Top 10 Reasons You Experience Digital Transformation Failure
In a world of augmented technology and heavy investment in resources for digital transformation, it is alarming that only a handful of digital transformation initiatives are achieving their goals. While only a sparse number of organizational transformations succeed at improving a company’s performance and maintaining growth, the success rate of digital transformations is much less than that. However, there is a need to stay competitive, despite a lot of companies suffering a failure in their digital transformation. This begs the question: Why do these programs fail?
1. Unclear Digital Transformation Goals
While companies invest heavily in technologies like sales enablement, AI, and data pipeline, they keep failing because of a lack of clear-cut goals. Before embarking on digital transformation, it is key to pin down the main business goal, a tactical initiative that will help your business to attain a new level of returns, and the necessary data to support it.
It is imperative for an executive team to have a clear idea of what the business seeks to achieve, why it’s analyzing the data, and the drive for implementation. This is the key to the success of digital transformation initiatives.
If the initiatives are not thoroughly thought out or planned, no transformation magic can be implemented by even the best internal or external team. As long as team players do not have the right culture and approach to work, the company risks falling behind. However, when the select committee is well driven, employees at all levels in the company will have a clear focus as well.
Now, before you begin digital initiatives within your company, can you tell if your team members are aware of these goals? Do they share the same values as your company? Are the processes to execute these goals clear to them? Are the goals realistic? Do they align with the goals of the company?
Digital Transformations Can Influence Many Business Aspects
In order to cut out errors during digital transformation, it is necessary to consider the true goals of the transformation and what those initiatives seek to transform.
One way for employees of a company to understand the goals and stages of digital transformation is to draw out a roadmap. A roadmap is useful for managing the expectations of the project. It’s also helpful for communicating plans, as well as coordinating resources with other teams, if needed. It is crucial to create a roadmap to digitally transform your organization.
2. Not Knowing How to Build Sound, Strategic Digital Transformation Initiatives, Business Processes, and Integrated Systems
A digital transformation strategy kicks off with providing answers to important business questions. This includes what, who, how, and why. It creates the link between desired long-term goals and the present state. Some strategies require a high level of buy-in from the managers within the group if implementation is to be successful.
As digital transformations demand teamwork and integration, transformation strategy shows how to link these factors for the success of the goal. It focuses on drawing a detailed plan to address critical issues.
All enterprises have their unique ways of implementing innovations, but the challenge is always the same: digital transformation. Unfortunately, most companies start their digital journeys without a clear strategy.
If there is no clear transformation strategy, there is a limit to what a company can achieve in its transformation plan. Sound strategies show how to move from point A to point B more effectively and efficiently. A great deal of the journey is the strategy, which is followed closely by the execution.
To avoid digital transformation failure, companies need to have a comprehensive vision, to gather data from multiple sources to see what works, and to create a detailed business strategy. A digital transformation process is an intricate one. It demands a consequential investment, and risks are involved. However, it is important to note that no one organization is alike. Hence, it is best to move at a pace that works best for your team. This helps to predict likely risks, and it ensures all initiatives are of value to your transformation goal.
3. Gaps Are Unidentified before Working to Digitally Transform Company and Create Impact
Digital transformation programs are not a walk in the park, and failure to do an in-depth analysis can automatically lead to digital transformation failure. Strategic levels of planning are necessary to compare the condition or level of your business with that of the industry standards.
You also need operation-level planning in order to compare the performance of programs with what was desired. Setting realistic goals to start with and designing a framework that aligns with those goals help you monitor progress and aid transformation efforts. It not only gives your business a clear vision, but it also minimizes loopholes and neglected errors.
This means the chance of your digital transformation efforts failing reduces as well. Identifying gaps plays a key role in understanding the clear goals of your digital transformation program, strategies employed, what they lack, what value they bring, where they need to be, and how to implement them. If these gaps remain unidentified, there will be no solid impact, and every effort pumped into your digital transformation initiative will be futile.
