Why digital transformations fail

Posted on October 4 , 2021. 
By James Egremont

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Digital transformation is on the minds of most business leaders across sectors in South-East Asia and beyond, especially with COVID-19 forcing more employees to work remotely. According to a report by Deloitte, 69% of companies in Asia-Pacific say that the pandemic has “significantly accelerated” their digital transformation efforts.

Even before the pandemic, adopting new technology has always been necessary in order to improve business processes and culture, as well as customer experience. Companies that do not evolve will inevitably be left behind – usually sooner rather than later. However, for all the promise of our information age, executives increasingly find that digital initiatives simply aren’t giving them the returns they expected. A study by the Boston Consulting Group found that 70% of digital transformations failed to achieve their objectives.

Why are so many companies falling short in their pursuit of innovation? 

Too many businesses make the mistake of conceptualising digital transformation as a purely IT-based effort, when it is more properly understood as a people problem. By prioritising strategic hiring and goal-oriented employee development, companies can avoid the most common pitfalls surrounding digital transformation.

Getting the right tools

One of the main reasons that digital transformation efforts fail is that they don’t directly resolve issues faced by the business. Technology is a powerful tool, but no tool adds value until it is made to serve a useful purpose.

As many business leaders have learned to their cost, it can be easy to get lured in by flashy products that end up being a terrible fit for their company’s operations. To avoid falling into this trap, companies must hire people who can identify the right software and systems. These solutions should be compatible with the structure and needs of the organisation, while also enhancing its functionality and productivity.

A skilled IT team is critical to developing and maintaining design tools that address the unique needs of your business, customers, and stakeholders. Often, this effort requires people whose combined experience in technology and business enables them to facilitate a smooth transition by translating modern digital methods into existing ways of working. IT-minded professionals can help refine those tools as the company grows, to keep them on track alongside shifting aims and objectives.

Success starts at the top

Digital transformation often loses momentum due to a lack of structure and direction. Even if a new technological solution has been developed specifically to match company needs, the surrounding effort can quickly run out of steam without active support from managers and executives. 

Setting clear metrics and targets can support employee efforts, unifying the company and helping to structure the introduction and implementation of initiatives. Just as importantly, however, the adoption of digital initiatives requires alignment between C-suite levels and middle management. If either is missing, the process can fall through. Effective transformation also requires good collaboration between heads of departments, to ensure that all parts of the business work together coherently.

However, without cooperation and participation from everyone in the company, even the most motivated manager cannot keep a complex system functioning for long. It is important to remember that introducing a new piece of software or a new platform can sometimes be viewed as a chore for many employees. Worse still, some staff members may actively reject such changes for fear of losing their jobs. 

The right people can help tackle these problems before they arise, by aligning the culture and mindset of the company toward digital transformation. Digital disruption can be an inspiring journey if it is driven forward by leaders who can set the right tone for the rest of the organisation. This means getting people excited about the change, as well as easing fears by explaining the various opportunities that digital transformation can provide for employees.

A great deal of apprehension from within an organisation arises from people being unprepared. People are resistant to change, especially change they do not understand. A lot of time, money and effort goes to waste if expensive software ends up being underutilised or outright ignored by employees who lack the knowledge or skills needed to use them.

Good leadership can also provide proper training to upskill the existing workforce. The transition can be made much smoother by training and bringing in employees who know how to use new platforms before they are up and running.

Problem solving and resilience

Despite a company’s best efforts to prepare for digital transformation, undergoing disruptive change can be arduous, lengthy, and rife with hiccups and setbacks. A “fail-fast” approach may cause a team to abandon an initiative before it produces any results, especially with executives who associate temporary setbacks as absolute failures. 

It is therefore essential to hire people who are resilient against pressures from within the company and from competitors, while providing practical solutions and adjusting strategy according to the circumstances. It may be necessary for them to change legacy systems and structures that would prevent the organisation from fully and effectively transforming.

Of course, digitisation can also lead to unexpected consequences in the later stages of the transformation. These include cybersecurity, data privacy, and compliance concerns, given the increasing amount and evolving complexity of online threats.

Personnel with the right expertise in digital security and compliance can help guide an organisation through the potential issues that may arise. With the right people, protocols, and precautions in place, the business can significantly minimise the risks that come with digital transformation – giving it a far greater chance of success.

Finding the right team

Adopting new technology for technology’s sake is not a recipe for success. Innovative systems can sound exciting, but they can’t help your business succeed unless the company culture, business model, and technical proficiency can support their introduction. In order to do that, an organisation should prioritise their people at least as much as their technology.

When digital transformation fails, the fault is not with the shortcomings of technology or software. Disruptive change requires the right people to carry it forward. That is why it is important to have the best people on your team. 

Successful companies often look for people with experience working in startups or tech-based firms, to help steer them through the disruptive process of going digital. However, people with this kind of experience are in high demand across all industries, so finding the right addition to your company can be a struggle.

The Connexus Global team can bring in the right talent to drive your digital transformation initiatives, whichever particular skills your company needs.

Contact us today to learn more.

James Egremont

Managing Director

Consumer & Industrial Markets


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