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Four Common Reasons Why Enterprise Digital Transformations Fail

While businesses agree that digital transformation is imperative, few are able to successfully implement. Check out the top reasons why so many digital transformations fail.

Digital Transformation is currently one of the most trending phrases in the business world. Irrespective of whether the company is a Fortune 500 giant with decades of experience or a small startup with just a handful of employees – many enterprises are in the midst of some form of digital transformation.

They leverage the power of cutting-edge technologies such as cloud computing, AI, machine learning, big data, and others to provide customers with an enhanced experience and to streamline internal operations and processes.

The Hard Truth about Digital Transformations

Not all digital transformations are successful. In fact, many are failing outright. Numbers that illustrate this includes:

  • Over 70% of digital transformations fail
  • One in five executives believes that digital transformation is a waste of time.
  • More than half of 400 polled executives in the US stated that their companies aren’t executing digital strategies successfully.

As is evident, the success rate of digital transformation is sobering. Let’s take a closer look at key reasons that derail digital transformation.

Top Reasons for Not Getting Digital Transformations Right

Reason #1: Lack of Consensus on What Digital Transformation Means

According to Wipro Digital, over 35% of executives cite the lack of a coherent idea and strategy as one of the main barriers to attaining success in digital transformation. For instance, your operations team may view digital transformation as a way to enhance efficiency, while the marketing team may consider it a means to increase customer engagement.

Step One in your digital transformation should be to, set up a clear strategy,  define your objectives, then, communicate this relentlessly with your entire team to ensure everyone is on the same page.

Reason #2: Lack of Support from the Board

Digital transformation is a massive enterprise-level process, and it requires the support of both the executives and the board. When the board and other top-level stakeholders are not involved in the process, it delays the transformation process, with constant requirements for approval and validation.

To avoid this, ensure that the executive team pitches the idea of the transformation and the goals to the board, to get them to agree to it completely. Remember that digital transformation is not something that concerns only a few departments like the IT and sales teams. Instead, it’s an enterprise-level transformation practice that requires support and commitment at all levels.

Reason #3: You understand the “Why’s” but Fail to Define the “How’s”

Very often, companies realize that they are in need of digital transformation, but are clueless on how to proceed. What must be changed? Which changes should be made first? How to bring about these changes? What policies have to be updated and which processes have to be eliminated?

These are crucial questions to be addressed. One of the main reasons for the failure of digital transformations is that companies approach it with strategies that aren’t aligned with the short-term and long-term goals.

Begin your digital transformation process by identifying your objectives and goals. Work out what you plan to achieve, and then devise a complete roadmap for the process before getting started.

Reason #4: Lack the Right Talent and Resources

Digital transformations require new talent. You may need to add several new people to the team, including software engineers, data analysts, product managers, AI experts, user experience managers, and others. Tackling digital transformation by assigning additional roles and responsibilities to the existing staff is a common method for failure.

Similar to human talent, the success of your digital transformation largely depends on the available resources. Digital transformations can die a slow death if you are consistently being held back due to operational costs and budget for implementation.

Before you launch the implementation, ensure that you have access to the required talent and the necessary resources.

Reason #5: Digital Transformation Doesn’t Happen Overnight

Successful conversion to digital is a lengthy process. You have to initiate with a well-defined strategy, inculcate an organization-wide commitment, and then work out the right implementation and execution. An instant overhaul to digital is not possible and may not deliver the expected long-term results. Remember that digital transformation takes time to embrace and adopt, but the results are well worth the efforts.


Chander Sharma
Founder and Managing Partner,
bizXL Solutions

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