4. Obsolete Methods in Technology Selection
Companies today experience failure of their transformation efforts either because it is nearly impossible to bridge the digital gap if you are stuck on the rigid business culture of old, or they carry through with technology that is irrelevant to them. The systems and procedures for choosing effective software are not strategic. Hence, it is an endless cycle of using outdated tools to solve entirely new problems.
If you are looking to employ initiatives that’ll help you stay competitive in the industry, you must be cognizant of the best tools. Let’s face it. The move to digital is highly important. Any organization that is looking to make a positive impact in their industry must embrace new tools, systems, and business plans of action in order to flourish in the ever-changing world of technology. Often, digital transformations fail because technologies introduced to companies are of little to no value to them.
Systems are significantly changing, and businesses need to respond accordingly. If no regular upgrade is done to the tools that are beneficial for such initiatives, invested resources and efforts will go to waste.
For success, analyze how well your software platform, apps, and other tools not only cater to your present needs but future needs as well.
There are also transformation failures because businesses looking to embrace the latest tools in order to stay competitive forget that not all that glitters is gold.
Before Copping the Latest Technology, Ask These Questions
Of what value will this technology be to the company’s growth?
How will it be of benefit to your digital transformation program?
Does it offer better customer experiences?
Does it fill a gap in your organization?
If your answer to all is yes, then that technology is crucial to you. Check out sales enablement tools to leverage in your company.
5. Lack of Interconnectivity between Stakeholders and Team Members in Your Digital Transformation Strategy
Transformation efforts will fail as long as there is a disconnect between every part that makes up an organization. To run a successful digital transformation program, there must be a synchronization among all teams. The organization must be a cohesive network of knowledge and skills that bring the right solution. Not only should teams and leaders coordinate and set up the desired outcomes for their parts, but they must also understand the outcomes for the business as a whole.
Usually this involves many moving parts. More often than not, businesses that experience failure with these efforts do so because they overlook one or more of these parts.
For a sound transformation of a business, everyone should be kept in the loop. Analyze the crucial components for your digital transformation, areas for new functionality, and the integration necessary to bring it all together. Link workforce, technological resources, and other items of capital together. This implies also that decisions and plans should be made in alignment and with a great deal of transparency among all team players.
Reinforce Corporate Culture in the Workplace
Encourage and reward efforts to share skills and knowledge.
Create peer mentorship programs.
Set up communities of practice.
Streamline communication channels.
Organize joint brainstorming sessions and meetings.
Analyze your current organization for weak spots or missing links.
6. Poor Onboarding Processes
Companies have had to find new ways to get more hands on deck to keep the operation going. Digital transformations require you properly orientate new employees. The way you help new members adjust to your company has a significant impact on your whole business. When it is done incorrectly, it generates high turnover. This increases costs and lost revenue.
For successful digital transformations, team members must be introduced properly to their roles, a comprehensive overview of the program goals, and how they can be implemented. This initial training should go above and beyond to specifically show how all players can contribute to the goals within their roles. It sets them up for success, and it builds trust. In this situation, their productivity level is more likely to be charged!
If the induction system for new employees is poor, people can be left in the dark. They have no clear sense of direction and a poor understanding of what is expected of them.
7. No Everboarding Programs
Learning is a continuous process, and spaced repetition is a proven method to generate expertise and to promote knowledge retention. Often, digital transformation fails simply because one-time exposure to information is hardly ever enough.
People need frequent exposure to content to remember and to retain key concepts and facts. While making plans for your digital transformations, plans should also be made for all employees. Training should occur at different stages of employment in companies:
New hire welcome
Analysis of company pain points
Training to deliver results
Annual compliance training
Preparation for a promotion
Job-related learning should happen frequently, whether collaboratively, virtually, or independently. Your approach for employee training should be as unique as your company, its culture, and the learner population. Realistically speaking, there’s only so much people can absorb at one time, and frequent refreshers help with this. It provides a structure for team players to review and to reinforce their learning.
