a tremendous complexity that wants to be managed. No technology or data models can manage this complexity as well as people themselves. But for this to happen, people have to function well in a team. In this article, you will learn what usually causes digitization projects to fail, how you can recognize failure early on, and how you can take five simple steps to ensure that you don’t have to abandon your project.
Sometimes I hear that most digitization projects (article on this: Guide to digitization for decision-makers – More clarity in practice) are just IT projects in disguise anyway, as they were 20 or 30 years ago. The same people then assure me again and again that it is quite normal if only a fraction of the functional scope can be implemented. Exactly. The only thing that such project stakeholders create is unstable projects that are on the verge of failure.
In this article, I would like to elaborate on how you can recognize a project in trouble early on and how you can quickly take countermeasures and achieve a turnaround. In doing so, I could go into a lot of things. Data models, system architectures, user stories, Agile project development, technologies and so on. But my focus is solely on the people involved. Because that’s where the greatest leverage for project success is hidden. That, by the way, is the big difference compared to the good old IT projects from the 2000s and before. As a rule, people were not the focus. It was all about software, functions, technologies. And the rest of the energy was then sunk into project management. Only with the focus on people in the form of users, customers and other stakeholders at the beginning of the 2010s and with the establishment of the Business Model Canvas framework did the masses understand how important people are in this formula.
Unfortunately, many digitization projects still fail, which is particularly costly for German companies. That is why we are now taking a look at the most important early indicators in such projects.
Why digitization projects go awry
It should be clear to everyone that digitization projects are not a foregone conclusion. And yet you can have a strong influence on whether a project will be successful or not. You should keep in mind that people are usually the cause of failed projects.
The most important factors are these:
- Inexperienced teams
- Poor communication
- Underestimated complexity
Inexperienced teams represent a major uncertainty factor. Mostly, such project teams are first selected according to availability and then according to skills. After all, who hasn’t experienced it: even in companies with between 500 and 1,500 employees, it’s usually the same faces that you see when you start a new project. It is obvious that these teams are not brimming with experience. If you don’t have someone who can shape and lead such a team in the shortest possible time, you’re going to have a problem in the short term.
The second factor is poor communication. Again, the human factor is key here. The type of communication that takes place in your company regarding your digitization project can be well identified and derived in the communication in the project team. If the team communicates poorly, the communication to the outside world cannot be any better.
The third factor why digitization projects can go awry is due to the wrong assessment of complexity. It is almost irrelevant which of your business processes you want to digitize, you usually have interfaces in almost all business areas in your company. Finance, controlling, purchasing, warehouse logistics, HR, value creation. They are all involved most of the time. If you misjudge this complexity, you and your project team will simply be overwhelmed.
Of course, there are other influencing factors that can throw projects of this type into disarray. Feel free to write your experiences in the comments. I’m sure you can do someone else a favor by doing so.
How to recognize the misalignment of your project at an early stage
To delve deeper and show what you can do to turn your project around, we need to go into more detail about root causes. The occurrence of the following points is a sure sign that your project will soon be in trouble or is well on its way there.
1. No common goal picture
If it is not clear to you and your team what you want to achieve together, how are other stakeholders supposed to know? External service providers, your own employees, your own IT and business departments. They all depend on information from the project team. If conflicting information comes from there, no common path can emerge. Listen in on your organization early and regularly. Is everyone on target?
2. No commitment in the team
“Yes, I’m still doing that!” You expect tasks to get done. And on time. But if the common goal picture is missing, the commitment in the team cannot increase. It is predetermined and also homemade that there is less and less commitment in the team, which will drastically reduce the speed of work as well as the quality of work. It will soon come to a standstill.
3. No conflict culture
If you notice that conflicts are bubbling up subliminally in the team, but are not being addressed by anyone, be warned. The balance in the team is no longer right. And that rarely goes well. Or have you ever seen a car with three tires win a race?
4. No confidence
Now you have all the ingredients together. If there is no common goal, there cannot be much commitment in the team. The performance in the team decreases. If there is no commitment, no conflict culture can develop. The step to a lack of trust is then not a big one. The team distrusts each other. A downward spiral develops, which hardly produces useful results. The project begins to falter.
5. The disturbing noises become bigger
Be ready for anything now! It should have never come to this, but in the meantime, pay particular attention to what is happening outside the project. Because one thing is clear. Just as project success is not hidden, failure becomes visible to others. As a result, other projects are suddenly given higher priority, resources become scarce for everyone step by step, and larger milestones are more often not achieved. It is now high time to counteract this.
What you can do now
After you have gained the realization that your project has been maneuvered into a difficult situation, you must act quickly and prudently. I have listed the steps for you once and described them briefly.
1. Brake, pull over, get out of the car
The most important thing now is to stay calm. Hit the brakes and take a break from the day-to-day project business with your team. Create the space for your team to know that they need a turnaround in the meantime in order to continue.
2. Inventory and target picture
Analyze now in workshops (e.g. with a retrospective) what was the reason that you have to get out of a difficult situation in the meantime. Be honest with each other and appreciate each other. Pay attention to the things that went well so far. You will surely find something. Then work out a common goal picture on this basis. What do you want to achieve? What should have improved after digitization? You can be more specific here. It’s not just a vision that’s unattainable.
3. Team management
Look at your team and analyze what your team is missing. Are there unresolved major conflicts? Are there enough resources available? Is the team too small, or even too big? Take the right decisions in a timely manner and make sure your team is as fired up for project success as you are.
Put your communication on a new footing. Internal project team communication, as well as communication towards stakeholders, is important and a success factor. Do not underestimate this. Ensure regular communication that is appropriate for the target group. This creates transparency, and transparency reassures and motivates everyone involved.
Keep track of your development. You do not need a complicated calculation construct for this. Concentrate on the results to be achieved. How can you express these results in numbers? How can you make these numbers interpretable in easy-to-understand Key Performance Indicators (KPIs)?
When all else fails
Do yourself, your team and your company a favor. If all measures fail, then consider canceling the project. Better an end with horror than horror without an end.
This will increase your credibility as a capable manager in the company and thus the chances that the next project will also be entrusted to you.
A project stop has many facets. Planning errors are among the most common causes. So don’t let your company’s innovation capability and digital transformation fail by riding a dead horse.
Conclusion on the turnaround of digital projects
Projects are, as a rule, challenging. Digitalization projects are even more prone to failure due to their high complexity. So if you ever find yourself in a situation where you notice that something is not right in your digitization project, but you can’t yet back up your gut feeling exactly with numbers, data, facts, then take this article by the hand and calmly and prudently check where your project stands.
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