Where do digital transformation efforts go wrong?

In the evolving business landscape, digital transformation has become the buzzword of the moment. Companies across industries are realising the urgent need to adapt and embrace the digital revolution. However, while the concept of digital transformation is enticing, the reality is that it is a complex and challenging endeavour.

According to a study conducted by the renowned Boston Consulting Group, a staggering 70 percent of digital transformations fail to achieve their intended business objectives. This statistic is a stark reminder that the path to successful digital transformation is far from straightforward. It requires careful planning, strategic execution, and a deep understanding of the organisation's goals and capabilities. Simply put, doing nothing is no longer an option. The time has come for businesses to embark on the journey of digital transformation, but it is crucial to approach it with caution, perseverance, and a willingness to adapt along the way.

“The challenge is that many companies don’t know where to start. They need help creating a vision, strategy, and roadmap. These are the three critical starting artefacts. You need to know where you’re going before you can get there.”George Lynch, Head of the Technology Advisory – NashTech

Failure to Launch: Why Digital Transformation Efforts Fail

The point of digital transformation is not to become digital but to generate value for the business. According to the Everest Group, 73 percent of organisations failed to provide business value from their digital transformation efforts. 

Digital transformation is a complex process, transformative efforts can fail due to a number of reasons. Sustaining a transformation’s impact requires a major reset in mindsets and behaviours. 

Let’s look at three critical factors that contribute to failed digital transformation efforts: 

Taking a technology-first approach: There’s often a temptation among organisations to make the technology investment first and then figure out how to make it work for the business. Starting a digital transformation with big, expensive legacy-replacement technologies is starting from the wrong place. It will use up too much money and people resources, ultimately distracting from delivering the transformation benefits. It’s important to keep in mind that digital transformation necessitates a change in business processes to support the technology.

“Don’t think about it as a technology project. Digital transformation needs to be business-led. It needs to be a business transformation that’s enabled by technology.”George Lynch, Head of the Technology Advisory – NashTech

The absence of change management: The absence of change management can make or break an organisation’s digital transformation initiatives. Embracing change is hard. Many employees may have a bias in favour of maintaining the status quo. “People in the function will resist digital transformation. It’s industrial inertia. If they don’t see why or where they fit in, they’ll actively push back against change,” said Lynch. According to McKinsey, 70% of change management efforts fail due to employee resistance and lack of management. To gain traction, transformation efforts have to be linked to business owners from the start.  

Lack of up-front commitment: Understanding digital transformation conceptually is not the same as committing to doing what it takes to succeed. Organisational leaders can talk about the need for change, but if they don’t commit to the large-scale undertaking that’s involved in bringing this from concept to reality – the initiative will fail. Managers and employees at every level must accept up front their personal ownership of the transformation’s success. 

How do you develop a digital transformation strategy?

The most successful companies are those that have clear goals for their digital transformation strategy. They understand what they want to achieve by digitising their business operations, how they will get there, and what the end result should look like.

Without these capabilities built into the fabric of your business processes and culture, your digital transformation will stall. Leveraging the following steps will help ensure you craft a winning digital transformation strategy that delivers results.

Developing a digital transformation strategy isn’t easy – but it is crucial to laying a strong foundation to launch your transformation efforts. The organisations that plan ahead today will set themselves up for a brighter future tomorrow.

Understand your current situation

Take stock of your existing technology estate and the teams handling it. This lets you know what resources you have and what you need—whether it’s new talent, new processes, or investments in new hardware and software.

Start with an end goal in mind

Think of what the priorities of your digital transformation programme are and who you are looking to empower. Do you want to:

▪ Find better ways to support business leaders and empower them?

▪ Speed up the development of new solutions to respond faster to customers?

▪ Reduce IT costs and empower your operational teams?

The right priorities will allow you to set up a list of use cases for which to build applications.

Define team requirements

Identify what you need your new digital team to look like, in terms of technical skills, functional roles and operating styles.

Influence internal stakeholders,

You’ll be working very closely with business units to deliver technology that makes their lives easier. You need to build trust with all business stakeholders, as well as senior executives.

Digital transformation is a complex journey, and we get that. If you feel like you’re on your own and not sure where, or how, to start, partnering up with someone will help you realise your potential to fulfil your digital ambition.  

The key to success is to work with a trusted partner who has real-life experience of understanding and developing strategies and options that work, gained by helping other companies through their own digital transformation journeys. 

Learn more about the NashTech approach or arrange a call to discuss how we can help, email info@nashtechglobal.com.