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4 reasons why digital transformation initiatives fail

February 16, 2023


Andrei Zhukouski

Andrei Zhukouski

Senior Consultant

Link to Prylada Linkedin

According to the new research published by Boston Consulting Group (BCG), the majority of companies that orient their policy towards digital transformation (DT) fail to achieve their objectives.

I’ve analyzed why such negative statistics may take place nowadays and distinguished the 4 most important mistakes.

1 Wrong setting and lack of evaluation

Digital transformation is always a great opportunity to rethink and optimize business processes of a company. However, many companies treat DT as a way to solve a specific issue, for example, to reduce staff, thus simply transferring their existing business processes to a digital environment. 

Indeed, DT may provide new features that help solve the issue. But the main advantages of DT are still left unused. Such phenomenon is better called “transferring to digital environment” than “digital transformation”. As a result, the costs for development and support of a new digitalized process affects the price of the company’s product. What we see in the end is that the company's performance has been higher before DT. 

When planning DT, it is necessary to clearly understand the purpose of this transformation, define the main indicators, and evaluate the performance. In recent years, we have been witnessing a growth of companies that had gone through DT and received a solution that required modernization from the very first days of consumption.

2 Lack of continuous improvement culture

DT provides a variety of tools, which are comprehensive and simple to implement. The right culture helps a company accelerate the process of DT and strengthen the result. The companies that are not only ready for changes, but also are capable for their effective implementation at all levels, can get the maximum value from the DT adoption. Having a culture that would encourage for that is one of the main keys to the DT success. 

3 Lack of expertise, hasty decision-making, and too rapid transformation

A company should have experts in specific technologies, analyze first before making a decision, and not to force the transformation faster than it’s necessary. An error in any of the points may lead to large financial and temporary losses. 

4 Lack of support from leadership and lack of synchronization between all company levels

If the leadership of the company is not involved in the DT strategy or does not support it for 100%, this may easily result in a “cliff in the middle of the road”. Moreover, if the strategy is not approved at all levels, common decision mistakes may start to penetrate into all business processes, which usually complicates DT and leads it to the dead end.

Wrapping up

I’d like to sum up all the listed points above with one simple analogy. DT can be compared with crossing a dense forest with a lot of paths. Whenever you decide to go through this forest, I would recommend taking the following things with you:

  • A map that will lead you to your destination
  • A leader to guide through this journey
  • A compass to assess your position and stick to the plan
  • Willingness to get rid of unnecessary things and adapt to the situation on the go
  • Experts who will help you go through the forest darkness
  • A team that clearly understands the purpose of this journey
  • Regularity, so that not to rush and not make a mistake at a crossroad

And finally, you should be ready for surprises along the way.

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