Four Reasons Why Digital Transformation Efforts Fail
Oct 12, 2023
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Alwyn Joseph, CRO at FPT Software, discusses four reasons why digital transformation efforts fail. Topics include the mistake of focusing only on technology, the importance of cross-functional team engagement, mainframe migration and approaches, and three action items for success.
Digital transformation projects fail when organizations focus solely on technology without considering end goals or desired business outcomes.
Lack of engagement and alignment across cross-functional teams leads to failure in digital transformation initiatives.
Deep dives
Starting and ending with technology
Digital transformation projects often fail when organizations focus solely on technology without considering the end goals or desired business outcomes. For example, a manufacturing company invested millions of dollars in transforming their technology, but failed to meet regional requirements, resulting in low adoption. By starting with the end goals and aligning technology with business outcomes, organizations can ensure success.
Lack of cross-functional team engagement
Another reason for the failure of digital transformation projects is a lack of engagement and alignment across cross-functional teams. When transformation initiatives transcend different departments and impact various user groups, it's essential to involve and understand the needs of each team. For instance, a tech-savvy company faced low adoption rates when they implemented new tools without considering the user experience or workflow. By engaging cross-functional teams and addressing their specific requirements, organizations can increase the success rate of their transformation efforts.
Failure to be people-focused
Digital transformation initiatives often fail when they neglect the human aspect of the process. It is crucial for technology leaders to define a bold vision and sell it to the entire organization. Additionally, it's important to communicate the benefits of the transformation to all stakeholders, from C-level executives to individual employees. For example, a manufacturer faced resistance when trying to modernize their legacy systems because they didn't involve the employees who relied on those systems. By engaging employees and demonstrating the positive impact of the transformation, organizations can overcome resistance and drive successful outcomes.
Involving customers too late in the development process
Neglecting to involve customers early in the development process can significantly hinder the success of digital transformation. Engaging customers and obtaining their feedback before building a product or service is crucial for its market acceptance. By involving customers in the envisioning and execution stages, organizations can avoid late-stage surprises and ensure that their offerings meet customer needs. For instance, startups often overlook customer engagement and end up with products that fail to sell. By obtaining early market feedback, businesses can increase their chances of success.
Alwyn Joseph, CRO at FPT Software, discusses his recent article for Information Week describing four reasons why digital transformation efforts fail. Researchers like McKinsey, KPMG and Bain say that the risk of failure falls somewhere between 70% and 95%. Ever wonder why such a high failure rate? Listen here for more.
