What Is IT Transformation? Six Factors for Success


Liberty Advisor Group

Does one of your business resolutions include a large-scale IT transformation project? Worldwide IT spending is projected to total $4.6 trillion in 2023, an increase of 5.5% from 2022, according to the latest forecast by Gartner, Inc.

The Gartner Group reports that 75% of large-scale technology projects like enterprise resource planning (ERP) and CRM fail. It is therefore critical that you put yourself in the best possible position to see success in those big projects.

What Is IT Transformation?

Put simply, IT transformation is the aligning or re-aligning of IT systems with overall organizational goals. It overhauls all of the business’ technology infrastructure from the ground up in order to maximize efficiency, reduce overhead, and implement a more fluid customer journey. Generally, IT transformation aims to improve a business’s agility, allowing it to quickly adapt to new technologies and strategies within their industry. 

Examples of IT transformation include pivoting to a remote or hybrid work model, utilizing AI to gain insights into the sales process, or even automating certain aspects of customer service.

Avoid This Common IT Transformation Mistake

By far the most common and critical mistake that corporations make during their IT transformation projects is viewing their transformational projects as belonging entirely beneath IT’s umbrella. As a result, they fail to accord these projects whole-business importance, and thus they lack active top-level business support and commitment, as well as a clearly defined economic business case. 

Aligning the organization’s economic or financial goals with the project’s contributions toward those goals, inside a “living” business case, helps overcome a variety of speed bumps during what can be a two- to four-year journey.  When approached from an economic point of view, it’s possible to identify the benefits of a large transformation program sooner, thus helping to both justify and fund the future costs of delivering larger benefits requiring more time and effort.

When these missteps are combined with a handful of others, it’s no longer a mystery why costly failures are so common. A study conducted with Oxford University found that large IT projects run 45% over budget and 7% over time while producing only 56% of the predicted value. What’s quite a bit worse is the phenomenon of extreme cost overruns known as “black swans.” 

According to the Harvard Business Review, research that examined 1,471 large-scale IT projects found that one in six had a cost overrun of 200%, and a schedule overrun of 70%.  When Levi Strauss, for instance, decided to migrate to a single SAP system, allocating a budget of $5 million, things went so badly that the company suffered a $200 million loss. While Levi Strauss survived, the Harvard Business Review notes that mismanaged IT projects have not only cost the jobs of top-level managers, they’ve actually sunk corporations and threatened cities and even nations.

Here are the 6 essential factors to better ensure the success of your large-scale IT Projects:

IT Transformation Projects Need to be a Top Priority

A project that affects the way your entire company is run must be a top priority for your entire business, not just a top priority for IT. Everyone needs to be on board — and stay committed — until the project is successfully completed. That’s because a major IT initiative involves far more than technical skills and tasks. When the IT infrastructure that supports your company is about to change, educating and managing people is equally if not more important  and complex as installing and implementing new software.
Those in charge of this degree of change should be your best business-side managers – those with excellent people skills, and an understanding of both the corporate culture and the new technology (or have a good relationship with trustworthy advisors, as well as your own IT department).

All too often, the business side misinterprets their role in an IT project of this magnitude.  And, just as often,  IT leadership fails to communicate or engage with the business correctly. It’s true that the business side is usually involved up front, helping to choose the software, articulate requirements, and/ or define the business case.  Unfortunately, when this “honeymoon phase” is over, business leadership tends to drift away,  viewing the project as “owned” by IT. As a result,  these leaders don’t see the transformation project as a top priority,  so they immediately re-focus their attention on others. But when business leadership isn’t actively involved, and leaves it to IT to manage both human and technological resources (something they are in no position to do), the project not only isn’t going to get done, it can easily result in a sinkhole of financial loss.

Six Factors For IT Transformation Success

1. Your Best People Are Dedicated to the Program

The people involved with large-scale IT projects are just as important as the technology, if not more so. To succeed, it’s wise to dedicate your best people from core business units to ensure that everyone in your company will accept their decisions regarding project implementation and that the project will be handled with a high degree of efficiency and skill.

For transformational initiatives, organizations should use the program as a way to prepare the future leaders of the company.  By seeding the program with the high performing individuals, you not only better ensure success of the program, but you give those future leaders an opportunity to shape the company.

2. A Compelling Business Case Justifies the Investment

Before launching a project of this size, you might expect that developing a compelling business case, one delineating expected value and expected cost, is a given; a no-brainer. Unfortunately, in many cases, no business case is ever developed. As a result, the project lacks the built-in methodology for driving decisions about design, cost, and functionality tradeoffs that a business case can provide. Knowing your expected value and cost helps justify investment in the project, and so is essential to its continued progress and completion.

3. Executives Provide Unwavering Commitment and Support

Large-scale transformational IT projects require the active commitment and support of top executives for a period of two to four years, in order to be successful. Too often, though, when a project is only partially completed, the senior executives lose focus and begin to think about moving resources to another initiative that seems promising. This is one of the most common ways to ensure the failure of your IT project. Seeing the initiative through to completion with full commitment and support is the only path to success.

4. Decision Making Is Top-Down, Center Led, & Swift

To provide a transformational IT project with the robust governance framework it needs from start to finish, the members of your business and technology program management team should operate with clearly defined roles and responsibilities. Decisions should come from those whose roles are at the top, be led by those who occupy the center positions and be executed swiftly by everyone.

At the same time, and before the project begins, another governance framework should be developed that will handle the inevitable project changes – from cost increases to schedule alterations, to scope creep. Guardrails should be put in place so if a cost increase or a schedule change exceeds a certain threshold, a designated top decision-maker will become involved – although not before.

Finally, the project management team should meet with all stakeholders on a regular basis, in order to communicate project progress, and be sure that the goals of all involved are in alignment with the project’s direction and scope — as it develops and evolves.

5. Independent Controls and Transparency

Finally, you will need skilled experts for fire prevention and potential firefighting who can course-correct processes quickly, if needed, and can fill-in any expertise gaps within the organization, all while providing an objective view that makes success far more likely.

At the same time, you want to ensure that communication between business and IT is both constant and transparent. Miscommunication, or no communication, can compromise an initiative of this size all too easily.

6. Increase your overall odds of success

Our clients find that there is a considerable difference between hiring an IT consulting company to implement their transformational solution and bringing in Liberty as an objective advisor. We act as your partner in the truest sense of the word – with your company’s interests top of mind at all times. Our extensive experience in large-scale IT projects gives us a unique perspective.  We offer project oversight and engage in management responsibilities along with our clients.

Each of our successful case studies shares many of the same features: reduction of business risk, maximizing business value, and an overall alignment to our client’s long-term goals. Having course-corrected dozens of projects in challenging situations, we have gained unmatched insight into the pitfalls of large-scale IT projects.

Liberty Advisor Group Can Assist Your IT Transformation Aspirations

Liberty Advisor Group is a goal-oriented, client-focused and results-driven consulting firm. We are a lean, handpicked team of strategists, technologists and entrepreneurs – battle-tested experts with a steadfast, start-up attitude. Our team, with an average of 15+ years of experience, has delivered over $1 billion in operating income improvement and over 300 M&A deals for our clients. We collaborate, integrate and ideate in real-time with our clients to deliver situation-specific solutions that work. Liberty Advisor Group has the experience to realize our clients’ highest ambitions. This year, Liberty has been named to the 2019 Best Places to Work in Chicago and to FORTUNE’s list of Best Workplaces in Consulting and Professional Services.

Reach out to Liberty Advisor Group today and together we will ensure you’re in the  best possible position to see success in your next big project.


Liberty Advisor Group

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