The COVID-19 problem has resulted in years of change in how businesses in all sectors and regions works. It has revolutionised the digital world. All products and services have to be digitally available within a short period of time. Despite the expected $3.3 trillion in investment by 2025, Forbes estimates that up to 84 percent of digital transformation attempts would fail. There are particular reasons why they fail, especially considering that digital transformation is a critical component of any company’s long-term success:
Data is, without a doubt, the most critical element of any digital transformation. You won’t go very far without reliable data sources. Hundreds of businesses sell the latest and best software, saying that it will evaluate your procedures and help you save money. The issue is that instead of offering a complete end-to-end solution, they focus on data analysis. It’s practically pointless if you don’t have any sensors or systems that integrate with the software. To be of any use, it must be flooded with a significant volume of high-quality data. This is the foundation of digital transformation and one of the most critical aspects to address if you want to see measurable results.
Too Broad of an Approach
Approaching your digital transformation too broadly might lead to complications and, eventually, a failed transformation. Comprehensive in the sense that you are attempting to tackle all of your operational issues at the same time. Although it may appear to be a brilliant concept at first, it quickly becomes incredibly expensive, and given the magnitude of the project, positive results often extremely slow to manifest, making it difficult to defend the purpose for the change as a whole. Starting small reduces risk, establishes its worth, and allows you to incrementally expand on the change from there.
Concerns about mass layoffs
Introducing new technologies to take over specific duties and procedures might make your staff feel threatened. They are concerned that technology may supplant them and leave them jobless. When this happens, your staff may be hesitant to accept new technologies or to participate in any pilot projects. This puts a significant stumbling block in the project’s path, causing it to fail before it ever gets started. Instead of spending time on a mundane tasks, your workforce can be used to optimise the value of both technology and human expertise through digital transformation.
Failure to Identify Root Cause of Problem
When attempting to fix an issue, businesses frequently pinpoint the incorrect fundamental cause. For example, a manufacturing organisation may implement a productivity management tool to decrease worker downtime while, in reality, the downtime is caused by unanticipated equipment failure, which can be remedied using predictive maintenance software. The issue here is that firms invest in something they believe would address their problems, yet wind up wasting money on the incorrect answer.
There are no clear objectives.
Digital transformation is generally implemented to accomplish one (or more) of four major goals: increase revenues, cut expenses, reduce liability, or improve asset value. Which is why another cause of failure is when a business embarks on its transition without any defined goals in mind. Buying new software or hardware without a strategy is a recipe for catastrophe. There has to be a challenge that you want to tackle with quantifiable outcomes so that you can track your progress and alter your plan as needed. Adding a quantifiable value within an acceptable timeframe to those goals is a good place to start when planning your initial project, and will assure far more success than going in blind.
Inadequate Technical Knowledge
Technology can be complex and puzzling and difficult to grasp, which leads to the failure of certain digital transitions. Lack of comprehension can result from adopting technologies based on industry trends without a clear grasp of why you are deploying them, or it can result from a few employees who understand and are pushing for the new technology, but the rest of the company is unsure. The danger here stems from squandering the technology’s full potential and failing to maximise its worth. In the end, it is an expensive error that will lead nowhere. Some software applications available today need a higher level of coding from users, which is a tough skill to learn, resulting in misunderstanding and misuse of the software; unless, of course, you have a team of coding experts who are the primary users.
While the six elements described above are by no means comprehensive, they are some of the most prevalent reasons why digital transformation initiatives fail. Researching and comprehending a couple of the failure points already gives you an advantage over others. The next natural step is to contact a digital transformation consultant to learn more and get started on your journey.