7 reasons why your digital transformation project failed
And what you can learn from each one
So you had plans to move your organisation from the analogue era to the digital age. You wanted to create a new or change the existing business model. You identified a problem, spent hours planning on how to fix it and… it failed spectacularly. It is not working as intended, people just don’t want to use it, and there is no value added to the business.
It happens to the best of us. Actually, between 70% and 84% of digital transformation initiatives fail, they don’t bring any addition to their business value. Considering the expected $3.294 billion spent yearly by 2025, this is an enormous waste of resources.
It is a pretty well-known fact that it is best to learn from others’ mistakes. Let’s analyse the most common patterns that can lead anyone to a failure and take a lesson from it.
1. Understanding the transformation
The simple change of paper-based processes to digital ones is not what we understand by the term digital transformation. This would be more accurate to say about optimisation, changing what already exists using modern technologies. Transformation is more than that.
It is a true metamorphosis, it should touch the very core of the business and its issues. You should be open to new business models and innovative solutions. Don’t get me wrong, there is no crime in optimisation, you just can’t expect the same results from two different approaches.
Optimisation is more focused on employee productivity, creation of better customer experiences and increasing existing value, while transformation targets delivering new products or services and creating new business models that will bring new values.
2. C-level support
You won’t succeed with the major changes and reinventing the business models of the organisation without the support of the top management. All senior managers have to be on the same page, understand the goals, risks and benefits. Otherwise, pretty soon your brand new transformation project will be closed.
Remember that different people have different views and expectations, so be prepared to address them all. On the other hand, if the CEO is the one who brought up the transformation idea, it might be hard to convince them to change the approach. As usual: you have to find balance.
3. Defining organisational needs
Leadership sometimes has tendencies to focus on the solutions rather than on problems and needs. New products, services or processes should go through the discovery process.
You should talk to employees who are currently involved in the processes that are going to be digitised. You should talk to your customers to understand their pains. At all stages ask end-users for opinions, gather their feedback. You will find a lot of details, small nuisances that can be addressed at the planning stage and otherwise would be missed. Sometimes you may even discover that the problem you are trying to solve is not a problem at all. It is much cheaper to learn that before you develop the final solution.
4. Wrong technology
Even if the issue has been properly identified you may fail due to the wrong technology choice.
Depending on the requirements, especially related to security, costs and innovation levels, you may choose between the well-established frameworks or go with the newest ones. Take into consideration the possibilities of integrations with the systems that are already used in your organisation and the new, external ones that might bring additional value.
It is a crucial decision since changes of the technology at later stages very often means writing the code from the very beginning.
5. Self-made experts
Typically, an organisation that needs digital transformation doesn’t have all the necessary skills to implement it properly. It can be both on the discovery side and the development side. Do not be afraid to hire external professionals to help your company change and grow.
You are the domain expert, use the knowledge and expertise of transformation experts to execute the successful conversion. Sometimes it is easier to see key issues from a distance when you are not emotionally involved. Assign key stakeholders from your company to team up with external experts to achieve the best results.
6. Company Culture
Though the problem was properly identified and the solution is smooth, people might not want to use it. The old habits die hard. Learning new tools or following even slightly different processes seem difficult and time-consuming.
In order for your digital transformation initiative to succeed, the company has to be ready for changes, from the top to the bottom. It has to be open to calling the status quo into question, to experiment, to becoming agile. Employees have to believe that the changes are for the better, therefore you have to sell the idea to them. Inviting the key employees and company influencers to the process of creating the whole concept helps a lot, as they feel like authors and spread the good word around.
7. Results monitoring
How is the transformation going to benefit your company? What are the business goals and how will you measure them? Try to quantify the goals so you can measure progress against them. This is crucial, otherwise, how would you know if the project failed or succeeded?
The metrics themselves vary between the products but the value of monitoring the results is crucial across all types of systems and markets. Clear visualisation of goals and progress allows you to react and incorporate necessary changes. It is essential to understand the metrics, both by the transformation business initiators and the delivery team.
Conclusion
Despite the difficulties in implementing digital transformation, it is worth trying. The world, as well as customer habits, is constantly changing. In order to keep up with the trends, technologies and user needs, organisations need to change as well. Success comes to those who are agile and able to adjust.
Learn from your mistakes and analyse the defeats to perform better next time. Keep in mind the most common reasons for failure and do your best to avoid them. This way you significantly increase your chances of success.
And know when to ask for help. For example, by reaching out to our Miquido experts, you get professional consulting at all stages of your digital transformation project.
