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7 Reasons Why Most Digital Transformations Fail


A digital transformation is a complex and precarious exertion. In today’s digital technology-centered business environment, enterprises are consistently under pressure to build, execute, and attain a successful digital transformation strategy. New requirements need modern solutions. When done fittingly, it can lead to astonishing results, but when done the wrong way, it can be costly and agonizing for the business.

Businesses have no choice in the present marketplace, where digital transformation is an integral part of staying relevant. In this race of staying relevant and generating increased revenue through a digital operational revenue model, most digital transformations fail because businesses rush to implement modern technologies without thoroughly learning how they will enhance their daily operations.

1. Businesses Adopt Digital Transformation for the Sake of it 

In this age where digital transformation has is a necessity, companies are more likely to choose it just for the sake of it. It is a huge mistake that most commit. Plan, get ready, set your goals, build a roadmap, and then embark on the digital transformation journey.

Before venturing into the digital transformation, businesses need to ensure the organization is ready for a change. Being a change-ready goes beyond being able to deploy new processes and tools. Companies must be prepared to adopt a new operational model and make sure the digital transformation strategy deployment doesn’t change the company culture. A foundation for any successful change, effective personalized communication should be companies’ top priority along with implementing the right structure positions and approach to gain to become more proactive, agile, and scalable to any opportunities and challenges that come your way.

2. Not Prioritizing Customer-Experience

The customer-centric approach should always be a priority for the leaders before venturing into their digital transformation journey. An incremental mindset is still the right thing to have, but not at the cost of customer experience. The technology should give an enhanced digital experience for the customers so that they are willing to adapt to it. Consumers demand flexibility and personalized ‘customer-centric’ service. Resolving customer-centric problems must be part of your strategic plan.

Executing on customers’ ideal interactive system while deploying automation integrated technology shall always remain the main aim. For any digital business transformation, technology sits at its heart. The reality is that if the implemented technology is challenging to use, people will not use it. From the viewpoint of the customers, the digital journey they commence on through your transformation must be smooth for them to adapt to the change happily.

3. Failure to Align the Right Technology and Talent

One of the most substantial reasons for digital transformation failure is the lack of skill management within the organization. Also, not being able to choose the right platform and the technology to be deployed for an integrated solution remains a massive problem among organizations during their digital transformation journey.

The leadership group in the enterprise must liaise with their CIOs to get an insight into what is the best technology to adapt how to manage talent required to carry out a successful digital transformation. In-House talent management can be a hectic job for some enterprises given their nature of business. In this case, one can always opt for consulting firms who have successfully deployed digital transformations.

4. Confusion in Choosing the Right Approach: Siloed or Not-Siloed

Siloed or not-siloed is up to the committed leadership to decide given the nature and structure of their organization.

The siloed approach means to drive the digital transformation in products and services but only in parts of the organization. This way, the leaders can make sure that the failure of one doesn’t affect the other. The siloed approach is also viable when you have identified only a few parts or products of your company that need digital transformation. For instance, P&G reworked its failed digital transformation strategy to make it a successful project.

If the company is of nature where the whole company has a scope of digital transformation, it should be approaching the not-siloed approach. The leaders should make sure that each department in an organization is on the same page. Everyone in an organization should know their role. They should also be aware of how and what to achieve for the implementation of a successful digital transformation.

A study shows that “70 percent of siloed digital transformation initiatives will ultimately fail due to insufficient collaboration, integration, sourcing, or project management.”

Well, not if you have planned for a siloed approach effectively given that it is a favorable method to your organization’s structure.

5. Lack of Committed Leadership and Digital Literacy

Digital transformation is fast-evolving and new, which needs unique and committed attention from the leaders for its success. The need for committed leadership starts from the initial stages of digital transformation, but it becomes a must-have going ahead.

The digital transformation shall always be led at the top by the CEOs, CIOs, or the Business Owners.

Digital literacy for many leaders comes as a challenge. Digital literacy at the top-level of any business is a huge issue. Most importantly, at the board level. Less than 20 percent of board members have the digital literacy needed for large-scale processes like digital transformation.

6. Lack of Scalability and Constant Evolution

Digital transformation processes implementation is a part of perpetual transformation. Constant innovation and an agile culture should be the second most prioritized process after the actual initiation of the digital transformation process. Agile culture consistently supports the evolution cycle of the incremental business mindset.

Identify the risk that may come in the future. The agile approach of constantly evolving will help prevent the organization from threats that may come upon the businesses due to the digital transformation process. Scalability and future proof evolution is the key that opens the door to address various issues that may come your way in the future. A culture that is convivial of new concepts, even to the point of pardoning misdirected zeal, will always progress faster.

7. Failing to take an Iterative Execution Approach

Each entity of digital transformation will have various levels of risk and return factors, and hence each of them shall be treated through Iterative Execution. Iterative execution exists beyond the software development cycle. Iterative execution provides speed and acceleration while complementing each other to help reduce the risk failure of the whole digital transformation process. So, while the digital start-ups are already on it, it is high time the enterprises adapted to the Iterative execution.

Innovation velocity is a key metric in identifying the speed of innovative processes that can be adapted for digital transformation processes. Evaluating a large funnel of ideas, each of which executed at high-speed and low-cost, can be the best approach.

Successful companies like Amazon, Netflix, and Alphabet have successfully achieved it. Start-ups are excellent at low-cost and high-speed iterations while working on massive projects and ideas. Agility is the motivation for the start-ups. The main goal for these enterprises should be to set up a model for processing ideas quickly and iteratively that works equally well for large, medium as well as small enterprises.


About The Author

Pravesh Mishra | Digital Marketing Officer at Leapfrog Technology Inc.


Leapfrog helps small and medium businesses envision and execute digital transformation and innovation. Leapfrog has developed the digital flywheel that accelerates automated digital transformation and innovation.

Book a Free 30 minutes Consultation about how Leapfrog can help you bring digital transformation to your business.

Pravesh Mishra

Pravesh is involved in Digital Transformation at Leapfrog Technology.

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