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Why Do Digital Transformations Fail?

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Digital transformation is one of the biggest and most talked-about terms in the business right now, but there are a lot of misconceptions about what it is and what it’s not, and these misconceptions and a lack of general understanding on how to implement a digital transformation can lead to the failure of these initiatives. 

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More than just digitizing the existing processes a business has in place, there also needs to be applications of technology that improve problem-solving within a business and foster innovation. 

In simplest terms, a digital transformation means that you make use of technology to either modify your existing processes or create new ones. Digital transformation can also extend to culture and customer experience, but it goes beyond this. 

Overall the key focus of digital transformation should be the customer. You need to start and finish transformation projects with them at the forefront of your priorities. 

Not doing that is one reason digital transformations fail, but there are others. Around 73% of digital transformations are considered a failure at the enterprise-level because they don’t provide any business value. 

The following are some of the big reasons these efforts don’t succeed.

They Don’t Utilize Tribal Knowledge

Digital transformations need to focus on people in every way. This includes customers, but also employees. 

Tribal knowledge is invaluable information from your employees that helps you learn more about your customers, your products, and your processes. It’s this knowledge that helps you develop a competitive edge.

Instead of using tribal knowledge, many businesses will make the mistake of simply using technology to analyze data. 

This doesn’t give them the insights they need to make sure their technology initiatives are aligned to their business objectives. 

There’s so much focus on gathering data, but what about the data in the heads of employees?

Your people need to be the main component of your digital transformation. Otherwise, it’s unlikely you’ll reach your targets. 

Lack of Agreement About Goals

A big problem with digital transformation efforts, aside from not having any real goals at all, are disagreements among leaders about goals. All of the top leaders or managers within an organization need to be on the same page about what you hope to achieve with a digital transformation project. 

There needs to be agreement and buy-in before you invest in anything. 

Along with unified goals, the clearer and more specific you are, the better. 

Cultural Problems

A digital transformation relies on buy-in not only from leaders but from all employees. There needs to be a culture that’s willing to learn and utilize technology and one that thrives on ideas of innovation and finding new ways of doing things.

If your culture doesn’t support digital transformation, it will never work.

There are many cultural problems that could derail transformation initiatives. 

For example, maybe your culture is such that employees see any new technology or way of doing things as a threat to their job; therefore, they’re completely unwilling to embrace these new ways of doing things.

Another issue in terms of culture and employees is a failure of management to sell employees on new technology. Employees need to see these technology introductions as being there to help them better do their jobs, and if they’re not sold on that, they’re not going to make use of them, and no business benefits will be achieved. 

If the digital transformation feels too clunky for employees, they’re going to stick with the old way of doing things. 

Along with selling employees on it and building digital transformation into your culture, you need to deliver ongoing training and development. This facilitates a culture that is more willing to welcome new technology and ways of doing things. 

There needs to be a culture of innovation to support digital transformation too.

This means your employees know they can share their ideas and feedback to optimize everything within the organization. 

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Priorities Aren’t Clear

Digital transformation is a big term, and with it can come the feeling that you have to do it all right away. This urgency that it has to be all or nothing can be disastrous for digital transformation in reality. 

You absolutely have to prioritize and figure out what’s most important now and what can wait. You can’t transform business at the digital level overnight and trying to do so is going to create serious problems. 

When you’re rolling out a digital transformation initiative, focus on your people and your culture and then let the rest follow from there, rather than going the opposite way.