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5 Signs Your Company’s Digital Transformation Efforts are Failing

How to Tell when a Company's Digital Transformation Efforts are Failing

With 98% of enterprises already involved in digital transformation initiatives, it can be inferred that enterprises are not shying away to embrace digital transformation to stay ahead of their competition.

However, not all out of 98% of enterprises see a ray of success in their digital transformation initiative. Most companies embark upon a digital transformation journey, only to hit the roadblocks.

McKinsey survey on digital transformation failure and success

It was the year 2014, when the CEO of the 115-year old American car company, Ford, announced the grand plans of bringing about digital transformation in their business by putting innovation at its center.

They attempted digital transformation by building a new segment called Ford Smart Mobility.

Rather than bringing and implementing digital transformation in its core business, Ford decided to keep ‘Ford Smart Mobility’ as a separate entity, located miles away from headquarters, with no coherence with its other business units. The goal was to develop new digitally-enabled cars with enhanced mobility.

With Ford investing millions into its new venture, it started to witness quality concerns in the other areas of the company.

The siloed-approach of Ford was too slow in steering forward its digital transformation strategy.

Ford failed to catch one of the important signals–inefficiency to integrate digital transformation efforts with the rest of the company–that led to a digital transformation failure.

Thus, turning a blind eye to such kind of signals may lead to a digital transformation failure that your organization could not afford.

Signals Your Digital Transformation Strategy is Failing

It is encouraging that many organizations are undergoing a digital transformation. But there might be a possibility that your transformation strategy is not approached in the right way.

Digital transformation failure can occur because of a multitude of reasons. However, identifying them early can help you recover from the massive loss that could occur after the failure of digital transformation.

Here are the 5 signs indicating that your company’s digital transformation efforts are failing:

1. Your Digital Transformation is Not Beneficial for Your Customers

Your Digital Transformation is Not Beneficial for Your Customers

Digital transformation can bring many changes to your organization. You can save a lot of amount by eliminating redundant and traditional technologies and processes, increase your profits by making your staff more productive and your business more efficient.

However, along with making your business digitized and efficient, if you are not taking into account the customer experience, you are definitely setting your digital transformation up for failure.

Thus, if improved customer experience is not the end goal of your digital transformation efforts, then revisit your strategy and add it as one of the primary goals because more than 50% of consumers switch brands because of poor customer service.

2. Your IT Team is Not the Focus of Digital Transformation

Your IT Team is Not the Focus of Digital Transformation

Digital transformation is not about updating a limited number of processes across siloed departments, it’s rather about harnessing the digital mindset across the entire enterprise. And IT department, an often overlooked team, should be an integral part of this digital transformation journey.

Responding to one-off requests day in and day out is neither efficient nor effective. If your IT teams’ main job is still responding to one-off requests from various other departments of your organization, then your digital transformation journey is heading towards a roadblock.

Remember, at this point in your digital transformation journey, where you are figuring out whether you are failing or not, you should start appreciating and empowering your IT team as technological strategists because they are the ones who will lead you through successful digital transformation efforts.

3. Limited Buy-In from Senior Management

Limited Buy-In from Senior Management

The digital transformation initiatives always follow a top-down approach. Thus, it is vital to have strong leadership with a compelling vision.

Since the digital transformation strategy comes from the upper echelons of your organization, you need to make sure that they are not just driving that strategy, rather they’re fully bought into it.

Lack of senior leadership buy-in is one of the biggest bottlenecks that can hamper your digital transformation.

At times, certain CXOs might be resistant to change due to various reasons like lack of digital awareness, or affection towards legacy systems, but this attitude leads towards the deadly digital transformation failure. Hence, it must be tackled down well in advance for their buy-in and acceptance.

What You Can Learn from BBC Digital Transformation Failure

In 2008, the BBC launched its Digital Media Initiative (DMI) to move ahead in an increasingly digital world. The project aimed at changing how the BBC both manages data and provides content to audiences, at the same time as reducing costs.

The data management system of the BBC was a central part of the digital transformation. BBC joined hands with Siemens by selecting them as their technology partner on the DMI project. However, rising costs and numerous delays resulted in the loss of contract in 2009 and the BBC brought DMI in-house.

But problems continued to rise as the organization didn’t have the required technical capability to deliver the complex program.

Ultimately, in 2013, BBC announced that DMI was to be shut down, writing off £98.4 million in unusable technology assets. CTO John Linwood lost his job the following year.

Further, PwC recently conducted a research on how the project started by BBC failed and they revealed the following reasons that resulted in their digital transformation failure:

  • Lack of oversight
  • Serious weaknesses in project management
  • Lack of focus on business change
  • No executive steering board keeping DMI on track

4. No Well-Defined Digital Strategy

No Well-Defined Digital Strategy

In one of our previous blogs, we mentioned that:

“Do not follow the digital rat race to quickly transform your digital strategy…”

First of all, organizations should focus on defining what they want to achieve from their digital transformation journey. If your strategy to transform is unclear, you are likely to fail in your digital transformation efforts.

Digital transformation does not mean a complete overhaul of your business processes and technologies. Digital transformation strategy depends upon your organization’s goals, thus, it is important for your organization to define a clear strategy with distinct goals and outcomes.

5. Your Organization is Unable to Plug the Skills Gap

Your Organization is Unable to Plug the Skills Gap

77% of companies consider missing digital skills as the key hurdle to their digital transformation. There is a clear shortage of digital workforce and without them, you can never succeed in your digital transformation efforts. Thus, it becomes important to invest in digital skills and reap significant benefits from it.

If your organization is also dealing with the shortage of digital workforce, then you are heading towards a digital transformation failure. Note that if your answer to the following questions is ‘NO’, then you have to seriously look into your digital transformation journey:

  • Does your organization include digital skills as a key component in your workforce plans?
  • Is your HR department equipped and skilled to bring innovative solutions to bridge the digital skills gap?

According to Capgemini’s “The Digital Talent Gap – Developing Skills for Today’s Digital Organizations Report” below are some of the best practices and examples of how brands are conducting training programs to address skill gaps:

Best Practices and Examples

Source: https://www.capgemini.com/wp-content/uploads/2017/07/the_digital_talent_gap27-09_0.pdf

Conclusion

Embarking upon a digital transformation journey and reaching the end-point is far from simple, however, if the right methodology is followed and an expert digital experience agency is hired, your organization can achieve this task seamlessly.

Mistakes are inevitable to happen, if caught in the early stages of your transformational journey, you can fix them fast to get your digital transformation efforts back on track.

Contact Net Solutions

Akash Lomas

About the Author

Akash is a Technical Architect with an extensive experience in MS stack. He is passionate about architecting solutions, coding and enhancing process delivery. He envisages a foolproof solution and holds no bar in achieving his goals. Besides, he is a loving father and is very fond of spending time with his son. He believes in keeping the child alive within himself.

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