A better way to de-risk digital transformations

eBook Three principles for de-risking digital transformationsAwareness - Cost Focus - Accountability

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The way businesses approach digital transformations is broken.

Looprisk is fixing it!

Looprisk is the first to bring risk awareness, cost based tracking, and team accountability to digital transformations. We’re helping digital transformation teams to avoid being one of the 84% of companies that fail due to inadequate management of implementation risks.

Designed to feel like the social apps you use every day, Looprisk lets your team apply leading risk management practices without feeling like an unwanted compliance exercise.

With features such as a powerful library of digital transformation risks and associated controls, team collaboration and cost impact monitoring, Looprisk makes de-risking digital transformation simple and intuitive.

Today, Looprisk is working with digital transformation teams at companies with turnovers between $50M and $4B.

We are de-risking

digital transformation

Who is behind Looprisk?

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Looprisk is owned and backed by a team of Australian consultants that specialize in de-risking digital transformations. Here's our story...

In 2017 we searched 'far and wide' for a quality risk management product suitable for helping teams to manage the treacherous risk landscape of digital transformations.

In short - we couldn't find one. Instead, we decided to create our own.

Even the best, most experienced teams cannot avoid the fact that their digital transformations are 84% likely to fail1.

We believe that concepts such as ‘embrace failure’ have been taken too far - nobody should embrace wasting their company’s money or disappointing customers. Now is the time to take digital transformation risk management to the next level.

1Joseph Gulla, 2011. ‘Seven Reasons Why Information Technology Projects Fail’.

Awareness-

Cost Focus-

Accountability

Looprisk is built around three core principles for de-risking digital transformations. These principles underpin efforts of the most successful digital transformation teams.

In the next section of this eBook, you will discover how aligning your team around these principles can de-risk your next digital transformation.

- Marcel Wilson - Chief Risk Officer @ Looprisk

Principles of successful digital transformation

The risks to digital transformation success are numerous. It is the nature of transformation itself that we can’t know all the possibilities before we begin. For this reason, it’s often said that transformations are a journey of learning. However, the key is to do as much of the important learning as early as possible, early, when it’s least costly.

Raise awareness about digital transformation risks

1Awareness

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“Virtually every Forbes Global 2000 company is on some sort of digital transformation journey. Some are getting it right and others struggle. Basically, with one in eight getting it right and then there were ranges of failure to really whereby more than 50 percent just didn't go right at all….

One of the most basic impediment to moving forward on the road to digital transformation is whether or not enough people within the organization are aware of the challenges. Because if they're not aware of the challenges the probable truth becomes they're either going to trip up, fall over and be massively disappointed when it comes to doing it. Basic awareness about those challenges is probably the key indication of how well the process will be successful”².

² Michael Gale (researcher and author about digital transformation) Quote from from 2016 forbes.com interview “Why 84% of companies fail at Digital Transformation”.

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2 - Awareness

To help you get acquainted with several common digital transformation risks, see our infographic that identifies 16 questions that you can ask about your organization.

looprisk.comAs part of a subscription to Looprisk, teams have access to our powerful library of template risks and controls. Your team needn’t be caught out, use the Loopisk library to identify risk early and apply our recommended controls.

2Because language such as ‘high, medium or low risks’ is abstract in nature, to many people, risk management can be seen as a theoretical exercise. These perceptions can mean that for many people, completing risk assessments become just another task, mandated by their company.

Needless to say, this type of attitude doesn’t create the engagement required to foster an effective risk culture that achieves results. To ensure that digital transformation teams don’t get nonchalant about risk management, it’s imperative that they evaluate and communicate risk using the universal language of business - cost impact.

To demonstrate the imperative for a quantitative approach to evaluating cost impacts, consider the following scenarios.

Evaluate risks based on costs impact

Cost Focus

Scenario 1 (Qualitative approach)

Susan had the responsibility of leading Steel Corporation’s supply-chain digital transformation. The transformation cost was estimated to be $2,000,000.

Susan’s team discovered a risk that was considered to have a ‘high likelihood’ and a consequence score of ‘5’ (the top score on the company’s risk rating scale).

Although the project team didn’t really know the cost impact of the risk, they had been advised that any risk with an overall rating of ‘high’ required a suitable control and monitoring by the executive team.

3 - Cost Focus

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Scenario 2 (Quantitative approach)

Susan had the responsibility of leading Steel Corporation’s supply-chain digital transformation. The transformation cost was estimated to be $2,000,000.

Susan’s team discovered a risk that was considered to have a ‘likelihood’ of 90% and a consequence of ‘$750,000’.

This equated to an overall risk exposure of $750,000 x 0.90 = $675,000.

3 - Cost Focus

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Steel corporation had decided that any risk over $500,000 required controls and executive team oversight.

Susan’s team identified a suitable control that was considered 80% effective. This mitigation effort reduced Steel Corporation’s risk exposure to $135,000.

Steel corporation’s executive team congratulated Susan and her team for reducing the transformation risk exposure from $675,000 to $135,000 - an 80% reduction in financial cost impact.

Scenario 1 & 2 Compared

Scenario 1 is based on qualitative risk evaluation approach. Although the practice of assessing risk as ‘high’, ‘medium’ of ‘low’ is widely used, it often fails to get the attention of people throughout the organization. As a result, qualitative approach to risk can be ineffective in driving the behaviours needed to reduce risk exposure.

Scenario 2 is based on quantitative evaluation of risk (used by Looprisk). The evaluation of risks using financial cost usually requires some effort in estimating or collating historic data from past projects or third parties. Importantly, the value in conducting all digital transformation risk assessments using a quantitative financial cost basis is in using a language most people can relate.

Using a financial cost basis for evaluating risk is more effective at driving the behaviours (at all levels of the organization) required to mitigate risk impacts.

Cost Focus

Effective risk management requires a team culture of ‘taking action’ and following through - not just nodding heads!

In other words, de-risking digital transformation requires accountability for the follow-through of daily tasks.

The accountability difference3

Accountability

According to former Navy Seal and transformation specialist Brent Gleeson, accountability in organizations has the following benefits:

● Strengthens culture● Breeds excellence● Builds trust● Sets expectations● Achieves common goals● Helps define the mission● Sets performance indicators● Defines reality● Empowers the team

Accountability

Although a culture of accountability can have such broad and powerful benefits, achieving it is ‘easier said than done’.

To foster a culture of accountability, it’s essential to embed systems and processes that reinforce the required daily behaviours.

Loopisk helps to foster accountability by enabling digital transformation teams to assign risks and control tasks to individuals. Discussion boards and notifications provide transparency between project team members.

Without a structured way of managing digital transformation risks, you are ‘playing roulette’ with your company’s money and its future. As a result, independent research shows that teams that persist with risky implementations usually cost their companies dearly.

At Looprisk, we believe that every digital transformation team should foster a risk management culture based on the principles of awareness, cost focus and accountability. Why?

Simple... because these are a prerequisite to digital transformation success.

Let’s cut to the point

A better way to de-risk digital transformationsLooprisk.com

support@looprisk.comGround Floor, Unit 3, 1008 Wellington Street, West Perth, WA, Australia 6005