Depending on where you look, digital transformation initiatives are reported to have an extraordinarily high failure rate of anything up to 80%. Digging deeper, specific reasons vary from one organisation to another, but it’s not unusual for issues such as unclear strategic goals, fragmented data, an inability to scale, internal resistance, or a myriad of other problems to derail even the most well-funded efforts. In monetary terms, this adds up to an eye-watering “$2.3 trillion wasted on unsuccessful projects globally so far,” according to one estimate.
This remarkable level of underperformance belies a market that continues to boom, with one industry projection putting growth at over 25% a year and trending to over $4 trillion in value by the end of the decade. Clearly, this situation raises various fundamental questions, perhaps most importantly of which are what is going wrong with so many projects, and how can organisations get digital transformation right?
What’s going wrong?
One of the most common pitfalls is that, rather than focusing on the underlying business problem, leaders favour a technology-first approach. Among the various problems this kind of workback mindset can create is that by letting the digital element of the overall transformation dominate, by definition, people and processes must follow. Instead of seeing the efficiency gains they wanted, businesses deploy mismatched tools and workflows that don’t deliver, while employees wonder what has changed for the better.
Another significant issue is a lack of a clear, organisation-wide strategic vision. Without leadership alignment and strong communication at every stage of the process, digital transformation efforts often remain siloed within individual departments or teams, instead of being embedded across the wider business as originally intended.
Other problems, such as those associated with internal resistance to change, can also frustrate strategic objectives. It’s quite understandable, for example, that employees who’ve been burned by failed transformation efforts in the past are cautious about new digital-led change, particularly when it is not clearly explained or supported with training. In these circumstances, even the most beneficial initiatives can find it difficult to gain the support they need for success.
Getting digital transformation right
Irrespective of whether a digital transformation initiative is relatively simple or extremely complex, success depends on having a clear purpose and holistic organisational alignment. This should start by identifying the real-world business problem that needs solving, and rather than asking what a new technology can do, leaders should find out where the organisation is struggling and what outcomes need to change.
Establishing this kind of clarity helps avoid the trap of following the digital transformation hype or rolling out tools with no compelling use case. It also enables more effective engagement with the teams that you’re asking to change how they work. This is a crucial consideration because when people understand the reason behind a transformation and how it connects to their roles, they are far more likely to get on board.
Ongoing communication and feedback are equally critical. Don’t forget, effecting transformation is not a one-off event but a process. You must test, refine, adapt and, when necessary, re-transform your strategy over time. Creating the right space and processes for feedback and then adjusting the way you integrate digital technologies based on real user experience helps minimise resistance and builds support from within.
Manage your expectations and take it one step at a time
Even with the right strategy and strong internal support in place, digital transformation is rarely a seamless experience. Some organisations may see mixed initial results. They might also face early adoption figures that are lower than anticipated. Elsewhere, uptake may stall because they haven’t properly integrated new systems into existing workflows or because teams are unsure how the changes affect their responsibilities.
But low numbers at the outset are not necessarily a sign of failure. What matters more is whether those numbers improve over time, and whether the transformation is driving meaningful change. Indeed, it’s important not to define success solely by short-term return on investment. A more useful approach is to look at patterns, such as whether teams are beginning to use the new tools more effectively, feedback is improving, and workflows are evolving in the right direction. These are the true indicators of an effort that is gaining transformative traction.
It is also essential to think beyond metrics because ultimately, the wider cultural impact matters just as much. Recognising individuals or teams who embrace new ways of working, creating support communities around new tools, and reinforcing the purpose behind the change all help embed transformation into the organisation’s DNA.
- Digital Strategy