The challenges with large-scale digital transformations

Digital transformation initiatives often pledge disruptive change and revolutionary improvement. However, the reality is that these large-scale and costly projects regularly underperform. A 2021 report by Boston Consulting Group revealed a startling statistic: only 33% of Australian companies succeed in their digital transformations, 47% create some value, and 20% create limited value. These statistics are a stark reminder of the difficulties associated with large-scale transformation projects.

One significant pitfall can be the adoption of fixed budgets and timelines. A transformation project, by its very definition, is a massive undertaking with many complexities and unknowns. In such an environment, fixed constraints can morph into hindrances rather than providing the desired structure. Defining a solution end state upfront for such a large-scale project is not only an extremely difficult task but one fraught with risk.

Moreover, the rapidly increasing speed of technological advancement introduces another layer of complexity to large-scale digital transformation projects. The pace at which technology evolves is increasing, with new software and hardware solutions emerging and existing ones continually updating and improving. This relentless progress implies that, in some instances, the technologies and approach chosen at the project's inception could be outdated or less efficient compared to newer alternatives by the time the project reaches its conclusion.

Taking a cue from startups: the product mindset

To visualise an alternative, consider the methodologies employed by successful startups. These agile businesses rarely dive headfirst into massive transformation projects. Instead, they concentrate on creating a Minimum Viable Product (MVP). This MVP serves as the foundation, rapidly launched and subsequently refined based on user feedback and market demands.

This approach represents a shift from a project-oriented paradigm to a product-centric one. It envisions digital assets not as static entities but as dynamic products that evolve over time, just like the digital environment they inhabit.

At Inlight, we also advocate for "composability," a central characteristic of modern technology design and particularly relevant in our rapidly evolving digital era. Composability refers to the ability to construct, adapt, and evolve systems or applications from interchangeable building blocks or modules, much like Lego bricks.

Composable systems are designed for flexibility and adaptability, with each component or module built to serve a specific function. They can be easily connected or disconnected from the overall system via APIs without disrupting other system functions. This design philosophy allows for the fast and simple replacement or upgrade of individual components instead of necessitating a comprehensive overhaul when new technologies emerge or existing ones become obsolete.

By endorsing composability, we facilitate a dynamic and robust technological infrastructure that can rapidly respond to changes in technology trends and user demands. This approach is inherently future-proof, allowing for continuous evolution and adaptation, mirroring the pace of change in the broader digital landscape.

Embracing composability also supports a more efficient utilisation of resources. Rather than requiring a substantial initial investment into a complete system that may quickly become outdated, we can incrementally update and optimise our digital assets, achieving superior performance and competitive advantage over time.

In essence, the product approach and the principle of composability form the basis of a more resilient, responsive, and sustainable digital strategy, one that is capable of keeping pace with the digital world's relentless evolution.

Transitioning to an evolutionary product-based approach

Transitioning from a project-based to a product-based approach involves more than just a change in mindset. It also requires a rethinking of investment strategies and organisational structure. On the financial side, this evolution calls for a shift away from lump-sum investments towards iterative funding cycles. This mirrors the continual nature of product development and allows for the ongoing evaluation and adjustment of spending based on current needs and results.

Similarly, the structure and composition of teams must also adapt to accommodate this new approach. In a project-based team, members often have defined roles and work to complete tasks within a set timeline. They operate with the mindset that their task has a finite lifespan, with a clear beginning and end.

On the other hand, a product-based team has a different outlook. This team views the digital asset as a continuous work in progress that requires ongoing refinement and optimisation. Team roles are often less rigid and more interdisciplinary, focusing on user experience, functionality, and continuous improvement. This shift encourages a more holistic view of the product, fostering a deeper understanding and ownership among team members.

For clarity, we are not calling for the end of digital transformation projects. We believe they still hold a place, especially when dealing with large-scale changes, such as replacing core systems like ERPs. However, we propose a shift in perspective: rather than viewing digital transformation as a massive, one-time project, it's far more beneficial to treat it as an ongoing journey.

This philosophy of continuous digital evolution encourages us to view digital assets as living products that grow and evolve over time. It ensures that digital initiatives align with user needs and market trends, fostering long-term digital resilience and agility. This shift to an evolutionary, product-based approach is not just a strategy – it's a mindset that can redefine how organisations navigate the digital landscape.

Key takeaways

The digital landscape's pace is not merely accelerating; it's evolving, shifting, and growing in ways that render the idea of a "final destination" obsolete. In such a dynamic environment, a static approach to digital simply cannot keep up. That's why at Inlight, we champion an evolutionary, product-based approach to digital that matches the constant flux of the digital world.

• Our perspective moves away from viewing digital transformation as a finite project with a definitive endpoint. Instead, it recognises the necessity for ongoing adaptation, improvement, and innovation.
• Our digital assets, like the technologies that underpin them, should not be static but relatively flexible and adaptable. By considering them as evolving products, we can foster a digital ecosystem that is resilient, agile, and in tune with user needs and market trends.
• A cornerstone of our approach includes the principle of composability. By applying this principle to our digital products, we can create flexible and future-proof solutions that evolve with the ever-changing technological landscape. Composability enables us to keep pace with emerging technologies, easily integrate new functionalities, and maintain alignment with business objectives.

The evolutionary, product-based approach is more than just a strategy—it's a mindset. It's about viewing digital transformation not as a one-time overhaul but as a continuous journey of enhancement, adaptation, and growth. It's about creating a digital ecosystem that can withstand constant and rapid change and seize the opportunities that come with them.

If you're interested in learning more about how a product-based approach combined with composability could transform your approach to digital, please reach out to us for a chat.