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Digital Transformation risks needs to be managed in a different way

Digital transformations fail all the time. According to an Everest Group study, 73% of companies failed to provide any business value from their digital transformation programs. There are dozens of research articles telling why transformations are failing and what should be done, still the failure rates continue to be very high. The probability of different risks to occur varies from company to company and the impact varies depending on how complex and comprehensive the digital transformation initiatives are. There are two major reasons for the failure rate which needs to be addressed to unlock the success of digital transformation initiatives:

  • Digital transformation initiatives have a higher risk profile due to the high complexity and uncertainty.

  • The Risk Management process used today is out of date and is not sufficient to mitigate the risks and prevent failure.

First of all, many digital transformation initiatives have a high-risk profile due to high complexity and uncertainty:

  • It is often a combination of a new way of work, business process and new technology change cross business units with unknown complexity, dependencies, making plans, budgets, and timeline highly uncertain.

  • Often it involves all levels in the organization and several business units spread out globally including interaction with customers and partners in the whole supply chain. It includes changes of how to work for thousands of employees making adoption to changes in processes and new technology challenging and hence the business outcome becomes uncertain.

  • It takes years to run transformation initiatives, also if you have an agile agenda, which needs to be managed in parallel with continuous improvement actions, maintenance and compliance changes in current operations which also increasing probability for new major unidentified risks.

  • It provides a very high pressure and stress over a long period on personnel which must participate both in the digital transformation work and solving operational and compliance issues and short-term customer commitments. The result is that the progress of the digital transformation is being constantly delayed due to resource constrains and bottlenecks.

Secondly, the risk management process used today is out of date and not sufficient to mitigate the risks and prevent failure:

  • The risk process with risk items and mitigation actions mapped in a risk matrix are normally in place in most companies. However, its manually maintained in a separate tool and detached from the actual transformation work making it impossible to understand the actual risk before it’s too late.

  • Existing Project Risk Management are focusing up to 80 percent on generic static risks that are not specific related for a specific initiative scope and the related impact on the organization, process landscape and IT ecosystem.

  • Project stakeholders documenting risks and mitigating actions without having detailed insights and understanding of the dependencies across Processes, IT Assets, own Organization, involved Suppliers and Customers.

  • Risks are most likely not initiative specific and impact multiple initiatives and changes, making it impossible to manage the dependencies in a proactive way.

Qlorem’s multiple-layer Digital Transformation Framework enables stakeholders to document and connect risks to all dimensions of the digital transformation initiative(s) in a dynamic digital twin. All changes to the Processes, Products including related IT Assets or physical assets, own Organization, and people, involved Suppliers and Customers are managed “live” throughout the digital transformation journey, see picture below:

Picture – Qlorem’s Multilevel Risk Management Framework for Digital Transformation initiatives

Qlorem’s multilevel Framework can be tailored to the transformation scope of the company. Here are three examples which illustrates this:

  • A Core Banking transformation initiative involves several layers of the digital twin; Often driven by process simplification and automation, replacing old legacy “mainframe solutions” with new and disruptive fintech applications and or moving parts of the solution to the public cloud. Qlorem’s digital twin is modeling the changes both in the presentation, business logic, data, and infrastructure layer.

  • A network & infrastructure transformation initiative f. ex in the Health Sector involves different layers of the digital twin driven by new digital services requiring more bandwidth and security tools, automating, and orchestrating the infrastructure. Qlorem’s digital twin is modeling the changes in the infrastructure application & data layer, infrastructure factory floor and facility layer (covering local hospital data rooms and communication rooms in different buildings).

  • A Factory Floor Automation initiative in the manufacturing industry may involve all layers from processes to factory floor and facility layer and it may involve the whole supply chain of different parties involved

How Qlorem is changing Risk Management?

Today nobody can understand and see the actual risk, since the dependencies and actual progress is hidden from both development leads, program leads and CTO-level.

Qlorem’s Dynamic and Adaptive Risk Management approach helps to see the Transformation risk from a transformation portfolio level down to a requirement change with the dependencies to a specific process step or IT system. But also provide Risk insights for a specific capability inside the Process Landscape and IT ecosystem.

Qlorem extracts actual development progress from for example Source Code systems, like Bitbucket or GitHub into a data lake where it’s mapped towards the AI powered dynamic digital twin to measure progress or quality, for example lack of progress towards target. The risk of delay or quality issues is real-time presented to all management layers in a transparent way.

Most risk management tool are manually kept up to date and detached from the actual transformation work. Qlorem’s Continuous Intelligence collects data from multiple source system, like Application Lifecyle, Issue tracking or Source Code Systems to analysis the progress and quality to identify and report adaptive delay mitigations to the relevant stakeholder early. Qlorem provides dynamic Risk Portfolio Overlap dashboards to easy identify risks across multiple initiative, process landscape and IT ecosystem and helps stakeholder to identify risk early to mitigate them with minimal effort as soon as possible.

Mitigating actions or preventive actions are also manually maintained and followed up reactively. Utilizing Qlorem’s Capability Manager helps to identify the right mitigating actions and support contingency plans in the context of appropriate levels of the dynamic digital twin. Mitigating actions can be tested out towards the digital twin to see if they are appropriate before they are implemented.

Qlorem has created a Digital Transformation readiness assessment and a 100-day implementation plan with global partners which your organization can use to kick start unlocking success in your Digital Transformation Initiative wherever you are. Let’s help you become successful.

Please contact for a demo

About Qlorem

Qlorem was established in 2020 in Norway with a global footprint in United States and India. Our mission is to help organizations secure quality and value from digital transformation execution. The Qlorem founders have several decades of experience in supporting digital transformation initiatives from a single value chain up to a whole renewal of the core banking ecosystem, Business Support System in Telecom, Cloud and Network infrastructure modernization and implementation of global Software as a Service. We have built up a broad understanding of both business and IT capabilities over the years, which are used in development of Qlorem.

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