What are the reasons for the failure of digital transformation?

A recent Flexera survey of CIOs and other senior IT leaders showed that more than half of the respondents ranked digital transformation as their top concern, followed closely by cyber security, cloud first/cloud migration and improvement Customer experience, these are closely dependent on digital transformation.

Digital transformation is no longer just a buzzword; companies have realized that digital transformation is a necessary condition for success. Although more than one trillion U.S. dollars has been invested in transformation work, there is still the possibility of failure.

A study by the Boston Consulting Group shows that approximately 70% of digital transformation projects fail to achieve their goals. Some people still believe that digital transformation is all about infrastructure and IT, while 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 failure in digital transformation? According to Kristin Moyer, Gartner CEO and Outstanding Vice President Analyst of Digital Business Leadership Practice, the three major categories of failures in digital transformation are: regression, poor performance, and failure of new digital plans.

• Regression, or "transformation cleansing", refers to a brand's actions that it has failed to implement before.
• When the company is not satisfied with the project, there will be problems of poor performance. Although there may still be some small gains, the true purpose of the project has not been fully achieved.
• The failure of a new digital product or service refers to a complete failure, in which all resources deployed for the project are in vain. In this case, the only feasible option is to terminate the project.

In order to ensure that the digital transformation plan does not fail, it is necessary to understand the potential reasons that may cause the plan to fail, and know how to avoid these reasons from the beginning.

1. There is no high-quality digital transformation strategy

In a survey of 100 Fortune 500 CIOs conducted by Constellation Research & WalkMe, 77% of respondents ranked digital transformation as their most important priority in 2021. With a high-quality digital transformation plan, there is no need to worry about regression, poor performance, or complete failure.

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

Digital transformation is not just about adopting a new technology, but integrating innovation, using emerging technologies, and seeking new operating and business models. To achieve the success of digital transformation, it is necessary to find ways to completely reshape the business along the way. While proceeding, the ultimate goal should be how to improve productivity and customer experience.

If the transformation strategy is desirable, the plan should take into account the nature of the challenge to be addressed and identify the key aspects of the challenge. There must be guidelines for dealing with challenges. It should clearly state how you want to overcome the problems you find. The team must know which actions are more important and when to take such actions.

Without a clear explanation, they may have to rely on intuition, which can easily lead to regression. It is necessary to avoid the occurrence of scattered projects and purposeless technology injection by the team, so as not to increase any commercial value.

2. Disgust with change

Many times, we will find that many people are disgusted with any form of change in culture and way of doing things. This is the number one cause of regression, poor performance or complete failure. Is change an absolute "evil"? Why do we have to break the routine?

The mentality of all those involved in the project must be positive. Although the role of the CEO is the most important for establishing the right mentality, the leadership must carry out the leadership from the CEO to the middle management.

When the CEO is enthusiastic about transformation, and his body language and body language have been showing such enthusiasm, this spirit will infect other employees. The CEO's support for the plan greatly affected the funding source of the project.

Since most of the digital transformation plans are in charge of CIOs, they can't just be ordinary execution partners. They must act as the fulcrum of transformation and be willing to train others.

3. Do not hire high-quality talents

If you do not master the right combination of skills required for the transformation project, then the process of this effort is going to fail. Because this may make the wrong prediction, that is, think that you have every kind of talent that you need to execute a successful digital transformation.

There must be serious attention to transitional leadership positions. You need to master digital expertise and some broader skills. Characters such as determination, pragmatism, flexibility, collaboration, critical thinking, creativity, emotional intelligence, adaptability and learning agility do have a very positive impact.

Clearly know which fields are lacking talents in order to find suitable talents. When these talents cannot be hired directly, outsourcing can also be used to fill the gaps.

Fields like artificial intelligence and cyber security do not have to be dealt with fundamentally. It is sufficient to bring in personnel who have sufficient knowledge of digitalization and are experienced in carrying out such transformations.

4. Lack of necessary culture

Organizational culture can become a stumbling block to organizational transformation plans. To succeed in digital transformation, everyone in the organization must embrace a collaborative culture.

These initiatives go beyond the department, everyone needs to work as a unit to improve work efficiency. No matter what your goal is, you must go all out from improving productivity to enhancing a better customer experience.

Only by establishing a culture of collaboration among employees, between different functional departments and different departments, can we succeed in the digital transformation plan.

Transition management must be at its best so that people who resist cultural change can be quickly identified. Through education and training, they can participate in the transformation plan, and may even become the influencer of the transformation.

in conclusion

Although the above points may not be all the factors that lead to the failure of digital transformation, they will greatly help our transformation plan to succeed. No one wants to waste their investment, but digital transformation requires hard work.
Digital transformation cannot be arbitrarily successful. It must be persistent, carefully analyzed, and master all available data in order to fully understand the goals to be achieved.