The Tech/Cyber Industry: Have We Lost Our Way?

In small cafe overlooking the Story Bridge, two men (one a consultant and one a CIO) met with the backdrop of morning steam rising from the river, City Cat’s sailing by while Joggers and business people hustle to their fitness goals and/or offices on a typical Wednesday morning. The meeting was to discuss how the most recent digital lead transformation, lessons learned and to celebrate the successes of the program. The very start of this meeting started thusly:

Consultant Question: How did it go for you?? Was it smooth sailing like you planned?? and did you achieve everything you wanted to?

CIO answers: It was a **** show … obviously… Every time we investigated a new section of our business new objectives starting creeping into our scope, building out a program of work that was ever expanding and more complex.

Does this conversation or scenario sound familiar to you? Well over the course of the next few minutes I will detail the lessons learned from almost 100 executives who have completed or are amid completing a digital transformation. And spoiler alert there are some glaring commonalities on success and failure, as you will soon see

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Insights from almost 100 executives

Since Starting my own company, I've been fortunate to speak with so many business leader's. From CEO’s and COO's CFO's, as well as some amazing CIO’s, CISO’s and CTO's. I have been speaking to them about their digital transformation journeys. The following is my conclusions from speaking with almost 100 execs who have just finished a transformation or are almost to the end. 97 in total. (for those who love the numbers 64 of these 97 were what we in the tech industry would call ‘business exec's’ i.e. COO/CEO/CFO)

57 (again numbers, 33 of these were tech exec's i.e. CIO/CTO/CDO) of 97 total executives had completed their transformation program and the remaining 40 were at the end of their first year or well into their second year of their 2/3-year program (yes, for those of you with a discerning eye it seems most transformations are about a 3-year program. More on that later!).

One interesting piece of data is a little over half the executives I spoke with have out right stated their transformation has failed to deliver on its strategic outcomes ... (this was a little shocking when I was correlating this information). But words matter, so let’s circle back to this after we garner a little more context.

35 of the total 57 (interestingly enough, again for the numbers people out there, all of the 35 were ‘business execs’. Conversely, of the 33 Tech execs I spoke with, who have completed (at least year 1) of their transformation, over half again said they had failed to deliver resulting in further complexity being added not reduced. This is what leads me to my thought of tech could be losing its way. I promise that’s the end of the numbers for a while!

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Defining the Function of Tech and Cybersecurity within a Business

At this point I’d like to take a minute to define some ‘ideals’ for the sake of this post. Something I have questioned for years (sorry to all who have worked with me and heard this before, SO ... Many … Times…). ‘What is the function of tech and cyber security within a business??’ Seems like a simple question at first glance but ask 50 people this AND you will get 50 different definitions. So, let's Define it by boiling it down to the simplest of terms.

Here is what I have come up with, "Tech and Cyber Security exist in a business to make that business’ outcome, Efficient, Repeatable and Safe." And that’s it, nothing else.

Just a random 'what if' that came into my head writing this. What if we used this definition as an industry, I wonder how many of us would do things differently or would this thought change any of our current strategies??

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Top 5 Reasons for Failure

Now some interesting albeit scary revelations, the 5 highest and most common reasons for failure (by a large margin).

# 1. Transformation outcome doesn't meet the needs of the business.

# 2. Scope creep.

# 3. Cost blowouts/budget.

# 4. Slow to No Adoption/legacy system's not being retired.

# 5. Didn't meet saving's estimates (the ‘cloud’ is full of hidden costs. Who would have thought!).

Let’s go into these in a little more detail,

# 1. Transformation outcome doesn't meet the needs of the business.

So, this is a bit of a catch all and is always retrospective, as in after the completion of the program. But the core issue is present across the board. Lack of planning and understanding of the business objectives, forgetting our defined Tenant of existence ‘to make the business outcome Efficient, Repeatable and Safe. When we delved into these programs, we found that most of the project outcomes did not trace back to the improvement of customer outcome. Deloitte wrote a good paper on business led transformation here. I agree with everything in the first half of this post, it is SO very important to understand your business objectives and the direction of the industry the business is going. I would also like to remind anyone who is considering leading a digital transformation to please take the first 2 months of the position to work with the front line of your business and truly understand what it does, how it works and most importantly what makes its customers stay with it. This should always become your guiding light. And, a simple truth, if you can’t find a way to align what you are doing in your program to these concepts … simply … they are not important. Remember … Efficient, Repeatable, Safe!

# 2. Scope creep.

This is a difficult one to identify the main problem, sometimes it's hard to know what we are unaware of. However, to overcome this you must keep in mind 'this is always a result of poor planning'. I realize this might be a tough thing to accept, however, because of this there could be a skill gap, a technical limitation or any other issues we could deceive ourselves about not being our responsibility. Also, something that was common in most conversations I had was changes during the program due to capability enhancements from other departments like finance or HR. Best outcome here I have found is to have a 5 year not 3 year plan with mapping 'foundational' components being built to accommodate the outcome each of the other service departments want to initiate. It is also VERY healthy to have the conversation with your peers we mentioned in number one.

# 3. Cost blowouts/budget.

Number 2 and 4 are large factors in this subject. These account for 60% of all the budget blowout reasons I could find because these factors resulted in delays, rework, and overruns that inflate the project costs significantly. A little thought that was unanimous from everyone I spoke with having these issues was ‘requesting more funding from the board and shareholders, eroded their trust and confidence in our leadership and management’. This was something that was not planned for, and there for a good middle ground was never negotiated. Remember the other departments in a company are not your … customers … They are your peers and you should always work with them not for or against them.

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# 4. Slow to No Adaption/legacy system's not being retired.

This could be number 1 on this list. What I found was this can be due to a variety of factors, including lack of training and support for employees, resistance to change, and poor communication of the benefits and value of the new systems. There are some key takeaways from this and it all hinges on communication and understanding the process the people in your org use to deliver their outcomes, their pain points and how to remove them have will net you a huge win. Convenience is key to a transformation. This leads us to the final piece of wisdom I have found, if the new systems are not user-friendly or do not ‘appear’ to meet the needs of the business, this will also lead to slow adoption.

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# 5. Didn't meet saving's estimates.

This issue came up a lot and to be honest I believe it is an outcome of the previous 4. However, something that stood out here. With the exception of SaaS offerings it was found that full cloud adoption became far more costly that people expect. A number of factors for this was, the skills needed to run on premises systems were mostly the same or similar as cloud, so no staff reduction savings. There is no depreciation of asset when you are cloud only as two examples. This direction does however smooth out your spend, so it is not as forward loaded but looses out over 5 years. This is also not usually factored into reporting to the executive or board in most cases I observed.

I will be posting the next installment in this series that speaks on the lessons learned and common successes, some I teased in this post, as well as, some other interesting points that surfaced over the course of the last year of interviews.

I would love to hear from your experiences, if the top 5 resonated with you and things you have seen that adds to the success or failure of your own digital transformation.