6 Reasons Why Digital Transformation Fails (And How to Make Sure Yours Succeeds)

You don’t need to be a business veteran to know the importance of keeping up with the pace of change.

As actor Sam Waterston once said, “If you’re not moving forward, you’re falling back.”

This is what’s at the heart of digital transformation – but not every company has the luck of companies like Netflix or Nike.

If anything, it’s the opposite. Research from Deloitte showed that 70% of digital transformations fail. Though that’s a sobering statistic, it doesn’t mean that your company shouldn’t pursue digital transformation at all. You just need to keep a few things in mind.

This article will explain why digital transformations fail and how to avoid the pitfalls.

Lack of alignment to business outcomes

As an organization, your business goals and outcomes should influence everything you do. Digital transformation is no different – and this is where a lot of initiatives can fall apart.

If the transformation project isn’t aligned with business outcomes, it might focus on initiatives that don’t contribute to strategic goals. This can cause resources and efforts to be wasted on projects that don’t provide value.

Lack of clear vision for the project

Clarity is a key indicator of whether digital transformation will do well or not, and it’s not hard to see why. Miscommunication is inevitable when team members are unsure about the purpose or implementation of an initiative.

Additionally, this lack of clarity can result in an outcome that may not meet your desired return on investment. The key here is to decide what “digital transformation” means to your company. Is it improved efficiency? A more collaborative company culture? Easier customer interactions? Defining your project’s end goal early helps everything else, like budgets and timelines, fall into place.

Lack of customer involvement

Given how vital customers are to the success of a business, you’d think they might be obvious choices to include in a digital transformation journey. But this isn’t always the case.

Take banking as an example. A new online system may have the seal of approval within the company, but it’s worthless if customers can’t use it. You should make sure to communicate with your customers. This isn’t just important during digital transformation, but also before. By getting their views, you can make sure that the transformation you’re hoping to bring in really does provide value for the people that mean the most.

Lack of long-term commitment

No digital transformation worth its salt was ever completed in a quarter. They’re long-term projects needing similarly long-term commitments, especially from people like the CFO.

Some of this comes down to practical areas, like budgets. However, it also has to do with mindset. Every big project has ups and downs, but if the business case is solid, management should stick with it.

Lack of leadership support

Leadership support is one of the main things that can make or break a digital transformation. Leaders are key in guiding, driving, and sustaining any major change, and digital transformation is no exception.   Without their support, various issues could arise – including a lack of resources, momentum, and risk management. Making sure a clear roadmap is in place as early as possible is one way to make leaders more likely to support plans.

No way to determine success

Seeing the end product of all your efforts is nice – but digital transformation doesn’t end there. The broad goal of most digital transformation projects is to increase value. This, of course, is even harder without metrics.

Not having them means you’ll never get a full view of whether your project has been a success or a failure. This brings up problems at every stage of the project. Not only is it harder to track progress during the project, but it breeds a lack of accountability, and can make investments harder to justify. Organisations must establish clear KPIs and success criteria from the beginning. These metrics should align with the organisation’s goals and objectives, and should be regularly monitored, and communicated to stakeholders.

Digital transformation isn’t an easy task by any means – but it’s far from a fool’s errand. Whatever form yours takes, avoiding the common mistakes we’ve listed gives your digital transformation more chance of being in the elusive 30% that succeeds. 

Want to ensure the success of your digital transformation?

Contact PKF Smith Cooper Systems today to learn more about our Sage software solutions.

Call us on 01332 959008 or visit our website, pkfscs.co.uk.