It was many years ago I first heard this business mantra: “Think big, start small and scale fast.”
I thought it was a wonderful concept, and it has driven my thought process in many technology implementations. Over time, however, I realized that there were too many projects that stalled somewhere between the “Start Small” and “Scale Fast” phases.
Technology projects play a crucial role in driving organizational growth and innovation, but moving these projects from the pilot stage to full-scale application can be a major challenge. This phenomenon is not just a minor hiccup in the world of corporate technology deployment; it represents a critical barrier to progress and efficient resource utilization. In this article, I’ll explore why many of these undertakings don’t make it past the pilot stage and, even if they do, why they often struggle to scale effectively across an organization. I’ll offer some suggestions on addressing these issues earlier in project planning to better prepare for the challenges of scaling.
In a recent article, McKinsey states that “Innovators dominate headlines, but Scalers dominate markets.” In other words, successful CEOs are as passionate about scale as they are about strategy. According to the article, 40% of digital and AI transformations stall out at the scaling phase (and that was from a 2019 study — I think we can safely assume the percentage has climbed over the past few years). This highlights the critical importance of getting this right!
The Problem with Pilots
Pilot projects are typically the first step in implementing new technology within an organization. They serve as a testing ground, offering a controlled environment to evaluate the potential of a new system, software or technology. The “Pilot Paradox” lies in the fact that while pilots are designed to be the first step toward a solution, mitigating risk by providing a preview of how technology could function in a broader context, they often end up being the final stage for many projects, sometimes even if the pilot has been successful.
One of the primary reasons pilot projects fail to progress beyond the initial test stage is their limited scope. Pilots are usually conducted in a regulated setting with a small user group, which may not accurately represent the organization’s overall composition. This limitation can result in a failure to identify key challenges and needs that become apparent only when the technology is deployed at a larger scale.
Another critical factor is the misalignment of the pilot project with broader business objectives. Sometimes, technology projects are initiated because of their novelty or the vague promise of efficiency without a clear understanding of how they align with the organization’s strategic goals. If the pilot does not demonstrate clear value or ROI in line with these objectives, decision-makers may be reluctant to invest further.
The Scaling Challenge
Even for technology projects that successfully pass the pilot phase, scaling across the organization presents its own set of challenges.
Integration Complexities: Integrating new technology into existing systems can be a daunting task — the larger and more complex the organization, the more challenging this becomes. In some cases, the integration needs for the pilot were met with temporary workarounds to full system integration. Solutions that worked flawlessly in a pilot environment may encounter unforeseen issues when interfaced with a variety of legacy systems or when used in different operational contexts.
Resource and Budget Constraints: Scaling a technology project often requires significant investment in both human and financial capital. Organizations may find it challenging to allocate the necessary resources, especially if the pilot project did not unequivocally prove the anticipated benefits. Additionally, budgets for pilot projects may originate from different “pots of money” and approval processes than where the funding for fully scaled implementation will come from. Budget constraints can thus become a major roadblock in scaling the project.
Change Management and User Adoption: The human element cannot be underestimated here. Resistance to change, lack of training and poor user adoption are significant hurdles. What might have worked in a small group during the pilot phase can falter when applied across a larger organization with a diverse workforce. This is especially likely when the pilot participants were chosen for being enthusiastic early adopters of technology.
When scaled to the full organization, the number of reasons not to use the technology may seem to explode. Finally, training for the pilot team members can usually be done more effectively and economically than when faced with the varied needs of the full organization,
Solutions and Best Practices
Despite these challenges, there are ways to increase the chances of a technology project moving successfully from pilot to full-scale implementation.
Aligning with Business Goals: Sounds simple, right? I wish. Projects, especially pilots, must be closely aligned with the organization’s strategic objectives from the outset. For example, in the case of the oncoming AI avalanche, management may feel pressured to show they are using this wonderful new technology and undertake a project with high visibility but low overall impact, veering away from actual business goals. Proper alignment ensures that the project is seen as essential and valuable, increasing the likelihood of continued support and funding.
Comprehensive Planning: A comprehensive plan is an obvious necessity, but sometimes key components of the plan are not considered. Your plan will include a budget, resources and timelines. A couple of the oft-overlooked areas are the detailed post-pilot scaling plan and the list of necessary collaborative activities with your solution/software provider(s). The first is often passed on with the thinking that a second, more in-depth planning session will happen once the pilot is complete – but that doesn’t always happen.
The second one is trickier if you haven’t selected a partner yet, but you can still make allowances for collaboration with whoever you end up choosing . When your solution provider fully understands your pilot needs and the challenges of full-scale implementation, the plan (and subsequent pricing and support model) can match the needs more closely.
Effective Change Management: Proactively managing the human aspect of technology implementation is vital. This involves effective communication, training and support systems to facilitate user adoption. Engaging stakeholders at all levels and incorporating their feedback can also foster a sense of ownership and acceptance.
In many companies, this cost is the first to be jettisoned when trying to fit a project into the allotted budget. In the McKinsey book Rewired, they suggest this rule of thumb: for every $1 spent on the actual technology, you should spend $1 on the user adoption and change management necessary to make it work. It’s money well spent!
Scaling Strategies: There’s more than one way to achieve success in scaling. For instance, rather than attempting a full-scale implementation all at once, an incremental approach can be more effective. This method allows for adjustments and refinements based on feedback and emerging challenges at each stage of expansion. The increments can be defined by geography/business units or they can be functional increments.
Alternatively, a Harvard Business Review article suggests a different approach to scaling successful pilots. Rather than requiring that new teams replicate the pilot exactly, share with them what you’ve learned from the pilot and then challenge them to find their own solutions that could work as well as — or better than — the original pilot.
Continuous Evaluation and Adaptation: Finally, ongoing evaluation and the willingness to adapt the technology or its implementation strategy based on real-world experience are essential. This flexible approach can help navigate the complexities of scaling and integration in a dynamic business environment. Make sure your project meetings extend well beyond the go-live date (with the executive sponsor included) and have the capability to make changes as needed.
Conclusion
The journey of a technology project from pilot to full-scale implementation is fraught with challenges. However, with strategic alignment, careful planning, effective change management and a flexible, incremental approach, organizations can overcome these hurdles. The key is to recognize that scaling a technology project is not just a technical challenge, but also a strategic and human one. By addressing these aspects, businesses can unlock the full potential of their technological investments, driving innovation and efficiency on a larger scale.
Rick Pozniak is a distinguished authority in B2B automation, system integration and digital transformation, with a specialization in the North American wholesale/distribution and manufacturing sectors. With over three decades of experience, he has played a crucial role in optimizing customer and supplier channels through transactional, product data and customer service automation.
As the founder of Move78, a consulting and integration services company, he holds a pivotal position as a strategic intermediary. This role enables him to deliver impactful results for wholesalers, manufacturers and their solution providers, thus creating value for partners at both ends of technology implementations. Pozniak's firm also offers strategic guidance to organizations adapting to the uncertainty of AI, bridging the gap between business needs and technology implementation. Furthermore, they provide product development guidance to several strategic Solution Providers.