Digital Transformation Success Hinges on Effective Change Management

JOHANNESBURG, South Africa — August 14, 2023 — Organisations seeking to unlock efficiency and optimisation gains through the deployment of new technologies run the risk of having their digital transformation efforts undermined through poor user adoption.

This is the view of Valencia Karageorgiades, Technology Architect at SAP Africa, who says implementing new software within an organisation is a major undertaking that requires a significant investment of time, effort and resources.

“While the software itself plays a vital role in modernising operations and enhancing efficiency, it is equally important to pay sufficient attention to the human element of digital transformation. This requires appropriate and ongoing investment in change management, training and processes to ensure the technology investment delivers the desired outcomes.”

Digital transformation spend to double by 2026

Investment in digital transformation initiatives continues to grow as organisations increasingly recognise the need for improved efficiency and enhanced innovation capability. Data suggests total global spend on digital transformation will more than double between 2022 and 2026, reaching $3.4-trillion by 2026.

“Organisations are investing more than ever in technologies that unlock new opportunities and efficiencies, and help drive the business forward,” says Karageorgiades. “In light of a challenging global business environment, such investments can help organisations stabilise their supply chains, improve their hiring and talent retention efforts, unlock new markets and optimise spend, all contributing to the overall success of the business.”

Improved change management needed

However, despite the significant investment in digital transformation projects, fewer than one in three digital transformation initiatives succeed, according to McKinsey data.

“Poor change management is often a major contributing factor to poor outcomes with digital transformation,” says Karageorgiades. “Global research indicates that half of all change management initiatives fail, and only one in three are clear successes. Organisations can therefore make a marked improvement in the quality of outcomes from their digital transformation efforts by investing in effective change management.”

Appropriate investment in change management skills is also required to ensure the business has sufficient capability to drive successful digital transformation outcomes. Research conducted by SAP Africa found that only 18% of African business decision-makers consider change management as an in-demand skill in their organisation.

“Organisations must take steps to build sufficient change management expertise and capacity to support technology investments and unlock the immense benefits of their digital transformation project,” says Karageorgiades. “Understanding and following a few best practices can go a long way to enhancing organisations’ change management efforts.”

Karageorgiades recommends organisations follow four best practices to enhance the quality of their technology implementation and achieve positive business outcomes:

1 Focus on process efficiency

While software can automate and streamline various processes, Karageorgiades says it is crucial to first establish well-defined processes for your business before implementing the new technology.

“Rushing into software implementations without first assessing and optimising existing processes can lead to organisations duplicating those same inefficiencies and outdated practices. Instead, organisations should take time to identify bottlenecks, eliminate redundancies, and align with industry best practices through the use of best-practice templates and other tools.”

2 Train, train, train

The success of any software implementation project relies heavily on how users adopt the new tools and capabilities. “Even the most advanced software will not deliver the intended benefits if users do not embrace it. Training is critical to facilitating user adoption and improving the confidence of employees with using the new system.”

Karageorgiades adds that, without investment in comprehensive and ongoing training, employees may not understand the software’s features, functionality and benefits. “By equipping employees with the necessary skills and knowledge, organisations empower their workforce to handle any issues that may arise, reducing the chances of costly errors or downtime.”

3 Seek a smooth transition

The introduction of new software brings about significant change in an organisation’s processes, which can be challenging for employees. Karageorgiades says a lack of change management often causes employees to struggle to adapt to the new system, leading to resistance, lower productivity, and elevated levels of frustration.

“By engaging employees right from the start of the project and supporting them throughout the implementation and into adoption, organisations create a sense of inclusivity and excitement for the project. This can significantly improve the rollout of the implementation project, reduce the time-to-value, and increase the benefits achieved.”

Karageorgiades adds that effective change management requires a clear vision, ongoing involvement from all layers of the organisation, and sufficient support throughout. “A CIO that invests a sufficient amount in change management can deliver their projects on time, within budget, and with the added benefit of a fully-engaged workforce that has embraced the new capabilities and can drive the business strategy forward.”

4 Sustain long-term success

Karageorgiades says the most successful modern software implementation and digital transformation projects don’t just focus on short-term goals, but rather a sustained, long-term strategy of continuous innovation and improvement.

“Organisations that can sustain their investment in change management, training, and upskilling can ensure they maximise the benefits from their investment. By fostering a culture of learning and improvement, and removing the fear of change, organisations will be better able to evolve with their technology investment and more easily capitalise on emerging opportunities.”

Overall, investing time, effort and resources in change management efforts ensures a smoother transition, maximises user adoption, streamlines processes, mitigates risks and sustains long-term success. “By recognising the importance of these elements and incorporating them into the implementation strategy, organisations can unlock the full potential of their technology investment and drive meaningful business outcomes,” says Karageorgiades.