Everybody talks about the vital necessity to digitize the business. It’s true, high technologies are the driving force for progress, future and success. However, according to the research data, today only 10% of enterprises are really ready for the digital transformation. So, why are the statistics so poor? Let’s elaborate on the key reasons why enterprise digital transformation fails.
What is digital transformation?
First and foremost, let’s define what a digital transformation means. In plain English, it’s a process of integrating new solutions into your business. It’s an implementation of the evolving technologies like artificial intelligence, 5G, machine learning, chatbots, etc. and/or designing apps for healthcare, e-learning, and others in order to solve some problems and enhance the customer experience.
Why enterprise digital transformation fails: key reasons
Being inspired by the thousands of articles about the advantages of digital transformation, CIOs try to implement AI, chatbots, machine learning and other technologies. Anyway, not everyone has managed the goals and there are at least 7 key reasons for it. Let’s observe them step-by-step.
No strategic vision
One of the most widespread failures is the absence of the digital transformation strategy. Today the integration of the digital models is chaotic and unplanned. That can result in the loss of the market instead of expected evolution, growth and enhancement of the enterprise.
The integration of the new technologies requires patience, time and well-thought-out strategy. You should analyze your business digital level, what you want to achieve and what challenges are waiting for you on the way.
Focus on designing as well as testing the business and customer value opportunities, mind the enterprise architecture and context, plan the transformation activities, basing on the analytical research made. That’s the only way to the success of the digital transformation.
Lots of enterprises slowed down or even stopped the process of digital transformation halfway due to financial issues. That’s because of the chaotic integration of the new technologies and, as a result, facing unexpected and unwanted challenges.
Comprehensive digital transformation is an expensive thing and you must mind that at the very beginning. The process can require additional human resources, investments, etc. To avoid the problem you must:
- analyze the business and its digital level to get valuable insights into the potential payoffs from an investment;
- understand the work scope of the digital transformation and time needed for the implementation;
- prioritize the tasks to plan the activities strategically;
- plan the budget due to the matrices received.
Lack of involvement at both executive and board levels
It’s not a secret that there is often a big gap between how the executive level thinks things are done and how the board level actually does things. It applies to large and medium enterprises. In case there is a lack of involvement at both levels, the chance of your failure on the digital transformation is pretty high.
Yes, without communication between the levels, the transformation initiatives can drown in constant validation and approval processes. Herewith, you’d invest efforts and time to involve the entire organization in the transformation.
Not having a digital transformation roadmap
One of the biggest failures is skipping a planning stage and starting the digital transformation. Such an approach results in the loss of control over the process on all levels. It’s impossible to do the work right without clear and properly defined criteria, milestones, and when even motivation is vague.
That’s why it’s vital to have a digital transformation roadmap. Set milestones and understand small tasks required to be done to reach the goal. Keep the stakeholders and employees of the enterprise motivated by highlighting the intermediate results and quick wins. Also, invest in the education of your workers about the changes that are coming with the digital transformation.
Lack of project management
The absence of the dedicated digital transformation team and/or a good execution plan also can be a reason for the failure on the journey. Planning and creating a roadmap is only a part of the job on the way to the desired objectives.
There are to be proper milestones, checkpoints, and communication plans along with deliverables clearly defined. You also need to track and manage every stage of the process to make sure that the deliverables are produced on time, certain goals are achieved in a definite period, and so forth.
In case you don’t have enough knowledge to manage the transformation process then it’s better to hire a technology vendor to do that. Thus, you’ll get an unbiased analysis of your organization and develop the conceptual vision of how to reach the goal more effectively.
Using the old waterfall planning process
Even if you have a plan of digital transformation, it doesn’t mean you won’t fail. When it comes to the large enterprise and a scoop of digital tools to be integrated, the transformation can take years actually. When it’s a multiyear journey of the digital transformation, the main mistake is an implication of old waterfall planning. New technologies require a new approach of an iterative sprint.
You should better divide the entire initiative into short-term so-called sprints. In such a way you can receive measurable results in coincidence with the vision and strategic intent. The approach will help you to move to the main goal, keep the stakeholders motivated and solve the problems that arise without a need to move faster and putting people at the risk.
Complete throw out the older technologies
In case you try to swap out the older technologies used for years for a completely new methodology, it can be a reason for your enterprise digital transformation efforts failed as well. Think over that the new technologies more likely won’t support the hardware, software, resources, infrastructures that already exist and are successfully utilized. And that can be a real problem.
Rather consolidate technologies and take a hybrid approach. Adopt incremental experimental technologies, using newer solutions and older ones together. It will give you time to educate and learn the stakeholders to work with the new technologies integrated.
Digital transformation is an overhaul process that involves workflows, operations, services, products, client interactions, and others. To digitize the business, it’s important to understand that it’s a gradual process that requires patience, strategic vision, budget planning, clear roadmap, the involvement of all the levels of the business (board and executive) and a dedicated transformation team involved. Don’t just follow the trends, but think over and plan every issue before starting a digital transformation of the enterprise not to fail, but achieve the stated objectives.