In a recent survey of business leaders, Digital Transformation (DT) risk is among the top concerns they have for their organizations. Why? Because around 70% of all digital transformation initiatives FAIL. It has been estimated that around 1.3 trillion USD was spent on digital transformation initiatives by companies in 2018. Unfortunately, it has also been estimated that about 69% of that money ($900 billion) was spent on failed projects.
So why do most digital transformation initiatives fail and a select few succeed? After all, the fundamental purpose of upgrading your technology is to gain operational efficiencies and drive customer satisfaction, isn’t it?
The reasons vary from company to company and from industry to industry, but in general these initiatives failed because some organizations lack knowledge, the correct mindset, or have flawed operational procedures. Here are the 3 major reasons that Digital Transformation Initiatives fail and how to avoid them.
1) Management doesn’t involve the IT Department
Digital Transformation Initiatives are acts of process change; thus, they mostly originate with management, not IT. In a Deloitte study, it was revealed that only 31% of companies think they need their IT department to support automation when making decisions about digital transformation initiatives and keep them in the dark until very late in the process.
Irrespective of whether you think your IT is qualified to make strategic decisions, you should involve your IT department in your decision making because ultimately, they (or a third-party MSP) will be the ones to have adapt to the new systems, and be crucial in managing the change in the way employees work. Not involving IT, can lead to various bottlenecks when the actual technology upgrade takes place. IT Service Management (ITSM) and IT Operations Management (ITOM) also play key roles in upgrading other department processes.
2) Having an Overly Ambitious Scope
Many companies fall into the trap of thinking that it is best to upgrade all their processes together because they are anxious to realize the expected benefits. These companies often underestimate how complicated their business processes are. They fail to grasp just how much time, effort and resources are necessary to upgrade the processes.
A better approach would be to upgrade one subprocess at a time, validate it, iterate with the other ones, and then move on to the next. This makes it easier to identify mistakes and lessens both the financial and operational risk associated with the upgrade.
3) Not Preparing for Change
Although often underestimated at by C-suite executives, but any digital transformation effort significantly changes the way that employees work. For example, if someone from IT went to one of your employee’s desks and upgraded their system so that 30% of their work was automated, it is very likely that the employee would be upset about not being notified. Employees tend to be fearful of change and it is the job of management to ensure that they are properly trained and understand the long-term effects of this change.
One of the easiest ways to ensure a successful digital transformation initiative is to work with a managed services provider like ProV that can help you navigate the process. Our partnerships with best-in-class enterprise software like ServiceNow, and our track record of multiple successful deployments can give you the edge you need to be on the cusp of technological advancement. To learn more about how we do it, request a FREE Consultation today!
