Eight reasons why Digital Transformation efforts fail in 2023

Published on May 2, 2023

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Real Digital Transformation must fundamentally change how you deliver value to your clients. A new application or platform is not ‘digital transformation’; neither is an isolated mobility initiative or allowing a few people to work from home.

Digital Transformation is difficult. It means integrating digital technology into areas of a business that unlock possibilities for people to thrive and do new things for their customers. It is no wonder that many organisations that attempt digital transformation fail.

Here are eight common reasons why digital transformation efforts fail – and what you can do to avoid these errors and maximise your chances of success. 

 1) No strategic planning

Digital Transformation
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Digital transformation is a vital issue that you cannot separate from social and organisational support.

It is a comprehensive transformation that covers business models, product innovation, and user experience, in addition to talent, management, process, ecosystem, and strategy. There is an increasing necessity for faster deployment of a digital transformation strategy due to future and present shifts and changes.

The majority of companies do not have a clear plan or digital roadmap in place that can assist them in gaining full team commitment when it comes to their digital transformation journey. The roadmap illustrates where your organisation is now and where you are going so, it’s clear to see why digital transformation efforts fail if this is not in place.

To start your digital transformation journey, the aspect of strategic planning is non-negotiable. The first step to strategic planning is to gain evidence. Conduct an audit to establish a benchmark of where your company currently lies regarding digital.

Asking questions such as what your digital strengths and weaknesses are, what your competitors are doing, and what your customers demand and expect is vital to establish informative and usable evidence. It is crucial to consider your customers as seemingly simple aspects, such as reviews on your product or service, can affect your business. Remember never to ignore a customer’s feedback and always respond politely.

Establishing clear objectives is the next step in the process. Designed initially as a website review tool, 5S marketing goals, can assist in developing your business objectives. The user-friendly ‘objective generator makes establishing company goals easy.

However, it is essential to remember that business objectives are constantly changing and adapting to the needs of customers and markets. Starbucks, for example, had to adjust their business objectives to embrace digital, by including aspects like free Wi-Fi and mobile payments.

So, the process of digital transformation can be complicated. In noteworthy institutions, this process starts with discovery, establishing users’ needs, and then alpha.

Alpha involves building a working prototype that stakeholders can use to understand a function better. The alpha stage must take no more than eight weeks. Beta is stage three, and this is where you test a service until it reaches the final stage, stage four. Stage four is live.

To launch your digital transformation strategy, you need a high-level advocate. Ensure you have buy-in from the C-suite gaining support from the highest level. Having a clear vision is also essential. Make sure your vision is memorable, concise, and influential. Lastly, it would help if you had a digital team. Forming a group enables you to transfer knowledge, provide support and allow existing staff to adopt digital.

2) Careless technology adoption

Research suggests that the directors and senior managers of a company all share the same concerns when it comes to changes within the cooperation, and that is the risk that comes with digital transformation.

One significant risk associated with digital transformation is the money that you invest in it and how much of that money seems to go to waste. A recent survey found that spending $900 billion out of $1.3 trillion was in vain on digital transformation efforts in 2018.

Money gets wasted when organisations do not utilise technology effectively and when they adopt a lackadaisical approach to technology.

Technology provides an array of possible avenues for improving company’s productivity levels and customer intimacy, however, if misused and done without the right mindset to transform current operations and practices, the process inevitably becomes flawed.

To avoid careless technology adoption, companies need to remember five key steps. Namely, know your business strategy, leverage insiders, design customer experience from the outside in, detect employees’ hesitation and fear about being replaced, and lastly introduce Silicon Valley start-ups.

  • Before investing in anything figure out your business strategy

Before you introduce digital transformation into your company, you first need to know your business strategy. When managers and directors look into enhancing the organisation’s performance through the use of digital technologies, they usually have a specific tool in mind. However, if this is not in line with the overall goal and strategy of the business, it may not work.

  • Leverage insiders

Organisations often look into outsourcing consultants when they want to transform their business digitally. However, it is worthwhile to pursue the counsel of insiders rather than outsiders of the company. People who are working alongside you have intimate knowledge of the daily operations of the firm and know what is working well and what doesn’t work.

