Why so many digital transformation projects fail

It is commonly accepted that for businesses in the resource sector to survive that they must constantly evolve and transform. This transformation often comes in the form of embracing digital technologies that promise to streamline processes and systems or increase productivity and efficiencies, leading to an increase in profits.

However many businesses struggle to see the expected benefits when adopting new digital technologies, with many attempts to integrate and rollout failing splendidly. Why is this, and what can be done to avoid this failure?

We had a chat to our team, who have a combined experience of more than 60years in the Oil and Gas and Mining industries to get an on-the-ground insight into projects that succeed and projects that fail. From our observations there are 4 key elements that are critical for any digital transformation project to succeed.

PEOPLE, PEOPLE, PEOPLE

The success of your project will depend not only on the people in the team but on the overarching company leadership. Dr Sia Doshvarpassand says Company culture especially at the management level is a key part. The willingness to change and promote the change to the lower levels of a company is a daunting task that needs to be supported by the high level management.

It is critical to get all levels of management supporting the decision to embrace technology and advocating the change company wide.

Once you have buy in from upper management, it is important to build the right core team that can implement the project. Each project will require different specialties, we have put together a guide for an AI predictive maintenance team here. You may find many of the roles already exist within your organisation in different business units. Bringing them together as one unified team with a common goal is important, and if possible relocate them physically to one location. This will assist with tracking progress and scaling up the project (points 3 and 4 below).

CHOOSING THE RIGHT SOLUTION AND PROVIDER

It is important to define clear objectives for your project before seeking solutions and providers. Retrofitting a system to your objectives is the wrong approach. While this seems straightforward, many companies get excited about new emerging technologies (think virtual reality or drone technology) and want to appear as though they are leaders in innovation despite the technology being a wrong fit for their needs.

Taking the time to define these three things will help narrow down your search criteria:

• What is the problem you are trying to solve?
• What is your ultimate goal?
• What does the solution need to do or enable?

Sometimes when spending the time to define your problem statement you discover that the solution isn’t a technical one at all and a different approach is required entirely, such as personnel training.

Once you know what you are looking for take the time to research products and providers, interview them as though they were joining your team and make sure the solution will meet all of your requirements. Dr Sia Doshvarpassand says “Choosing the right platform is always a challenge. Large platform solutions like MS Azure and AWS might come across a bit expensive in the long run for mid-tier companies as well as the requirement of allocating specific staff e.g. data scientists, analyst and data engineer to maintain and operate the platform. Rising start-ups like us (VROC) provide affordable and non-complex SaaS (Software as a service) tailored around the client needs and will comprise a major segment of the future digital market.”

Some useful questions you might want to ask when researching providers:

• What is their track record?
• Is the solution customised or out of the box?
• How do they help ensure your success?
• Can they integrate with your existing systems?

There is no set pathway to digital transformation, which is why understanding your needs and objectives is critical before deciding on your digital solution.

TRACKING PROGRESS

It’s important with any digital transformation project to track your progress to see the before and after difference. This is vital for the project team’s moral as well as feeding back to upper management, ensuring they remain strong advocates.

As some digital projects can take time to get up and running, having a detailed project plan with key milestones as well as noting your achievements no matter how great or small is important. Not all achievements are financial, some achievements are based on digital adoption. Dr Sia Doshvarpassand says “Maintaining the achievements, results, pipelines etc. is a key task. Like many other industries that offer design and build, the maintenance of the plant or facility will be carried out through the operation team, an AI platform or a digital solution needs to be validated and overhauled against its reliability and reproducibility of the accurate results and regular performance.”

MOMENTUM TO SCALE UP

Having started out with a pilot project, its important to keep your momentum and not wait too long before scaling up and implementing true organisational-wide digital transformation.

Look at how day to day working practices need to change as you roll-out company wide, what additional training is required and take a look at your company culture. Does it support this digital change?

The Oil and Gas industry in particular is renowned for being conservative and slower to adopt change. In this scenario we have seen examples where front line operators who formed part of the project team share the benefits they experienced along with use cases for other business units. This way the adoption can be seen from top down and change may be embraced more easily.

To get true ROI from digital technology it is important to scale up as soon as possible. So many pilot projects fail or go dormant resulting not only in a significant waste of company resources but also affect the organisations willingness to embrace future change.

The success of any digital adoption relies not only on the technology itself but having the right team and buy-in from management. There are countless innovative technologies which are being commercialised all the time, some of these have great advantages to the resources sector, whilst others still need some time to mature before we can harness their true benefits. True digital transformation is an art – formed by the right team, right vision and right digital solution working together.