5 reasons why digital transformation projects fail

July 15, 2021 | David Daly 5 Mins read

Digital transformation projects are of vital importance to any organization with growth and scaling ambitions. Strong digital transformation needs to take place to ensure that a number of business-critical services within the organization are able to operate cohesively as well as collaborate with each other when it comes to essential data flows.

These projects are very valuable and contribute long term gains and can really influence strategy at executive level, business goals, company culture and bottom-line revenue streams. But, as with any project, they require significant planning, ongoing commitment and a broad range a varied stakeholder involvement.

Digital transformation officers are becoming more and more common at global organizations as these companies look to assess where they currently stand in terms of their digital capabilities and where significant improvements need to be made.  Nobody wants to be in a scenario where they have to re-do or revisit something, so it is vital that leaders provide the necessary support that gives any digital transformation project the best chance possible to succeed.

In this article, we will examine some of the major pitfalls any digital transformation project team would want to avoid in order to make sure that the project does not fall short on its objectives.

The wrong people in the room

Stakeholder involvement and management is crucial to any project at a multinational organization but especially so when it comes to a digital transformation project. Companies need to assign a suitably qualified individual to the role of digital transformation officer or project lead and have that person advise, based on our prior experience, which specific individuals need to be in the room.

This is about getting the right stakeholders and listening to their valuable contributions, then following up on these contributions. It is about targeting who you need to get the project done. Some people within the organization may be given a task based on the fact that they previously contributed to another separate project-but this does not necessarily mean they are suitable for this new project. Likewise, somebody who shows a desire to be involved, may not be in a position to contribute in the way that moves the project forward.

Forward momentum is absolutely crucial in digital transformation projects-getting the right people in the room at the start and continually engaging with them as the project continues will prove crucial to the outcome.

The wrong mindset

This is really about ensuring leadership and executive level support for the digital transformation project. Support will be needed financially but this is more about attitude and mindset as the wrong mindset is one of the common reasons why digital transformation efforts fail. This is about recognizing why there is a need for digital transformation initiatives, the justification for the project and a clear vision for the future.

Any digital transformation project lead will need strong advocates within the business at a senior or leadership level, particularly when it comes to those inevitable moments that momentum slows and the project risks stalling and losing ground.

This is when you need to return to the original objectives of the project and stimulate that mindset and culture of productivity and innovation that ensures a digital transformation strategy or project continues to move at momentum and with focus.

If the mindset needed is not in evidence at an early stage, then this is something that must be addressed straightaway. There will always be some level of resistance to a project from some stakeholders, and good digital project managers will have a plan in place around how to deal with these individuals- a plan that is about helping them overcome their concerns or objections based on data, solid logic and overall company objectives. It is important not to underestimate the importance of culture and mindset when it comes to digital transformation success.

Lack of clarity

This really shouldn’t happen, but you would be surprised at just how common it is. Key stakeholder buy-in, financial support from the finance teams and a good level of general enthusiasm from stakeholders and workforce are all well and good, but success cannot happen unless the goals at the outset are clearly defined and easily understood by everybody involved in the project.

Identifying the reasons behind the digital transformation and creating a clear and consistent roadmap around what you are trying to achieve will be crucial to the success of the project.  Global organizations must be very wary and avoid falling into the trap that is implementing a new level of technology for the sake of it. Leveraging cash, technology, people and resources without clearly defined goals and success metrics tends to lead to roadblocks as well as vague or unimpressive results.

Assuming it is all about the technology

This is an easy assumption to make but it is not necessarily accurate. Yes, technology will be the main component of any digital transformation project and the project will be about digitally upgrading legacy technology or no longer fit for purpose tech stacks. The goal will be to replace these technology stacks with innovative digital technology that is connected and integrated with other key systems within the business to drive higher operational efficiency and business performance.

But this is the result of a digital transformation project as opposed to the motivating factors behind it. New technology is not the goal- instead, it is about improving internal processes, equipping the workforce with better tools to help them do their jobs in a smarter, faster, better and more efficient manner. It is about adopting a culture of innovation where you move towards a clear goal while laying the foundations for an organization to be agile, responsive and adaptable in the future. This is a stablishing a culture DNA and way of thinking, not simply upgrading a technology stack or overhauling an IT infrastructure.

Going it alone

This is about a failure to bring in the right level of external expertise- digital transformation projects are often complex and nuanced and sometimes this reality only hits home several weeks into the project. By this time, some organizations have already put in place the people they think they need to deliver digital transformation and are a little unwilling to change course in the middle of a project.

Some organizations have been known to take the “we can do this ourselves” approach because they believe they have skilled people internally and financial support. While this may be true, a successful digital transformation project will almost always need specific and specialized talent to get it over the line.

A global payroll digital transformation project should always involve the use of a specialized global payroll technology partner, for example. Digital transformation officers should never be afraid to look outside the organization and leverage the skill set an experience of digital contractors or specialists who can provide valuable insight and expertise. Instead of being a financial drain and a burden, they usually speed up project delivery by bringing personal expertise and an outside perspective. Also, technology develops at such a rapid pace that you really need external people who specialize in this area to be a part of a project like this.

It can be really helpful to have some in-depth discussions with business partners or technology partners that you already have in place before you embark on a digital transformation project. Some may even have recently undergone a similar transformation themselves in the last 12 months and they will likely have hugely valuable information and insight to give you. A lone wolf approach is unlikely to serve you in the long run, so always consider digital specialists and those with experience in building technology platforms.


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