  • Always design customer experience from the outside in

Digital transformation is all about your customers. Making sure your customers are satisfied and receiving the attention that they deserve will make your business a success. Therefore, putting effort into receiving in-depth feedback from customers is very useful as it allows you to see the company’s strengths and weaknesses. In addition to this, customer feedback can assist in developing digital technologies that will enable you to have greater transparency about how people respond to your services.

  • Recognise employees fear of being replaced

Technology is at the brink of power, and this is a well-known fact. Everyday devices are getting smarter and making manual work a thing of the past. Due to this, many employees may feel threatened that the digital transformation could replace them. This fear leads to employees resisting the change to secure their jobs. While this may not be the case, leaders and managers must acknowledge these fears and emphasise that the transformation is an opportunity to upskill their expertise for the ever-changing market of the future.

  • Bring Silicon Valley start-up culture inside.

Known for their agile decision making, Silicon Valley start-ups are notorious for their agile decision making, quick prototyping and flat structures. Adopting a flat organisational structure enables flexibility as making provisional, smart decisions across the organisation can be hindered by traditional hierarchies.

3) Customers are not top of mind

Being customer-centric should be a priority and be top of mind during digital transformation efforts. The adage ‘Customer is King’ has a new significance in the 21st century as savvy consumers demand flexible, in addition to personalised ‘customer-centric’ service. Resolving customer-centric problems, optimising the customer experience, while removing pain points must be part of your strategic plan.

To accomplish this, immerse yourself in a paradigm shift and map out the stories of your customers, linking them to budget, personnel, space, and time. Then follow the storing, executing them, and delivering results.

Your strategic plan can use crowdsourcing from hundreds of people to paint an accurate picture of everyone’s stories. The focus revolves around revenue growth, process optimisation, and cost-efficiency. Executing on customers ideal interactions while deploying artificial intelligence is the main aim.

4) Organisational Resistance

The adoption of digital transformation for companies is imperative in today’s fast-paced business market. With technological change and disruption taking place at an alarming rate, it is little wonder why many businesses all around the world are setting up digital transformation programs.

As hard as it is to set up a company for digital transformation success, one of the hardest parts of the process is changing individuals’ mindsets and getting them out of their comfort zone, going against their desire for stability and instinctive resistance to change.

For many employees, changes within the company may feel like chaos. The tension that digital transformation brings to the once predictable workplace may cause delays in the progression of change. However, this change is necessary if companies are to stay ahead of the ever-changing technological landscape.

Companies that have been running successfully for many years with a low staff turnover usually find the adoption of the digital transformation most challenging.

It is critical for company leaders to discuss the changes that are taking place within the organisations to prevent any confusion. While the roadmap for technology implementation mostly lies in the perception of individuals, one cannot ignore the barriers that it brings with it, namely; inertia, doubt and cynicism.

The first barrier, inertia, is people being inactive or doing nothing. Inertia is dominant in a company when the company appears to be doing well without any technological assistance.

Employees of the organisation often question why the digital transformation is necessary at all if the company is successful. However, if every company only waited until there is a crisis to transform and switch to a digitalised transformation, then it may be too late. Managers and leaders must articulate the reasons for the change for the businesses to be successful.

The next barrier is doubt. Doubt occurs in every organisation. Employees understand that change is necessary for the business to grow. However, there is always that element of uncertainty of whether or not things will work. Some employees may have seen a failed change program which fuels their doubts about the current digital transformation.

When people don’t believe in the application or the change, it may set it up to fail. As with the self-fulling prophecy, the digital transformation can fail if the very people who are meant to drive it forward don’t believe it can work, so they end up taking a step back waiting for it to pass.

Cynicism is a barrier that frustrates the leaders and managers of organisations the most. Whenever the digital transformation runs into problems, employees will point out that they always knew that it would not work out, or they would say that they knew they were right to doubt the leadership of the change. The pessimism is frustrating for leaders as all programs run into challenges. The critical element here is to keep pushing forward and to adapt and test new ideas to make things work.

