Lessons Learned: Why Digital Transformation Projects Often Fail and What We Can Learn from Them

In recent years, I've frequently had conversations with many companies eager to embark on large IT projects. The goal? To modernize, innovate, and gain a competitive edge with the latest technologies. Yet, time and again, I see the same problem arise: the complexity and costs of these projects are often severely underestimated. Shutting down an old system often proves far more challenging than starting up a new one. The result? Delays, budget overruns, and, ultimately, millions of euros in additional costs.

Too Much Complexity, Too Little Practical Fit

The pattern is striking: new systems tend to be complex but often fail to meet the everyday needs of end-users. Employees often report that the new software is slow, complicated, and far from intuitive. Instead of the promised efficiency, they end up with a system that mainly causes frustration. This is not new. Many digital projects fail because of a lack of balance between technical ambitions and actual usability.

The Importance of Domain Knowledge

One of the biggest challenges in these projects is that domain complexity is often underestimated. Sure, there are always consultants who can build technically advanced software, but the real value often lies in domain knowledge. Take the government, for example, where software developers aren’t always adequately trained in specialized knowledge like tax regulations. I encounter the same issue in sectors like healthcare and financial services, where specialized knowledge is essential to build effective systems.

Shadow IT, Hidden Costs, and Workarounds

The costs of a failed IT project aren’t purely financial. Delays and inefficient systems often force employees to find alternative ways to do their work. They spend time creating workarounds rather than focusing on their core tasks. These makeshift solutions hurt productivity, morale, and, ultimately, the quality of services provided.

The Pitfalls of 'Turn-key' ERP Solutions

Another recurring issue involves large-scale ERP solutions sold as turn-key: supposedly ready-to-use and instantly deployable. The reality often proves different. Once the contract is signed, complexity surfaces, and customization becomes inevitable. Customization within a standard solution is like "spaghetti in a box"—confusing and difficult to manage. This leads to a high dependency on the vendor and soaring consultancy and implementation costs.

What Needs to Change?

Cases like these repeatedly demonstrate that large-scale IT projects require careful planning, realistic expectations, and a deep understanding of what users truly need. Unfortunately, many organizations continue to rely on external consultants, leading to a mismatch between the solution offered and the actual needs of the organization. What's often missing is internal expertise that can critically assess solutions and ensure the new technology genuinely fits the organization.

The Way Forward: Investing in Knowledge and User Feedback

If we truly want digital transformation to succeed, we need to stop viewing failed projects as isolated incidents. These failures are valuable lessons. By investing in internal skills, starting small with testing, and continuously gathering user feedback, we can significantly increase the chances of success.

Ultimately, digital transformation isn’t just about technology; it’s about people. Without a user-centered focus, even the most advanced systems can turn into costly mistakes. It’s time to make technology serve the organization and the people who work with it.