Although organisations have been embarking on digital transformation programmes, in the majority of instances, the outcomes have been underwhelming and have not had the anticipated impact. Why is that the case? We discuss five key reasons for these failures.
In this era of rapid technological advancements, and over the past three years in particular, public and private sector organisations have been embarking on digital transformation programmes. These efforts tend to be driven by the desire to, among other things, leverage digital technologies to enhance their operations, improve customer experiences, and stay ahead of the competition. However, despite the immense potential, digital transformation initiatives often stumble and fail to deliver the expected outcomes. In this article, we will explore some key reasons behind the failures of digital transformation in organisations.
1. Lack of a clear strategy
With digital transformation being such a buzzword these days, it is easy to feel the fear of missing out and decide to embark upon a digital transformation without establishing the proper foundation upon which to do so. Often organisations are not entirely clear about what they want to achieve and accordingly, their strategy may not be as comprehensive as it needs to be.
Digital transformation is not just about adopting the latest technology. Often, it requires a complete re-examination and revamp of the processes and a realignment of the culture within an organisation. However, this transformation of an organisation ought to be driven by a clear and cogent vision, objectives and goals of a digital transformation programme, along with a detailed strategy to guide successful and timely realisation.
2. Competing priorities
Following from the previous point, and as much as management may wish to digitally transform an organisation, in practice, it may not necessarily be giving the initiative the priority it deserves. Although it goes without saying that the organisation still needs to function, it is ill-advised to approach a digital transformation programme on an ad hoc basis, which will only get attention occasionally. Digital transformation is a huge undertaking: requiring a lot of resources (relatively speaking) and touching all areas and aspects of the organisation. It thus ought to be a top priority for an organisation, as the value, imperatives and benefits to the organisation have been identified and justify its importance.
It is also emphasised that the ad hoc or tepid approach to digital transformation implementation can be a sign of competing priorities, and an early signal that the transformational results envisaged may not be realised. Although a digital transformation programme may be considered a marathon and not a sprint, there is benefit in maintaining some momentum, cognisant that workplace and technology are highly dynamic environments, where obsolescence occurs within shorter and shorter time frames.
3. Needed skillsets are absent
In conversations about digital transformation, often the focus is on technology. However, the skills and skillsets needed to successfully execute and complete a digital transformation programme go beyond technical/IT skills. For example, skills that support change management, and business and process re-engineering, are also essential but tend to be overlooked.
Further, many of these skills are needed early when preparing and planning the digital transformation programme, as they should not only help shape the programme, but also facilitate and foster its execution. It is thus crucial that a strategy is in place to ensure that the organisation can access the expertise it needs, such as through employees or third-party consultants and contractors.
It is also crucial that employee skillsets be examined. Existing posts and job descriptions may need to be revised and new roles created, which may necessitate new hires and the separation of some staff members. An upskilling and reskilling programme may be also needed so that team members are properly equipped to operate in the digitally transformed workplace.
4. Infrastructure/technical challenges
To a considerable degree, how technology is leveraged to support digital transformation is a critical consideration. However, many organisations have wide technology gaps that are difficult to bridge or circumvent thus challenging their digital transformation efforts. For example, the current systems and structures an organisation has in place may need to be abandoned completely. But the move to a more digitally-enhanced framework may be very expensive, the staff would require extensive retraining and capacity building, and processes and procedures would need to be reconceptualised. In summary, the organisation may feel overwhelmed by the resources and effort needed, which could result in a watering down of the approach which in turn would limit the impact and effectiveness of the digital transformation effort.
It is also important to emphasise that the cost of technology although relatively cheaper than what it has been in the past, depending on the size of the organisation and the scale of the needs, implementing new solutions, and/or upgrading of existing hardware and software can be expensive. However, free or budget-friendly options may not be as effective or result in the gains envisaged. Hence the technology needs of the organisation ought to be carefully considered and a strategy developed to help it better manage the resource gaps that it may have and determine how best to achieve its desired objectives.
5. Inadequate focus on the people
Finally, although it is a point that is often made, the ‘people aspect’ of digital transformation – which not only includes customers but also employees – tends to get lost. Frequently, organisations do not understand their customers’ needs and pain points, how those needs are changing and consequently, how best to address them and provide the best service that creates value. Similarly, management may not necessarily appreciate the (internal) people dynamics of the organisation, the culture the organisation has been fostering, and consequently, how best to provide the best enabling environment for the team.
Unfortunately, these are issues for which many assumptions are made. However, the true success of any digital transformation effort is reflected in how customers respond to the organisation and in the culture and morale the organisation fosters in its teams.
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