5) Pursuing agility without understanding it

Agility is a way of working that emphasises iterative planning and delivery. Agile has roots in product and software development and strives to meet business objectives while delivering value to customers early and often. Individuals are always expected to perform at speeds higher than the pace of disruption if they are to thrive in the Age of Digital.

To achieve this, you need to include all facets of business and have a fundamental shift in mindset. Businesses agility is a goal for many organisations; however, if you do not understand agility, you cannot drive it by emphasising flow, principles, and focusing on outcomes. The world is rapidly changing with much unpredictability, so organisational agility is paramount.

Organisational agility is made up of three critical capabilities, namely:

  • Hyper-awareness: The ability to understand the external and internal aspects of your organisation. External aspects include elements such as new competitions or business models and internal issues include what is going on in your organisation.
  • Informed decision-making: Basing a decision on evidence.
  • Fast execution: Turing decisions into actions as fast as possible. Hyperawareness feeds off this capability.

6) Going through a transformation too fast 

Trying to implement changes too quickly without proper planning, assessment, or testing can be detrimental for an organisation, regardless of how pressing the need for change may be. 

While it is important to embrace change and stay ahead of the curve, moving too quickly can lead to multiple problems. For example, the workforce may struggle to keep up with the pace of change, which can result in unnecessary errors and mistakes. Additionally, going too fast can create confusion and resistance from employees who may feel overwhelmed or inadequately prepared to adapt to the changes. 

Furthermore, if a company rushes through a digital transformation without first assessing their current technology infrastructure and determining their strategy and plan, they may overlook critical flaws in their system that need to be addressed before implementing new tools or processes.  

In order to avoid these issues, it’s important for companies to strike a balance between moving quickly and methodically assessing the feasibility and impact of each step in the transformation process. 

7) No shared vision 

No shared vision is another reason why digital transformation efforts can fail. This can occur when different departments or stakeholders within a company have different ideas about the desired outcomes of the digital transformation, or when there is a lack of communication and collaboration between different teams. 

When there is no shared vision, it becomes difficult to create a clear roadmap for the digital transformation effort and to prioritise different initiatives. This can lead to a lack of direction and focus, which can cause delays, increased costs, and ultimately, failure of the digital transformation effort. 

To avoid this, companies need to establish a shared vision and goals for digital transformation that are communicated clearly to all stakeholders involved.  

This will help ensure that everyone is working towards the same objectives and making decisions that support the overall strategy. It may also involve creating cross-functional teams to encourage collaboration and alignment toward a common vision. 

8) Insufficient investment in training and upskilling 

Training and upskilling help employees understand new technological processes and systems, empower them to adopt change and integrate new ways of working into their daily routines. But if this crucial aspect of transformation is ignored, employees can become a roadblock, act resistant to change, or miss the boat on new capabilities. 

To implement a successful digital transformation strategy, organisations must invest in training and upskilling.  

A plan that includes regular training sessions, support from mentors and leaders in the company, opportunities to learn and ask questions, and real-life training scenarios can quickly and effectively equip employees for success in the digital world. 

Organisations should develop an organisational culture that embraces lifelong learning and continuous professional development, where employees can learn new skills and technologies at their own pace. By incorporating training opportunities, employees will gain new perspectives, confidence and better adapt to new initiatives seamlessly. 

On top of that, measurement is critical. Management should evaluate the success of employee training, identify potential gaps, and determine if learning objectives are being met. Assessment, feedback and continuous improvement should be applied to the training process frequently. 

In conclusion, during a digital transformation, organisations must not forget their most important asset their people.  

Any successful transformation strategy must incorporate comprehensive training opportunities that focus on equipping employees with the required skills to achieve the business objectives. Doing so will keep employees engaged, motivated and well-prepared to adapt and thrive in an ever-changing digital landscape. 

Transforming and digitising your business will assist in improving your performance, so it is vital that you become a more agile version through digital. With a passion for entrepreneurship, innovation, and digital transformation, Experteq is an expert in the implementation of strategic digital solutions. 

Visit our Consulting and Professional Services page to find out more about how Experteq can assist your organisations on its digital transformation journey. 

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