The Success Rate For Digital Transformation Projects Is Terrible. Why?

February 25, 2022

With more digital capabilities enabling growth for companies, digital transformation is a necessity for all businesses, from the small to the enterprise.

It presents opportunities for you to re-imagine the way your business can function with new digital technologies. However this path is not plain sailing, most organizations don’t see the rewards of the digital transformation due to a number of reasons ranging from technical barriers, culture, structural issues and everything in between. Due to these reasons only 30% of digital transformation projects succeed. This figure is pretty shocking.

Let’s delve deeper into the challenges of digital transformation and see how you can navigate the obstacles and reap the benefits to make your digital transformation successfully from vision to execution.

What is a digital transformation?

A digital transformation is the integration of digital technology into all areas of your business. Essentially reimagining your business processes, culture, and customer experiences to meet the ever changing business and market requirements.

This transformation involves the development of new capabilities to be more agile and innovative. From custom built technologies, to leveraging better usage of data. It’s a cultural and technological change that requires organizations to continuously challenge the status quo, trial new solutions and accept both success and failure.

Why do 70% of digital transformation projects fail?

The reality is, transformations often feel exciting from afar but intimidating as they venture deeper into the transformation journey. Unfortunately the status quo has become comfortable, companies simply do not want to break the norm. Switching tech or processes out isn’t that easy, as action is much harder than maintaining the current process they have in place.

The biggest issue with a digital transformation is the inability to account for the cultural change to see the transformation through. And it desperately requires support from the majority of the organization. The CEO will need a strong management strategy from training and support to ensure new processes and tools are adopted by the team to achieve the new digital vision.

However, change is scary and just too daunting for them to actively pursue the digital roadmap project from beginning to end. And in most cases companies who don’t commit 100% to the transformation leads to failure and reverting back to the status quo.

They don’t have a proper strategy

You need a strategy, as you would need with any business change. Your teams need a purpose; so with this in mind, clarifying your vision for your new digital systems and setting goals to reach it is vital to transform the digital landscape.

The digital transformation journey doesn’t belong to just one individual or department. Without these goals and an overarching strategy in place, success is unlikely. It leads to no real understanding of the challenges you may potentially face as measuring progress becomes an issue. Being faced with the dreaded spaghetti code is a real risk as new tools get added to old infrastructure, increasing the transformation challenge in the long term. It is important for the whole organization to be working towards the common transformation goal.

Lack of technical skills

To succeed in your transformation efforts, you need a highly specialist IT team, with personnel such as data-driven business analysts, capable cloud architects, IT program managers and cyber security roles. Having said that, building the team is proven more difficult and costly as skill shortages are common, and permanent hires are sometimes unnecessary.

Most companies don’t have the personnel to implement true digital transformation. They have hired for the status quo and as more companies pursue new technologies, employees are not able to build the roadmap for digital transformation or execute it. And finding the right partner to work with has also become a challenge.

Employee pushback is another problem. A digital transformation is unnerving for them as it makes them feel like their jobs are threatened especially when their comfort zone is being tampered with. Which generally makes it harder for them to buy in to the transformation roadmap.

Companies don’t understand their data

Business data is one of the backbones to digital transformations. With it, you can gain rich data insights to build a roadmap for change and evolution of customer needs over time.

As you can imagine, the way data is captured and organized matters and because most companies don’t have their integration strategy in check, they operate with many data silos and can be problematic if processes aren’t in place to gain a holistic view of your customers and an understanding of your business.

Failure to think of the end user

During the course of your digital transformation, continuous evolution of end to end user experience should be taken into account.  Flexibility and adaptability is beneficial for the digital transformation process. It’s best to shift your mindset of the digital transformation like it’s a product you are evolving and building as opposed to an ongoing challenge the company is still facing. Leveraging the data allows you to utilize the results to realize success. It’ll ensure better processes for the end user and help maximize the potential from the transformation.

Papering over cracks

As technology is changing rapidly, leaders realize that they need to adapt to a digital transformation for your company to evolve, innovate and grow.  And increasing efficiency with technology is key. However you can’t build new tools on top of broken systems and expect success. For a business to undergo the digital transformation processes need to be built from the ground up. You need a strategy to phase out legacy systems and eventually adopt cloud-based technologies to streamline the infrastructure.

By moving in this direction and successfully completing a digital transformation, you’ll be more connected and data rich. From improved personalized customer experiences, to more streamlined business processes, richer and more actionable data.

Although the process seems overwhelming, don’t rush in. Research, refine and define your roadmap for your digital transformation. By taking your time you can realize all of the benefits you have hoped to achieve.