Six Reasons Why Your Digital Transformation Initiatives Could Fail


Unless you are living under a rock you will agree that the COVID-19 pandemic spurred innovation in the way we work. Every organization has been assessing the viability of remote workers and rethinking its investments in office space.

Digital transformation such as electronic signatures and digital documentation is undoubtedly a key component in responding to disruptions in work and business ecosystems. This is the process of creating or refashioning new business activities using digital technologies to meet customer and market expectations.

The digital transformation typically includes:

  • Reduce costs
  • Automating processes
  • Enhancing user experience
  • New technologies implemented
  • Change the culture of your company

It changes how organizations work. There are many collaborative platforms today that allow remote workers to streamline project monitoring and improve efficiency.

Organizations optimize their processes and systems, making them interoperable and flexible enough for reliable business intelligence and future success. This is the reason digital transformation is so important.

However, it isn't all that easy.

According to research, 80% of businesses have accelerated their digital transformation plans by 2020. 76% now invest in emerging technology. Despite the impressive statistics, it is important to keep in mind that 70% of digital transformations fail.

Furthermore, only 5% of organizations that are involved in digital transformation can reach or exceed the expectations they set. What are the causes of this failure? This article explains more.

Six reasons your digital transformation efforts are failing

Although digitization offers many opportunities for companies to innovate and grow their businesses, bureaucracy can slow down decision-making. For even the simplest ideas to be accepted, there are many hoops to jump through. However, that's not all. There are six main challenges for businesses when they transform digitally.

1. Not being clear about the end-goals

What are you looking to do digitally to transform your business? Are you looking to automate all your processes Are you looking to provide a more remote work environment for your employees? Are you looking to create a digital-first customer experience for your customers?

No matter what your goal, it is important to have a clear plan before you can execute any action plan. Without a clear goal, you will not see any results if you try to implement transformation efforts for the sake of it. This concept cannot be thrown off the cliff.

These objectives could include digitizing an organization's operational model, launching new products and services, or increasing interaction with external partners via digital channels.

Nike had one goal. They wanted to be more focused on customers. They had to drastically change how they used data analytics to learn more about customers and increase sales conversions.

Their new analytical approach allowed them to open concept stores, increase membership opportunities and improve online and offline shopping. Their stock price increased from $52 to nearly $88 after two years.

Mark Taylor, the Director, suggests that you should not be vague in your goal-setting process. Instead, you should set goals, such as the number of campaigns that will be run each month, the percentage of transactions that will migrate from one channel to the other, and the level of personalization.

Clear targets will help you set the right goals for your organization and prevent backsliding in tough times. It also helps you decide which initiatives to pursue to make the most impact.

2. Not addressing talent shortage and internal resistance to change

Cliently founder Spencer Farber said that your ability to succeed in your digital transformation efforts depends on your people. Basic mistakes like underestimating risk and setting unrealistic goals can be made if you don't have the right experience.

To achieve transformation, you need to identify and quantify the skills gaps and then refine and develop your talent.

These could be product managers who can anticipate customer needs and design virtual assistants, or software engineers with the most recent programming languages.

The digital revolution requires that older workers learn new skills and discard old habits. You can also train and develop new employees with a new mindset.

According to research, 90% of organizations think they need some type of talent. and 37% of them believe that digitization requires significant changes in the talent structure.

You must not only make the best hires but also identify and remove any informal organizational hierarchy which knowingly or unknowingly increases resistance to change. Here are some ways to inspire your employees for digital change:

  • Employers with risky projects should not be fired if the transformation fails.
  • The incentives system uses scorecards to track performance and progress in critical areas.
  • To make them feel positive about the future, educate them on what their contributions mean and encourage them to work for it.
  • A senior leader can take on a small project of transformation to show how the rest should view the changes.

Digital transformations can be a success with the right talent, whether you are looking to hire or upskill existing employees.

3. Senior leadership buy-in should not be neglected

For specific tasks within a company, "This is how it has always been done" is often the most common explanation. It is possible that the senior management does not agree with changes to internal policies.

This could be because of a lack or misinterpretation of the project, differing priorities, or poor technical insight. These issues can be eliminated by creating a culture that emphasizes the importance of communicating what you are trying to achieve and the problem you wish to solve.

It may seem tempting to hire outside talent to fill the talent gap. But, if the change is not initiated within the organization, then nothing will happen. Leaders need to understand that employees are not free to make changes.

They need to be able to dedicate enough time and attention to encourage the desired behavior change and adapt accordingly. Leaders should use storytelling to communicate their critical objectives and create a situation that resonates with employees, rather than presenting endless lists of figures, charts, and boxes.

4. Transforming without putting the customer first

Your customer is your support. You wouldn't be where you are today without them. Your bottom line may be affected if digitalization doesn't positively impact them.

One common example of transformation is the introduction of social media as a new customer service desk. Social platforms allow customers to communicate with one another and have become a standard for all businesses, regardless of size.

This allows you to respond to customers' needs faster. Your business will benefit greatly from engaging customers right where they are. Customers also benefit from being active on social networks.

Instead of calling you and waiting in line for their turn, they can drop a message directly on one of these platforms.

Mark Magusara and Howmanandvan say that digital transformation can help any business reach new heights if it's done for the benefit of customers. It might be worthwhile to survey your customers to find out what services or changes they want from you when planning digitization.

5. It is not possible to think through the technology required

It can be difficult to maximize the technology's potential to achieve a particular goal, even though it is available to everyone. If your business is in highly regulated industries, and you wish to create a video-first communication environment for your employees, it's not possible to just use WebEx or Zoom.

It is also important to consider a new security and compliance infrastructure. It is a waste of effort to revive a business model that relies on digital technology, without considering all of its components. Successful transformations use more technology than other organizations -- from cloud-based and mobile internet technologies to IoT, design thinking tools, and IoT. A strong technological foundation can facilitate complex information analysis, establish cross-functional teams with end-to-end accountability, and make data available in a workforce. This makes digitization more efficient and successful.

6. Assuming that a transformation is a one-off event

Even if businesses are not required to undergo the same level of transformation, they will never be completely digitally transformed. It is important to plan for continual improvement once digital has become an integral part of the organization. It may be possible for a business to move their inventory onto an eCommerce website and set up shipping and payment processing. They will need to adapt again depending on market conditions, customer expectations, and technological advances. Therefore, you must be flexible while still adhering to your long-term goals. Your workforce must be able to challenge existing systems and constantly seek out ways to improve their work.

One thing is certain: digital transformation is complicated and will disrupt the workplace. It is possible to make the necessary cultural changes through active communication and implementation. A roadmap should be created that promotes progress by integrating behavioral, technological, and procedural changes with the necessary expertise and resources. Encourage a culture of continuous innovation and transformation.

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