What Causes So Many High-Profile Digital Transformations to Fail?
GE, Ford, Procter & Gamble, and Nike are examples of just a handful of the companies that have at some point of time failed in some aspect of their enterprise digital transformation journey. Here’s why: The initiative to create a digital business unit at GE did not produce the anticipated outcomes because the corporation failed to see that it needed to construct a new business model and focus on digital customer experience; Ford established a digital service segment, but it was unable to integrate it with the rest of the corporation, where it was required. Instead, while developing a digital investment, P&G failed to evaluate the complete market.
According to a research by BCG, 70% of the digital transformations fall short of their objectives, often with profound consequences. Going by these stats, there can be a plethora of questions that arise in one’s mind, one of them being how do wise, experienced leaders make decisions that, in retrospect, don’t appear to be that wise? They must have made the investments, would have had a lot of positive feedback from their digital leaders, upped their investments, and so on, then why did they experience failure?
The answer to these questions is simple- Despite the fact that their organizations had ample resources, the huge digital bets did not pay off fast or richly enough to offset the drain they posed on the rest of the business. However, there’s more to this than managerial overconfidence or weakening markets.
Why do some enterprise digital transformations fail?
Whether it is a big or a small organization, the journey of a successful enterprise digital transformation strategy starts with the leadership team. They should have a clear vision of where the organization is leading to. As organizations continue to follow their transformation initiatives, which have been pushed by the COVID-19 pandemic, it is critical that they avoid the pitfalls that might lead to failure.
Let’s take a look at why digital transformation for enterprises fails:
#1 Not having the correct mindset
Digital transformation programmes frequently regress, underperform, or fail outright due to a lack of correct transformation mentality. People are adverse to change by nature, but CEOs can play a critical role in facilitating the attitude shift needed for successful changes. CEOs must fully support the shift. They must establish the tone, model the behaviours that will lead to transformation, and then operationalize those behaviours.
#2 Organizational culture and alignment
The intrinsic culture of an organization can make or ruin its change efforts. The heart of digital transformation is cultural change, and existing cultures that tolerate change and collaborate will be more effective with enterprise innovative digital transformation. That’s because digital transformation always entails getting different departments to work together more logically and successfully, whether it’s transforming goods, internal operations, or how a company engages with customers and pursues digital customer experience management. Employees that are reluctant to change can be identified and given the training and knowledge they need to become advocates for digital transformation through effective change management.
#3 Not bringing in the right people
Another reason for enterprise digital transformation failures is the inability to hire the right people to lead transformation initiatives. Companies frequently fail to hire employees who understand integrated transformation strategies and have expertise in implementing them. It may be tough to find people with the proper expertise for your digital transformation team. The talent market hasn’t eased despite the pandemic-induced jobless rate. In high-demand industries like artificial intelligence and cybersecurity, there is still a talent shortage.
Companies must hire people who understand what might go wrong with such projects and can teach the rest of the organization about them. These changes can aid in the development of the necessary business processes. It’s also critical to keep people who understand your market, your business, and know the right digital customer experience strategy. A design thinking customer experience agency that combines creativity, strategy, and analytics can assist businesses in generating world-class customer experiences.
#4 Not having clear goals
Another reason why transformation efforts fail is that companies adopt them solely for the sake of doing so, without a defined purpose in mind. Organizations must define their major emphasis areas and what they are attempting to achieve from a business standpoint, whether it is cost reduction, increased agility, or increased security. If you don’t set clear goals for your company, you’ll find that individuals are pulling in different directions, there will be no alignment, and you’ll finally fail. Without a clear vision, firms are more likely to have an underfunded and misinterpreted understanding of what such transformation projects entail.
While businesses are turning to cloud adoption to speed up their enterprise architecture framework for digital transformation, it’s crucial to realise that cloud settings are very different from on-premises systems. It is important to encourage businesses to avoid adopting a lift-and-shift cloud strategy because, while it may work in the near term, the result will always be unsatisfactory. Numerous companies offer enterprise application development services and help business build a robust software architecture and increase digital customer experience engagement.
With new enterprise applications, businesses can mobilize their operations to become faster, more productive, and efficient. They can use the services of well-known organizations that provide custom enterprise mobile app development services to assist businesses to unleash the great value of mobile solutions.
Conclusion
There has been a great deal of research into the factors that can lead to the success and failure of digital transformations. What works for one business may not be suitable for another. Businesses that build up a distinct digital section from the rest of the firm and call it a digital transformation programme are setting themselves up for failure. Failure comes at a hefty price. The benefits of achievement are enormous. COVID-19 has pushed the need for businesses to transform their digital capabilities across all industries. The amount of time available to accomplish gradual results is insufficient but having the success factors in place will make all the difference.
