What are the Reasons for the Failure of Digital Transformation?

2022-01-25 09:26:10
Chen Qi
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Summary : Digital transformation is no longer just a buzzword; businesses have realized that digital transformation is a must for success. Despite more than a trillion dollars invested in transformation efforts, there is still a chance of failure.

The Reasons for the Failure of Digital Transformation

A recent Flexera survey of CIOs and other senior leaders showed that more than half of the respondents listed digital transformation as their top concern, followed by network security, cloud priority/cloud migration, and improving customer experience, closely dependent on digital transformation.


Digital transformation is no longer just a buzzword; businesses have realized that digital transformation is a must for success. Despite more than a trillion dollars invested in transformation efforts, there is still a chance of failure.


A study by the Boston Consulting Team shows that about 70% of digital transformation projects fail to achieve their goals. Some people still believe that digital transformation is all about infrastructure and ignoring the company's culture, DNA, and business model. The reason for the project failure may be related to this.


Is your team facing the dilemma of digital transformation failure? According to Kristin Moyer, chief executive officer of Gartner and outstanding vice president analyst of digital business leader practice, there are three categories of digital transformation failures: regression, poor performance, and failure of new digital plans.

  • Retrogression, or "transformation-washing," refers to the measures that the brand has failed to implement previously.
  • When the enterprise is not satisfied with the project, there will be a problem of poor performance. Although there may still be some small gains, the real intent of the project is not fully realized.
  • The failure of a new digital product or service refers to the fall flat, and all resources deployed for the project are wasted. In this case, the only feasible is to terminate the project.

To ensure that your digital transformation plan doesn't fail, you need to understand the potential reasons why your initiatives might fail and know how to avoid them in the first place.

1. No High-Quality Digital Transformation Strategy

In a survey of 100 Fortune 500 CIOs by Constellation Research & WalkMe, 77% of respondents ranked digital transformation as their top priority for 2021. With a high-quality digital transformation program, you don't have to worry about falling back, underperforming, or failing outright.


How to reposition teams in the digital economy? What is the action plan?

Source: Graph

Digital transformation is not just about adopting new technology but integrating innovation, using emerging technologies, and seeking new business and business models. Successful digital transformation requires finding ways to reinvent the business from the ground up, with the ultimate goal of improving productivity and customer experience.


If a transformation strategy is desirable, the program should take care of the nature of the challenges to be addressed and identify critical aspects of the challenges. There must be guidelines for addressing challenges. How to overcome the problems found should be clearly stated. The team must know which actions are necessary and when to take them.


Without a clear explanation, they may rely on intuition, quickly deteriorating. You must refrain from a situation where the team embarks on fragmented projects and aimless tech infusions that will not add any business value.

2. Aversion to Changes

Most of the time, many people are uncomfortable with any form of change in their culture or way of doing things. This is the first reason for regression, under-performance, or outright failure. Is the transformation seen as an absolute "Evil"? Why do we have to break the rules?


The mindset of all those involved in the program must be positive. Although the role of the CEO is the most important to establish a correct attitude, the leadership must practice from the CEO to the middle managers.


When the CEO is passionate about transformation, and the body language and body language consistently demonstrate that passion, that spirit spreads to other employees. The CEO's support for the program greatly influenced the source of funding for the project.


Since CIOs are responsible for most digital transformation initiatives, they can't be just your average execution partner. They must act as pivots for transformation and be willing to train others.

3. Not Hiring High-Quality Talent

Suppose you don't master the right combination of skills required for transformation projects. In that case, the process of this effort is going to fail because this may lead to the wrong prediction that you have every talent you need to implement a successful digital transformation.


You must pay serious attention to transformational leadership positions. You need to master digital expertise and some broader skills. You can take for granted the positive impact of attributes such as determination, pragmatism, flexibility, cooperation, critical thinking, creativity, EQ, adaptability, and learning agility.


Knowing what fields are in short supply is the only way to find the right people. When these talents cannot be directly employed, outsourcing can also be used to fill the gap.


Fields like artificial intelligence and cybersecurity don't have to treat fundamentally. Bringing in people who have a sufficient understanding of digitalization and experience in implementing such transformations is adequate.

4. Lack of Necessary Culture

The organizational culture may become a stumbling block to the organization's transformation plan. To succeed in the digital transformation, everyone in the organization must embrace a collaborative culture.


These initiatives transcend departments, as everyone needs to work to increase productivity. Whatever your goal is, all hands must be on the deck, from improving productivity to enhancing a better customer experience.


We succeed in the digital transformation plan by having a collaborative culture among employees across different functions and different sections.


Transformation management must be at its best to quickly identify those who resist cultural change. Through education and training, they can participate in the transformation plan and become the influencers of the transformation.

Conclusion

While these factors may not be all that is causing the digital transition to fail, they will go a long way towards making our transition plan a success. No one wants to throw away the investment, but the digital transition will take hard work.


Digital transformation cannot succeed casually. We must persevere. It requires careful analysis and mastery of all available data for a comprehensive understanding of the objectives that we have to achieve.

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