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Posted: 02/24/2023 - by Dean Reid

Discover 8 Key Reasons Digital Transformations (DT) Fail 

Customers want better and more efficient service. Digital transformation (DT) is now a race among competitors to keep up with how customers want to buy their goods/services. Companies that resist digitizing their operations risk becoming obsolete. 

Digital transformation is not only about adopting new software or technologies, or automating inefficient processes - it is an entirely new and innovative way of doing business.

Companies must consider how staff and customers will react to the change, how much it will cost, how it aligns to business goals. It forces companies to reimagine their business model and critically think about changes that are core to their business. 

According to research by McKinsey 

  • 70% of all digital transformation programs fail due to employee resistance & lack of management support 
  • 16% of employees say their company’s digital transformation initiatives improved performance or are sustainable - that is very, very low

What are some of the key reasons that Digital Transformation initiatives often fail?

8 Key Reasons Digital Transformations (DT) Fail 

  1. Lack of Executive Buy-in - many employees, leaders and suppliers may have different ideas on digital transformation priorities and what constitutes success. Most importantly, a lack of C-Suite financial and leadership support leads to a fragmented digital transformation effort 
  2. Employee Resistance - there will be resistance to change. Cultural change is the hardest part of digital transformation, and leadership can expect frustration and pushback from their teams 
  3. Lack of Strategic Direction - ignoring the planning phase or starting without a clear digital transformation roadmap can lead to confusion. Many leaders fail to set realistic goals, define clear roadmaps, or gather the right data to make data-driven decisions. Without clear roadmaps - the implementation phase is likely to fail  
  4. Slow Return on Investment (ROI) - many companies expect to see a quick ROI. However, ROI on Digital Transformation initiatives can take years. Digital transformation costs money and it is common that digital transformation initiatives are late or over budget due to scope creep  
  5. Driving adoption of new tools & processes - digital transformation can affect every aspect of how a company operates, and the impacts on operations will not please everyone. New processes and technologies often present challenges in the form of resistance
  6. Lack IT time & skills - companies need skilled IT professionals to lead the technical portion of the DT project. Filling these roles can be a challenge with 54% of companies said they were unable to accomplish their digital transformation goals because they lacked the technical skills 
  7. Security Concerns - many companies are in data-sensitive industry sectors and privacy and cybersecurity are a significant challenge 
  8. Continuous Digital Transformation Evolution - even after the company has implemented its initial digital transformation program successfully - they can fall behind if they see digital transformation as a destination versus a journey 

If you are able to mitigate these challenges - your digital transformation initiatives have a much better chance of success. 

Poeta Digital has helped many companies achieve their digital transformation objectives - give us a shout  - it will be the best thing you have done today.