Learning Approach Options
Hybrid learning, making use of virtual or in-person instructor-led training with a focus on retention.
Digital learning, blending online courses with Q&A, learning games, or other methods to audit and to strengthen learning.
In-office learning campaigns that embrace teaching with evaluation and self-assessment, with the use of a wide range of interactive activities.
8. No Cross-Functional Collaboration
Every organization claims to adopt teamwork as a core value. What does this really mean, though? Before an organization implements digital transformation plans, a goal must be identified.
What happens to the goal, however, when there is no solid collaboration among teams? In many companies, departments operate in isolation, rarely working with other departments. There is no way an organization can thrive without collaboration through several steps: mapping out a goal, finding customers, retaining customers, and gathering data. Embarking on a transformation project requires all teams to collaborate. As stated, even supporting your customers involves all teams working together.
Collaboration breaks departmental silos, enabling creativity, better understanding, and more shared ideas. It creates the avenue for training, mentoring, learning, and growth across positions and ranks. To top it all off, operational collaboration enables leaders to benefit from the diversity of their employees, to build a solid team culture, and to improve overall productivity.
If there is a low level of transparency and no mutual understanding, there will be no progress. For the success of digital initiatives, including the adoption of digital technology, there should be a cooperative mindset across all departments. Shared decision-making and working for the success of a shared goal refine communication skills throughout the organization.
Create a Collaboration Culture in Your Company
Encourage centralized communications.
Demystify the decision-making process.
Encourage open feedback from all employees.
9. Lack of Expertise
In the business world, people are the greatest asset, but it’s important to remember skills and expertise are what make the real difference. Setting goals for digital transformation is one thing; having the skills to execute that plan is a whole different ball game. Lack of expertise in digital transformation leads to errors in set goals, wrong strategic initiatives, wrong execution, and poor risk management.
Digital transformation failures happen because businesses make these mistakes. Initiatives fail when there are no people with the competence to carry them out. Skills deficit is a key factor in unsuccessful transformation efforts because businesses do not have the capacity to develop specialists for advancing digital technologies.
Certainly, one doesn’t have to be a pro in new technologies or the best digital capabilities to employ for successful transformations. However, companies that lack expertise internally might consider seeking help externally. External help can provide the perspective needed to arrange initiatives according to the ones that have the likelihood to deliver results.
10. Poor Return on Investment for Digital Transformation Initiatives
It is certain that digital transformation is at the crux of organizational success, but what will the investment cost you? There is hardly ever any successful transformation that doesn’t come without weighty expenses. Companies find themselves acquiring the latest hardware and software, while still pumping money into employees with the skills to leverage the existing and latest technologies.
Quite a number of business investments are gauged through the lens of payback period, internal rate of return, or break-even analysis. Accountants predict the revenue from the investment and divide that by the cost of the investment. When all this is considered, digital transformation programs might be a bad idea and a bad investment. This is particularly true when weighed against other opportunities a business might explore.
Take, for instance, a large-sum investment in digitizing an old management technology. This might have a remarkably lower short-term ROI than investing the exact same amount in new products that address customers’ needs or even a sales campaign to bring in instant sales and more growth opportunities. However, the culture of clinging to old tools cannot be of benefit to the business activities of the future.
It Might Not Be Easy, but Digital Transformation Failure Is Avoidable
Recent technologies go beyond the expectations of consumers and keep organizations on their toes. It’s a whole lot of work, and the pace can be overwhelming. However, the storm can be weathered.
Digitization of processes is not a new concept, but digital transformation is more critical now than ever. Avoid pumping resources and time into what is not beneficial for your company. Instead, think about transformation initiatives from a strategic point of view.
Once your company has organized transformation plans, the benefits of digital transformation can be realized, making your company relevant and competitive even in a shifting landscape.
Have Questions about Successful Transformations?
Have questions about how to execute successful transformations and how to avoid digital transformation failure? We have these resources to guide you through developing sound transformation programs: