Why Digital Transformations Fail
by Jason Bullard, on Jan 4, 2022 7:06:27 PM
The most common reasons why digitization projects fail—and how to avoid those missteps.
To take full advantage of the suite of emerging and established tools and technologies collectively referred to as Industry 4.0, many companies are embarking on a process of digital transformation. This process involves not just upgrading technical infrastructure, but modifying everyday operational processes and procedures to take full advantage of this game-changing new tech.
The rewards for a successful transformation are profound. A successful digital transformation can result in a level of connectivity and data-driven insights and information that yields potentially dramatic new efficiencies. Companies can use these new tools to streamline processes, reduce costs, increase quality, and enhance profitability. However, a digital transformation does require necessary resources to avoid disrupting operations or wasting time.
What follows is a brief overview of some of the most common reasons why digital transformations fail. Understanding these points of vulnerability (and how to avoid them) is an important prerequisite for any decision-makers considering a digital transformation.
Lack of management support
One of the most common reasons digital transformations fail is fairly straightforward: a lack of upper-level support from management. These are inherently big changes and cannot be made in a haphazard or half-hearted manner. Strong leadership and a top-down mandate is critical for getting everyone onboard and pointed in the same direction.
Lack of a champion
The lack of a champion is perhaps the single biggest reason why digital transformations fail. You need someone to oversee the project, and that individual needs to have not only the time and resources required to do the job, but also has to have deep insight into your existing processes and priorities. Assigning an intern who doesn’t know your processes intimately simply won’t work, since it is precisely those processes that you are transforming or digitizing.
Digital transformations extend across departments. They require institutional and structural changes that impact virtually everyone. Consequently, it’s not uncommon to end up with IT and engineers arguing in a counterproductive manner over who should own the process. Each of the department’s roles need to be clearly defined by management. This is where a strong and connected/collaborative professional culture can pay real dividends. Strong leadership, coordination and communication can go a long way toward preventing damaging disruption and squabbling between different parts of the company.
Lack of resources
A successful digital transformation requires both literal and figurative buy-in, from personnel to the hardware. The ROI on the investment in new infrastructure and resources needs to be taken into account. Make sure you have the budget to support your transformation. Don’t assign someone already working 50 hours a week to manage the transformation. Give your team the opportunity to do the work required to manage the process.
Trying to do too much too soon
The old saying that if you try to eat an elephant in one bite, you will choke, applies to digital transformation. A successful transformation is a process. Use a scaling model where you start small and move forward in coordinated steps letting the data created drive the growth. Don’t start with mission-critical elements where you can shut down production while you learn what you don’t know yet.
Lack of features/flexibility
Trying to execute a digital transformation using a tech solution that lacks the necessary features and flexibility to address not only your current needs, but your future needs is destined to fail. Make sure that your digital transformation architecture is sufficiently flexible and powerful enough to do what you need it to do—and be careful to avoid clinging to any in-house tech that also lacks those features or flexibility.
The insights and efficiencies that digital transformations can deliver require a certain level of procedural consistency. Consequently, a lack of existing processes—or the failure to develop those processes early in the digitization process—is another reason why some transformations fail. If the definition of insanity is doing the same thing over and over and expecting a different result, the opposite is also a non-starter: doing the same thing different ways every time and expecting the same result.
Lack of communication/collaboration/support
As important as it is to have a trusted partner to guide you through the digitization process, the wrong partner can be a liability instead of an asset. The most common issue is a partner who doesn’t listen and doesn’t take the time to get to know your people, your processes, and your priorities. The best operators in this space will take the time to not only meet with you ahead of time before developing a digital transformation plan, but will continually educate, train, and follow-up throughout the process to ensure that any concerns or issues are addressed and that things are moving forward successfully.
Above all else, a trusted and experienced partner will recognize the perils and pitfalls outlined above—and will help you chart a course to avoid them and complete the kind of digital transformation that lives up to its name by delivering genuinely transformative results.