Boardrooms are abuzz with conversations about digital transformation. Despite widespread hardships caused to businesses across the globe by the COVID 19 pandemic, it is estimated that the spending on digital technologies globally will rise to around USD 1.3 Trillion in 2020 registering a 10.4 % growth from last year. Given the unique position of 2020 as a year when every business around the globe put restrictions on their costs, this figure is extremely revealing.
But, having said that, not all digital transformation initiatives translate into encouraging signs of business growth. There are several instances where enterprise technology transformation initiatives have gotten stalled or been abandoned.
Speaking from personal experience and drawing from the many conversations I have with business leaders here’s my list of 5 reasons why most enterprise digital transformation fails.
Let us examine them in detail
No purpose and/or direction
The saying teamwork makes the dream work is true even for digital transformation.
Unless everyone in the team is factored into the strategy, an organization will find it difficult to achieve the goals and milestones it set for digital transformation. Such alignment with the common enterprise goal is, sadly, rarely achieved. This is not because of a lack of technology tools. It’s because of a lack of communication and purpose.
Operating in siloes, different departments within the organization may be following different governance and compliance policies and have different functional goals that aren’t mapped to a common objective. This leads to gaps, redundancies, and hurdles to implementation. It becomes hard for departments to get data from other departments or to create automated workflows that span departments and functions.
For the unified digital transformation of the entire business, it is important for every individual department or business function to communicate, coordinate, and collaborate.
Lack of roadmap
Enterprise technology initiatives, no matter how big or small must always be measured for progress against a strict plan and schedule. That means defining milestones and checkpoints. Before implementing a major technology-driven overhaul or introducing disruptive new technology into your business processes, it’s essential for there to be a clear pathway showing whether the tech product is gelling with existing systems and touchpoints to validate if there is seamless interoperability. Without such a clear plan, dependencies will be ignored and showstoppers missed (until it’s too late). This will prevent the seamless interoperability of new digital systems with existing ones.
A digital roadmap and plan are crucial to ensuring that all dependencies are mapped, the right integration points captured, and a systematic and detailed implementation phase is designed to ensure that the business can on-board a new enterprise technology without running aground halfway.
Too much too soon
The corporate leadership is often easily convinced about the benefits of technology in their business. But there is also a need to acknowledge that not all shiny new enterprise technology solutions advertised for your business are right for you. In the race to be seen as being digital-friendly, many leaders make the mistake of trying to onboard too many digital platforms into their business too soon.
The technology (and its implementation) becomes the focus rather than the problems a digital transformation will address. It’s crucial to define the “why” first. Aligning business processes and workstreams according to those set objectives comes next and finally investing in digital solutions that can accomplish all that seamlessly.
Downplaying cybersecurity
Ever since the COVID 19 pandemic hit, there has been a steady increase in the number of cybercrimes linked to the large-scale migration of the workforce across industries from their office to homes. Nearly 91 % of businesses have reported an increase in attacks from cyberspace on their employees who are now predominantly working from home. This is a glimpse of what happens when digital transformation initiatives create digital systems and platforms but allow vulnerabilities to creep in.
When planning a digital initiative or when onboarding a new enterprise technology, it is critical to consider security first. I suggest performing an assessment on the present level of preparedness for cyber threats within your organization to start with and then building outwards to scale your security as digitization evolves. Failing to fortify your digital landscape WILL result in disastrous consequences.
No structure for innovation
It’s a widely accepted myth that innovations, like miracles, happen by themselves, unbidden and suddenly. Nothing would be further from the truth. Innovation is not something companies can buy from the market. It takes enormous time and effort and a powerful enabling structure to bring out innovation. Many organizations, without having put this structure in place, substitute experimentation for innovation. These projects suck up resources, take time, and cost money. They, almost always, don’t go anywhere too. Even worse, many leaders feel compelled to keep flogging this dead horse in the hope that it will eventually run. Economists call this the “sunk cost fallacy”. The truth is, far-reaching enterprise transformations are fed by innovative methods and means. But trying to transform without creating the structure for supporting innovative thinking is futile.
Digital transformation is here to stay, and I have no doubts about its potential to deliver sustainable (and exponential) growth to organizations. But the key for enterprises to ensure that their digital transformation is designed right, implemented well, and does not stall during usage. For this, they can do worse than starting by eliminating the 5 initiative-killers I’ve highlighted here. Of course, I welcome you to add your stumbling blocks to the list while commenting on this list too!
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