When Digital Transformation misses: The Insider’s view

The trend across enterprises is overwhelmingly toward digital transformation. It’s considered critical to growth if not to survival. But digital programs do miss, sometimes badly. So says, Ed Finegold, author, analyst, thought leader, and digital start-up veteran. Despite grandiose executive visions touted boldly in keynote addresses, folks with boots on the ground know all too well that vision and implementation often diverge.

In this new series we explore some of the practical reasons digital initiatives fall short, providing real-world examples of digital initiatives that look great on paper but are not viable as implemented. The aim of these articles is to offer takeaways for how to avoid late game misses at the start (or restart) of a digital initiative.

Part 1: Will your legacy mindset compromise your digital competitiveness?

Ed Finegold, author, analyst, thought leader & digital start-up veteran

Carrying legacy process, technology and thinking forward in the course of digital transformation will make it difficult, if not impossible, for new digital products to compete. Executives espouse increasingly grandiose visions of what their digital transformation efforts will deliver, but these visions are frequently compromised as they trickle down to implementation.

It is not easy to abandon what’s made an enterprise successful for years or decades. As legacy elements creep in, they can undermine transformation efforts. Projects may hit every milestone and go live, yet what is delivered is so compromised at a detail level by legacy that it is not digital enough to compete.

Brilliant CIO

Four years ago, I had the privilege of working one-on-one with a Fortune 100 CIO on an early digital initiative that aimed to transform his company’s mobility channel. It was a superb learning experience as this CIO not only foresaw but could articulate at a detailed level the pressures that his and his customer’s businesses would face as a result of digital disruption.

I led strategy for a small digital start-up at the time, which had just come off a smashing success powering Sprint’s “Cut Your Bill in Half” customer acquisition campaign. Though our solution aligned well with the CIO’s forward-looking plan, circumstances at the start-up (which later failed) killed the acquisition deal and prevented our team from seeing this amazing opportunity through.

Legacy compromise

Three years later, I took a chance on a new start-up venture, building a value-added reseller (VAR) business with a focus on mobility. Leveraging lessons learned from my time with the CIO, we joined his company’s partner program in order to gain access to vast resources, skilled people and world-class products.

Ed Finegold
Ed Finegold

We invested early money – the most expensive kind – in a ready-made e-commerce platform accessible only through this partner program. Our intent was to provide digital pop-up stores to clients who could in turn open them to their customers or members for discounted pricing on a variety of useful products. While the concept was powerful, it soon became clear that the e-commerce platform was too compromised by the large company’s legacy to obey rules fundamental to digital success.

On paper, the platform was designed to enable a fully functional e-commerce storefront on any website with a simple integration. On initial assessment, the boxes all seem checked. The platform was pre-integrated with a robust product catalogue; automated payment and shipping; pricing controls; custom bundling; coupon codes; and more. The concept was truly digital and aligned with the vision the CIO had described years before.

As we dug into our implementation, however, we were repeatedly hamstrung because the platform proved to be a digitalised version of many legacy processes. For example, basic user experience tenets were violated. The store would require customers to “call for availability” when a product was out of stock, with no ability to filter out such products or change the call to action; the developers explained this was a legacy compromise. 

Similarly, many products required the visitor to request a price quote. While this approach is typical in a legacy, business-to-business (B2B) setting, it doesn’t fly in a digital setting. Imagine this as an employee or member store; if it can’t beat Amazon on both price and user experience, it’s not much of a perk. Had the platform been offered with a common, digital approach – a 30-day free trial – we would have sorted these limitations out much more quickly.

Not mobile first?

The storefront also failed to work smoothly on a mobile device. Resizing the display would create content presentation problems that sullied the shopping experience. A list of other legacy-derived issues emerged as well including: limited payment options; costly shipping with added handling fees; and a lack of integrated shipment tracking and notification. These are staples in the digital world. Lacking these capabilities while adding incremental costs undermines one’s ability to compete in the digital market, especially against marketplaces like Amazon and eBay.

Legacy processes also impacted the administrator’s experience negatively. For example, orders would not flow through automatically; they had to be reviewed manually and then submitted to the provider. Bundles were difficult to create because the management console did not provide price and margin visibility. A half dozen offline workarounds had to be created to facilitate price and margin analysis; to test pricing models; and to ensure products were not offered below cost.

The reasons why these problems persist can be summed up in one word: legacy – legacy catalogue rules; legacy shipping processes and fees; and legacy fulfilment processes.

As powerful as the concept was, in practice it restrained small, innovative partners with an appetite for risk from competing in the digital economy’s brutal jungle. The digital economy will not forgive legacy compromises, nor will agile partners who could break new ground in digital transformation, but only if they are unshackled from legacy compromises.

Ed Finegold, author, analyst, thought leader & digital start-up veteran

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