While a digital transformation can take a company to new heights, it can also open a company up to new risks. This was the case in 2013 when the British Broadcasting Corporation (BBC) officially canceled its Digital Media Initiative (DMI).
A complex program designed to fully prepare the public service broadcaster for the digital world, DMI instead resulted in an asset write-down of nearly £130 million.
Today, we’re diving into the BBC digital transformation failure to understand what went wrong, what we can learn, and how you can avoid similar mistakes.
The BBC Digital Transformation Failure: What Happened?
The initiative was launched in 2008. Its main goal was to transition the BBC away from videotape storage so users could upload, download, edit, or archive content quickly and easily from their desktops.
Key changes included:
- Advanced, in-house production tools
- Online digital archive
- New database
- Common enterprise services
As designed, the DMI would encompass 163 regular users, with a running cost of £3 million per year. This figure was far more palatable than the annual expense of £780,000 required for the existing system.
However, not everything went according to plan. The system was never fully operational and roughly ten years later, the BBC scrapped the project. At this point, the total spent on the DMI equaled around £125.9 million, while net costs to the license fee payer were around £98.4 million.
We have multiple software expert witnesses available for provision of reports, depositions, and testimonies.
5 Lessons Learned from this Failed Digital Initiative
Ultimately, poor governance and ineptitude were to blame for the BBC failure, along with misguided focus and priorities. Let’s look at some of the core issues at play and how your organization can sidestep them.
1. Set Realistic Expectations
In your effort to go live quickly, it’s easy to get overly ambitious with your projections. It’s also easy to hold tight to those budget and timeline expectations, even when the evidence continues to mount against them.
This happened to the BBC in 2009. Only one year after hiring Siemens as a contractor, the broadcaster fired the company and took over project responsibility.
Despite this shift, the BBC still had its sights still set on a 2011 go-live. Unfortunately, the transition slowed operations and prevented the team from meeting this go-live date.
Years later, the date of completion was again extended. Leaders blamed technical issues and software releases that failed to meet expectations.
When setting expectations, be sure to factor in unforeseen changes and setbacks. This way, when challenges arise, you have a buffer in place that gives you time to address them.
2. Focus on Change Management
Reports show that the BBC failed to establish a culture of change around the DMI project. Instead, business leaders focused more on the technological aspects.
With a transformation of this magnitude, organizational change management is critical. Unless your workforce is behind a project, even the best tech can’t salvage it.
The project aimed to improve and standardize workflows across all of the BBC. To accomplish this, the company intended to replace familiar practices with leading-edge technology. As you can imagine, these propositions weren’t readily embraced by all stakeholders.
Unfortunately, there was no change management plan in place to manage this resistance.
3. Establish Project Governance
The report also noted that the BBC failed to appoint a senior leader as the project owner. This leader could have acted as a single point of accountability to ensure every project initiative tied back to a broader organizational goal.
The BBC discovered too late that its business requirements were not adequately defined. At this point, they had already selected a system without knowing if it could meet the company’s business goals. In addition, there wasn’t even sufficient assurance that the actual system design was technically sound.
Executive oversight as well as a third-party assessment could have uncovered these issues. Instead, the BBC overlooked the red flags, and as a result, the project was riddled with problems, even as developers continued to release new technology.
4. Follow a Reporting Structure
Without a dedicated project manager and spokesperson, there were many project updates that went uncommunicated. As a result, it wasn’t possible to formally report progress or successfully manage project risk.
This also meant that executives never had a clear understanding of how the DMI effort was going or where it was heading. This made it even more difficult to ensure that the ongoing initiatives were aligned with organizational goals.
5. Create (and Review) Your Business Case
Where do your company’s strengths lie? What is your biggest challenge? Why do you need updated technology, and what tangible benefits do you hope to realize?
These are the types of questions that can help frame a business case for a new digital investment. While the BBC did create a business case at the beginning of the DMI project, reports show that it wasn’t subjected to periodic review.
By checking in on your business case, you can make sure you’re making strides toward your business goals.
Find Long-Term Digital Transformation Success
Don’t let the BBC digital transformation failure scare you. These types of projects can be wildly successful if you have the right expectations and resources. From creating a business case to prioritizing change management, there are many success factors that are crucial to digital initiatives, big or small.
Our team of ERP consultants is here to help you navigate your digital transformation or ERP system implementation. Contact us below for a free consultation.