5 Reasons Why So Many Digital Transformations Fail

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Digital Transformation

Digital transformation is a process that boosts profit and efficiency if done right. Therefore, there’s no secret as to why so many companies undergo a digital transformation implementation project. However, because each implementation is unique (depending on the inner structure of each company), it doesn’t always go as planned. 

Overall, the main goal is to simplify and streamline the workflow in a company. While simple and attractive, this is not an easy-to-reach goal even when leadership is fully involved. So, if you think digital transformation is the answer for your business, check out these five reasons why so many similar projects end in failure. 

#1: Lack of Experience or Guidance

Digital transformation is not just about replacing old equipment with technologically advanced devices. While the process does encourage the use of modern devices (for remote collaboration and faster data processing), this is only one small step in the implementation. 

In order to have a digitally transformed business, you have to identify all the processes that slow down production. Additionally, it’s important to find the right reasons behind lags, bottlenecks, or miscommunication between departments. Managers also have to learn how to define goals and KPIs without creating conflict between teams. 

All these needs and more are identified during the first stage of the implementation – analysis of the systems. This step is crucial for your digital transformation success, which is why it’s best handled by an expert with years of practice and well-documented successes. For instance, a digital transformation strategy always starts with a team of experts trying to understand a business’s processes and flow. 

So, to make sure your implementation is a success, look for a specialized firm to provide guidance and advice along the way.

#2: Resistance to Change

You’ll hear that leadership needs to be on board for a digital transformation project to be successful. 

This is true, but there is another side to the coin – the employees. This process brings change (and lots of it). People won’t be using the same processes, talk with the same people, or communicate using the same tools. 

If the employees are not trained to deal with this change and the idea of an organizational cultural shift is not supported, the implementation will fail. 

#3: New Tech & Broken Processes

If you don’t dig deep enough to find the processes that don’t work in your company, new tech won’t bring anything new. 

Take a look at your onboarding process – is it designed to give new employees a purpose within the company? Is it transparent and easy to understand? Is there a way to make it better? 

Now do the same with all the other major processes in your business and identify the weak spots. Next, reorganize everything so each process is goal-driven and working according to a well-established strategy. 

#4: No Clear Goals

Why do you want to undergo this transformation?

True, successful digital transformation projects come with improved process efficiency and increase profits. However, these are only the results of a well-designed strategy, based on clearly defined goals. 

So, what are you trying to achieve? What is your key area of focus when you think you want better processes? Do you plan to reduce production costs? Or maybe you want to make the production more flexible, so you can release more products for a wider range of customers. 

Clear goals help you set the right processes and allow employees to understand their role in this change. 

#5: Failure in Thinking Through your Tech Needs

There is a huge difference between digitization and digitalization (that many business owners miss). The first term refers to converting processes and products to a digital form. The second one is about using the right strategies to make the most out of the digitized processes.  

Therefore, when you want a successful digital transformation implementation, you shouldn’t just think about the technology you’ll use. You should also see the compliance implications and the measures you’ll need to take so the tech tools will work well with your processes. 

For instance, a business that wants to use a CMS tool to improve customer management and communication should also consider the infrastructure needed for the tool to work and the security implications of such a transformation. 

Key Takeaway

Digital transformation is a long-term project that brings about change and new tools. Therefore, businesses need to be aware of their own needs and the multi-layered approach of such an implementation.