Business Agility

Why Companies Fail At Digital Transformation

April 5, 2021
Business Agility Office


After years of working on digital transformation, executives are facing a grim reality: Only 5 percent of digital transformations achieve or exceed expectations. CEO is one of the main reasons digital transformation is not progressing, according to a new report.

One of the problems facing companies in the digital transition is to give the impression that the transition is not linear. Companies that have failed have often shown missteps, but they have proven that successful digital transformation is possible, and that failure is not the end - of the - way. Understanding what went wrong at every failing companies can point future digital transformations in the right direction and provide guidelines for things to avoid.

Consider an organization that pursues a "digital transformation agenda," which, by the way, does not include many companies.

It traces everything from complexity to poor organizational structure, but it is the failure of organizations and people to communicate effectively that has put them in trouble with digital transformation from the outset. People are not the problem; it is the organization’s inability to communicate effectively with its people that equips it for digital change, the report said.

Failure of Digital Transformation

The failure of digital transformation does not mean the end for a company, but it can make the difference between losing money, resources, time, and credibility. Even digital executives can make fatal missteps by treating it as a one-off event, rather than a long-term process, according to the report. If they do not set out how the transformation will support existing business units, companies can avoid each other. Businesses can also fail by entering a new business model without a clear vision for the future, such as creating a digital business unit.

While these examples are encouraging, many still find it difficult, if not impossible, to achieve a true digital transformation. It is important to note that even if a company fails in its initial efforts at digital transformation, it will still be able to make adjustments to succeed in the future.

It is undeniable that the digital transformation, which for many is the only way to save a business, is not working. A major reason for the failure of digital transformation is that the world is on the move, and many politicians do not realize the extent to which it is doing so.

For example the company GenPact believes that the error rate is 75%, which means that more than 90% of digital transformation projects in the United States have failed. Forbes is clear: 84% of digital transformation projects fail because of the failure to adopt basic aspects that lead to lower-than-expected benefits such as customer satisfaction, customer loyalty and customer loyalty.

In cases where an organization is fast following and has only just begun the digital transformation process, 70% of digital transformations fail.

Space spoke with Saldanha about why the digital transformation is failing, how companies can address the problem, what organizations need to change and what they need to do to truly benefit from digital transformations. Understanding these challenges and learning from some of the most well-known failed digital transformation efforts – transformation efforts can give teams the insight they need to help companies develop and implement the right strategies for successful digital transformations. As organizations move toward a change in their core area, Raskino offers the following tips for organizations committed to digital transformation. The six main reasons why companies face digital transformation failures and how to overcome them will help teams create a roadmap for digital transformation that brings business value.

Having mature processes is what it matters

Many companies do not understand that they need a solid database before their transformation can actually go ahead. Businesses spend millions hiring consultants to help them implement the digital transformation, but efforts can stall if organizational changes are never fully implemented.

If the opportunities and problems of digital transformation are not adequately defined and articulated, it can be difficult for companies to build an organization for digital transformation.

Modern companies are under enormous pressure to undergo this process because they are left behind in the past. The number of companies that are suffering from the failures of the digital transformation is shocking, but it does not alter the fact that such activities are crucial for the future of companies in almost all sectors. The failure rates of digital transformation have become a major problem in many industries, including healthcare, finance, education, healthcare, retail, and the financial sector.

Understandably, companies taking their first steps are focusing on securing against digital natives, as these companies are emerging in the digital market and have been present only in the digital world rather than the real world. While digital natives certainly have their advantages, established companies that have the influence and resources generated by success in the real world are more likely than companies that strive for digital transformation to be "digital natives."

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