Digital Transformation is really hard

Image: Joshua Sortino

It really is difficult, it can feel like re-wiring a plane while in flight. Digital transformation has become an imperative for organisations of all sizes and across all industries. It represents a holistic shift from traditional ways of doing business to a more technologically integrated and data-driven approach. However, despite the evident benefits, many digital transformations fail to achieve their expected outcomes, with estimates suggesting a staggering failure rate of from 70% - 85%* according to several studies.

Our hands on experience has identified the three main reasons why digital transformations often fail, which includes; treating it as merely an IT task, lack of effective leadership, and the absence of a clear, concise vision.

Misconception of Digital Transformation as an IT Task:
Many businesses perceive digital transformation as just another IT project – a notion far from the reality. This restricted view undermines the scope of digital transformation as it is not merely about implementing new technologies; instead, it involves overhauling the entire business’ processes, culture, and governance. While technology forms the backbone of such transformations, it's the people, their skills, and how they interact with this technology that determine success.

Businesses that restrict digital transformation to their IT departments often fail to consider the significant changes in the culture and mindset required. This lack of understanding and alignment between different departments results in resistance to change, stifling the digital transformation process. Employees must be adequately educated about the transformation, its benefits, and how it will affect their roles. Therefore, it is of utmost importance that digital transformation is seen as an enterprise-wide effort and not just an IT task.

Lack of Effective Leadership:
Leadership plays a pivotal role in ensuring the success of digital transformation initiatives. In fact, lack of strong and focused leadership is one of the biggest reasons why these initiatives falter. Digital transformation is challenging, requiring fundamental shifts in organisational structures, processes, and mindsets. Therefore, leaders must champion these initiatives, setting clear roles and responsibilities for each business function and the associated teams.

The absence of firm and committed leadership can result in the lack of direction and understanding of what needs to be achieved. Without leaders who can clearly articulate the vision and guide the way, departments can become siloed, creating a disjointed and ineffective transformation process. Leaders must also motivate and empower their teams, fostering an environment of innovation and collaboration that is vital for a successful digital transformation.

Absence of a Clear, Concise Vision:
Lastly, a significant factor that contributes to the failure of digital transformations is the lack of a clear, concise, and well communicated vision. This vision should not only be aligned with the company's overall strategic goals but should also be effectively communicated across all levels of the organisation. Each team member should understand the objective of the transformation and the tangible outcomes expected from it.

A common complaint from many organisations is a misalignment between expectations and reality. This misalignment can severely derail activities, impacting morale and causing confusion among employees. By setting clear expectations, outcomes, and deliverables, companies can bridge this gap, ensuring everyone is on the same page, and making the digital transformation process more seamless.

Digital transformation is a complex but necessary journey for businesses in this digital era. However, for it to succeed, it must not be considered a mere IT task but should be approached as a comprehensive business transformation involving the entire organisation. Effective leadership that promotes clear roles and a supportive environment, along with a well-communicated and understood vision, is crucial to the successful implementation of these digital transformations. By addressing these issues, businesses can greatly increase their chances of success, enabling them to thrive in today's highly competitive and digital-driven world.

*Source: Forbes 2016