Why does transformation fail?

Financial Services have embarked on an unprecedented Digital Transformation journey in the UK, driven by regulatory imperatives, disruptive technologies and cost pressures. The majority of the CIOs believe that their organisation will “transform to re-emerge” or surge in the coming years. Complexity involved in managing the end-of-life risk and introduction of the disruptive technologies mean that Digital Transformation has become more expensive and riskier as a growing volume of investment is being prioritised to drive growth and deliver strategic ambitions. The market and customers expect businesses to launch innovate solutions to help improve services in a secure and user-friendly manner. That’s why successful and cost-effective Digital Transformation is the ultimate strategic objective across the industry. However, the failure to deliver Digital Transformation successfully results in a significant financial loss, reputational damage, dilution of customer confidence and displeasure of the regulators. Therefore, maintaining delivery confidence is highly desired by the board and the senior leadership.

There are remarkable similarities between the fundamental root causes behind failure of most Digital Transformation initiatives. Weak “tone from the top" is arguably the biggest reason of failure, manifesting across all Digital Transformation disciplines and work streams – this includes leadership’s inability to challenge overly aggressive delivery plans and not spotting a poor solution build that is unfit to go live.

Suboptimal 3rd party risk management is another significant root cause. Insufficient due diligence before selection and inability to monitor delivery quality result in major delays and overspend.

Inability to perform a holistic testing which could provide confidence as to functional and non-functional readiness of the solution results in failed releases and operational disruptions.

One common thread across most Digital Transformation failures is the absence of a value adding and insightful programme assurance activity to help identify what is not working, why it is not working and advice on how to fix it, with an aim to galvanise management to take the correct remedial actions on a timely basis.

A well-resourced Independent Programme Assurance (IPA) activity that is fully coordinated across three lines of defence can provide delivery confidence that Digital Transformation is set-up for success and delivering the desired results. This helps provide confidence to the board and leadership that risks are being proactively managed before they become an issue. An effective IPA activity starts with the development of an integrated assurance roadmap for the Digital Transformation, ensuring appropriate coverage of risks by three lines of defence – this allows a strong focus on what could go wrong and timely interventions:

Set-up for Success Review: Undertaken to assess if the Digital Transformation is on the right track during the initiation and mobilisation phase.

Continuous Programme Assessment (CPA): This helps to provide a critical review of the Digital Transformation throughout the delivery lifecycle to ensure that it is on the right track to deliver the desired outcomes and value.

Stage Gate Review: Undertaken when a Digital Transformation leads up to formal checkpoints and seeks approval to proceed to the next stage.

Go-live / Business Readiness Review: Undertaken to assess Digital Transformation’s readiness to implement solution and readiness of the business capability.

Post Implementation Review: Undertaken to evaluate how effectively the Digital Transformation was run, whether the objectives have been met and ensure benefits are realised.

KPMG UK will work jointly with clients to provide insight, guidance and potential mitigations and solutions to key challenges identified to help them move forward.

KPMG UK has a proven and effective approach to reviewing Digital Transformation initiatives, leveraging the Global Enterprise Transformation Tool (GETT) to drive pace and confidence, and help avoid the pitfalls that others have made before.

KPMG UK has market leading expertise in IPA and a depth of expertise across the industry that provide an informative perspective on Digital Transformation issues faced by organisations.

• Review expertise: KPMG is recognised as a market leader for reviewing large-scale Digital Transformation initiatives – our credentials attest to the quality of our work, deep expertise and flexible approach.

• Sector knowledge: KPMG pair this functional expertise with deep sector knowledge across industries, including: financial services, energy, government, manufacturing and technology.

The true value of Independent Programme Assurance (IPA) lies in its ability to drive positive change. Building trust is crucial to driving positive change and delivering value from agile transformation.

In the dynamic business environment, where adaptability and responsiveness are paramount, having an objective evaluation of your Digital Transformation helps you to stay on course toward achieving your strategic objectives. We help you to navigate the complexities of Digital Transformation with confidence, fostering a culture of trust, continuous improvement and innovation.

For more information please get in contact with James O’Callaghan or Jan Hameed.