3 key reasons why digital transformations fail and what you can do about it!
Archana Shetty
Vice President – IT Projects | Driving business success with people, strategy and technology! Blue Ocean Strategy | AI, Digital Transformation | Executive Coaching | Leadership Development | Professional Speaking
Digital transformation has emerged as a crucial strategy for organizations aiming to thrive in an increasingly competitive and technology-driven landscape. While the potential benefits of digital transformation are substantial ranging from enhanced operational efficiency to improved customer experiences - many organizations encounter significant challenges along the way. Alarmingly, research indicates that approximately 70% of digital transformation initiatives fail to achieve their intended objectives. History is littered with examples of failed transformation efforts.
With the global spend on digital transformations set to reach $3.4 trillion by 2026 according to IDC, and research by McKinsey, it's never been more pressing for businesses to rethink how they can improve the odds of digital transformation success.
In my experience leading many digital transformative programs, I have noticed 3 key reasons why digital transformations fail:
1. ? ? ? Lack of alignment and clarity: Many digital transformation projects fail because of lack of strategic alignment and clarity about ‘where the business is headed and why’. When there is no clarity on how value will be captured, measured and realized, it results in lack of buy-in and support required for the transformation.??
Tip: Align digital strategy with business objectives. Outline the value it will deliver to business and exactly what you want to achieve in order to provide your team a direction. Energizing, empowering and connecting the why is at the center of a successful digital transformation program.
2. ? ? ? Lack of leadership skills to manage change: At the heart of most failures is not the technology, it’s managing change. The most prevailing reasons for failure are people not supporting change or resisting change. Without their support, any change initiative is bound to fail. It’s important not to lose sight of the fact that people remain at the heart of any business. Therefore good leadership is critical to leading successful transformation. According to a study done by MIT Sloan Management, 87% of C level executives acknowledged that they don’t have the right leaders for digital transformation though they believe that digital will disrupt their industry.
Tip: Develop digital leaders with smart skills like emotional intelligence, people management, storytelling that are essential to lead change and transformation.
3. ? ? ? Wrong choice of technology and / or Suppliers:? Choosing the wrong technology or solution provider can be one of the most expensive causes of digital transformation failure. Non compatibility with existing systems, non-compliant with security protocols or non-adaptive tech stacks that are not able to accommodate future growth and changes could hinder the success of the digital initiative.
Tip: Conduct due diligence when choosing the technology stack and solution provider. Seek guidance when evaluating and selecting the solution provider who understands the business needs and choosing the right technology stack that can scale.
Embracing a proactive and thoughtful approach with good strategic planning, digital leadership and the right partners for transformation will not only mitigate risks but also empower businesses to harness the full potential of digital technologies, ensuring you remain competitive in the ever-evolving digital landscape.
I help CIOs at consumer products companies reduce IT costs more than $18MM per year by driving IT portfolio and services optimization.
1 个月Thanks for starting this insightful discussion Archana Shetty . Alignment, change management, and the right tech solutions and partners are all important to success, and when a transformation fails it can be easy to point back to one of these reasons. In my experience, monitoring key metrics for each of these areas is also critical because no program is perfect from the start. Do you have any other suggestions on how to make sure the program stays on track?
I Help New Leaders in High-Tech Thrive in Their Roles and Double Their Chances of Getting Promoted | Leadership Development | Career Development | Communication Skills
1 个月Archana Shetty Spot on! Digital transformation isn’t just about adopting new tech—it’s about aligning strategy, empowering leadership, and choosing the right partners. When those pieces fall into place, transformation becomes much more than just a buzzword—it drives real, lasting change.
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1 个月One size does not fit all. But the techniques can be from a proven framework. Thanks for the great tips, Archana.
Founder of One Earth & Unite on purpose, Author of Brand Famous, Global speaker,
1 个月Great insights! Alignment, strong leadership, and selecting the right technology are crucial for digital transformation success. Careful planning and collaboration can definitely help overcome these common challenges!
Interesting perspective, Archana. However, we would argue that many digital transformations fail due to an overemphasis on technology at the expense of understanding customer needs.