Why do digital strategies fail?
“Where did our digital strategy go wrong?”
Operators of large assets usually ask themselves this question having spent millions of dollars on M&T projects that fail to deliver the operational efficiency gains they expected.
The answer is pretty straightforward in my experience: digital strategies usually go wrong because nobody fully understood what they were spending their money on in the first place.
Many costly mishaps could be avoided if operators understood the basics of digitalisation better, and adopted a sensible pilot approach to scaling out on their assets. However, for those who have already begun their digitalisation journey, here are some early warning signs that your digital strategy might not be on the right track.
Signs of trouble
A major red flag is when an asset operator has multiple competing technology pilots on the go, but none of them seem to be scaling out successfully, if at all. It’s what technologists call ‘development hell’ because there’s no end in sight. This is often the result of an operator being taken in by flashy demos that look impressive but lack real-world validation and are destined to disappoint.
Another sign is when paper processes are being migrated onto databases without those processes being changed or improved in a meaningful way. Performing exactly the same process using a screen instead of a clipboard and pen does not deliver meaningful efficiency gains, and certainly doesn’t count as having ‘gone digital’!
A third symptom is when operations quietly ignore or work around your digital strategy. Having been let down before, many project or operations teams roll their eyes at the announcement of yet another digital initiative. Given half a chance they will revert to familiar engineering processes and systems, causing your digital strategy to lose traction and fizzle out.
Perhaps the most worrying symptom of all is upset shareholders. They see that their investments in M&T are not delivering the improved capital discipline they hoped for. Those missing savings were probably earmarked to finance energy transition. This is not a situation that any C-suite executive wants to find themselves in.
If digital strategy executives haven’t grasped how digitalisation can be made to work in the real world, then operations won’t either. This issue cannot be understated.
Most operations and projects people associate efficiency drives with smart procurement or somehow getting people to work harder. These strategies have usually been done before and suffer from diminishing returns. The challenge for digital strategy groups is to overcome that scepticism and persuade operations that enabling people to work smarter rather than harder is the way to go. Persuasion starts by explaining the basics of what data insights are, and what they can do for operations on a practical level.
All too often however, digital strategy departments look for a shortcut. They assume that spending money on a household name technology will de-risk the digitalisation journey and give them a free ride. In reality, the best results are often delivered by younger and more innovative technology businesses who will be looking to develop a collaborative relationship with you.
Ultimately there is no shortcut. Each step of the digitalisation journey needs to be understood by everyone involved and then executed according to a sensible plan. If any of those steps are missing, there’s likely to be a blockage in your digital strategy. People will lose faith in what is trying to be achieved, which kills momentum.
People get forgotten
Developing shiny new technology for its own sake is a big mistake because it encourages operators to overlook the people factor.
Digitalisation is basically a tool that delivers better information to people so they can make better decisions. Those people need to understand and get familiar with the technology so they can discover for themselves how it can simplify their tasks and help solve their problems. Your digital strategy rests almost entirely on getting them to embrace a new way of working and coming up with ideas to improve it.
Time needs to be set aside for teams to safely experiment with the new approach, and for your digitalisation partner to customise the technology around their validated needs. At the pilot stage, people in operations need to be given permission to solve problems in new ways, for example by collaborating around data insights in multi-disciplinary teams.
It’s amazing how often people get forgotten in the development and execution of a digital strategy.
Another classic digital strategy error is to transfer information from filing cabinets into a central data repository and declare job done. But a digital silo is not much different from a paper-based silo, especially when the data hasn’t been cleaned or harmonised to make it fit for purpose. Out-of-date, inaccessible data is not safe or useful for anybody in operations with a job to do on the asset.
If people don’t trust the data or the new system, they aren’t going to cooperate, simple as that. Before you know it they’ll revert to old habits such as calling back office for key information.
No digital workflows
People performing tasks or making operational decisions on an asset want the latest and most reliable information on hand, preferably on a mobile device. That information needs to be delivered in a way that is useful and intuitive. Digital workflows that carry real-time data insights are therefore indispensable.
Digital workflows are the ‘wiring’ that deliver information from every corner of the asset to where it’s needed in operations, which is where real world efficiency gains happen. If your workflows aren’t digital, those efficiency gains are literally out of reach.
No dynamic data
A 3D model of a physical asset is often the tentpole feature of an operator’s digital strategy. But what use is the 3D model if it isn’t equipped to handle dynamic data? Static data offers very limited opportunities for efficiency gains in my experience.
I’ve seen first hand the gulf in capabilities between a conventional 3D model showing static data and a ‘live’ digital twin that is plugged into dynamic data. It’s like someone turning on the lights when you’ve been working in the dark. The moment the digital twin goes live, people start referring to it constantly because it’s so obviously handy for figuring out a problem, completing tasks, reporting, and getting useful context for decision making.
Digital transformation is a long-term process of change that is bound to meet resistance in any large organisation that is not fully aligned.
Resistance to change largely comes down to silos. It might be busy people who prefer to stick with their private spreadsheets. It might be a contractor whose revenue is threatened by efficiency gains. Or it might be a centre of excellence that doesn’t welcome transparency or accountability. In most cases, the forces of inertia will portray digital strategy initiatives as high risk, disruptive, or somehow impossible to implement because ‘that is not how things are done’.
Breaking down silos is the path to successful digital transformation. In its simplest terms it’s about getting one team to understand what the other team is doing. And it needs to start by addressing the disconnect that separates digital strategy groups from operations. Solving that disconnect will make the link between capital discipline and operational discipline a non-event, which is when efficiency gains can really start to flow.
Start with an easy win, show that it can be done, and then keep going.