Why digital transformation projects fail

Blog by: David Griffiths, Managing Director, Adept4 - 11-Sep-2018

Digital transformation is an essential part of modern business. But it is not an easy one.

Research has highlighted that some 84% of companies fail at digital transformationand in our experience that’s about right. It doesn’t matter if you’re a young startup setting out to be digitally centric from the word go, or an established business trying to change for the better—it’s not enough to simply understand how the digital landscape lies right now. You have to put in place the policies and processes that will enable you to transform along with it in the future.

Want to avoid making the same mistakes we’re seeing elsewhere? Here are the five biggest reasons for digital transformation failures and how to do better.

1: It’s treated as a one-time event

Possibly the most basic failure when it comes to digital transformation is treating it as a one-time (or at least a temporary) event. We’ve previously quoted a study by consultancy Arthur D. Little that saw multiple reasons behind digital transformation failures and most were based on a lack of long-term foresight—be that in the strategy, not recognising threats and opportunities, or being too reactive to developments.

Digital transformation is an ongoing process. As fast as the digital landscape changes, your business will need to change with it, and failing to do so means your transformation won’t have a hope of success.

How to fix this: Communication is key. Be upfront about what lies ahead and make sure everyone understands that flexibility and patience will be required to give the business the ability to change, pivot and evolve to maximise its potential. Planning ahead will also help keep everyone on the same page as to the journey you’re taking.

2: There’s no vision for your transformation

While digital transformation is an ongoing process, you still need to be able to tell people where you’re headed and if you’re moving in the right direction or not. Unfortunately, a lot of companies fail to sit down and work out what ‘success’ means for them and where this transformation should be taking them. They don’t have a vision for how the changes will positively affect their customers and they don’t take the time to identify measurable targets for the business to strive for (or they set end goals that they may never reach). Without constant goals and touchstones along the way, even a well-intended transformation will fall from the path and fail.

How to fix this: Set measureable goals and KPIs in order to make sure this overwhelming process is broken down into achievable tasks. This won’t only keep you on the right path towards your vision, but will also protect staff morale which might otherwise fall flat if employees can’t see what effect their hard work is having on the company’s success.

3: Transformation strategies aren’t being executed properly

In 2017, Wipro Digital ran a survey of American-based senior executives. They discovered that a huge 50% thought they were executing their digital transformation strategies poorly.

Unfortunately, this is a common problem for all business strategies—where the focus is often restricted to the formulation of the strategy and not enough consideration is given to the execution. 

How to fix this: When creating your digital transformation strategy, make sure you pay attention to how it will be executed. Do you have the skills and talent needed for the various roles? Do you have the resources to undertake the tasks on an ongoing basis (and to pay for what’s needed)? Perhaps most importantly, have you picked the right person to lead the transformation? 

4: The wrong person leads the digital transformation

We’ve discussed this previously in our article on who should lead the digital transformation. But we’ll keep beating the drum on this topic, because it’s a major contributor to the success or failure of a transformation. The same Wipro survey (mentioned above) found that CEOs, CTOs and CIOs were twice as likely to be left in charge of a digital transformation. Yet CEOs often won’t have the capacity or the digital know-how, and choosing CTOs or CIOs means losing the overall view needed to steer changes across the organisation.

How to fix this: Create a senior Chief Digital Officer role who works directly with the CEO, meaning they have the authority needed to champion the transformation, but will ideally have the specialist knowledge to enable them to get their hands dirty with the processes. This is a full-time job, and one on which the success of the company depends, so it can’t be merged into another role which ends up with someone having to juggle competing priorities.

5: The company culture is resistant to change

Again, we’ve talked about this reason for failure before, but it’s a big one. A previous survey identified that over a third of companies refused to see company culture as being crucial to the success of digital transformation. Meanwhile, the Wipro poll highlighted how 1 in 5 senior executives secretly thought digital transformation was a waste of time.

But make no mistake: company culture can make or break a digital transformation. People are naturally resistant to change, especially when it involves a daily routine they’ve perfected or when it comes to the introduction of new technology. So disruption on this scale is always going to ruffle feathers and cause resistance. You need to get everyone on the same page or you’re going to struggle to lead them through the transformation. 

How to fix this: Break down silos (where possible) to create a community feel across the company. Encourage collaboration between different departments, helping to build the trust you’ll need for a coordinated digital transformation. Once again, keeping the lines of communication open is absolutely key, making sure people raising issues are being heard, but they are also aware of what you’re planning.   

Want advice on giving your digital transformation the best chance of success?  Get in touch and we’ll be happy to guide you in the right direction. 

 

Topics: Digital Transformation

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