Where Digital Transformation go wrong?

In this fast-moving world Digital transformation has turn out to be a global trend, and almost every big and small company is heavily investing in this area. As per the survey of IDC, by next year that is 2023, the digital transformation market is likely to reach $6.8 trillion and 75% of the organisations will have thorough digital roadmap in place. But you will be surprised to know that with so much at stake to build digital capabilities that drive customer centricity & productivity, 70% companies fall short of their objectives. They are failing badly in their digital transformation initiates – this group include not just troubled companies, even top performers, market leaders, and investor favourites are also part of the same. When Harvey Nash / KPMG done a survey, they concluded that only 41% of the companies have an enterprise-wide digital strategy and only 18% of them rate their use of digital technology as “very effective.”

Someone said very rightly that following latest trends, management processes and technologies might lead positive and successful changes. But it might also lead to hurting your organisation. Digital transformation is important, but it’s even more important to do it right. We can broadly categorise digital transformation failure into three buckets…

Regression…is when digital transformation is not progressive. When they believe they are transforming, they're embarking on initiatives that should have been abandoned or implemented long ago.

 

Underperformance…happens when they fail to place larger bets on their transformation efforts – when they don't put sufficient effort into projects that can create better value for their business. In such a case, they will still benefit from digital transformation, but on a small scale.

 

New Tech Initiates…businesses fail at new tech initiatives when they intend to launch a new digital product/service, but it fails, and they are then forced to abandon it.

• Digital transformation is more about mindset and strategy than technology. Companies with incorrect transformation mindsets often find their digital initiatives either regress, underperform or fail.  Correct mindset at workplace sees digital transformation as an opportunity for professional growth. But, at the same time, an incorrect one can let them believe it is infringing on their ability to display competency. While it’s true that most people oppose changes, digital leaders and CEOs can play a crucial role in bringing about the mindset change needed for successful transformations.
  
  
• Many leaders view digital transformation as an enhanced term for what their IT department does. Yet many others focus on digital activities specific to other functions like marketing or sales. This raises a serious question that, does the leaders have figured out their "whys" towards digital transformation? Do they plan to adopt digital transformation just because every other company seems to be doing it, and they don't want to stay behind? This is a big problem. Because when you lack a clear definition of digital, you cannot connect the digital strategy to your business. And soon face poor digital adoption and change.
  
  
• When company's top managers aren't looking in the same direction, it is doubtful that digital transformation efforts will succeed. This leads to a lack of consensus among the top managers regarding the necessity of actions and efforts. It happens when they fail to understand the process of going digital. Or when they do not have the necessary insight to understand what needs to be done and how it will impact the bottom line. Working in silos for a digital transformation journey should be a big no-no. It’ll make it difficult for managers of various functions to work in sync for the process.
  
  
• For some companies fear of failure, is a reason enough to hold back innovation and stick to the comfort of familiarity. But this often has damaging effects. It creates resistance to changes, which initiates failure in your digital transformation. As with any other project, digital transformation projects can face temporary failures making the teams scared to move forward. But it's essential to address the fear and move ahead with confidence. There are ways to address the fear - Consider building an MVP – minimum viable product with a mindset of continuous improvement or take small measurable steps towards success and motivate teams. 
  
  
• The expertise of your employees is one of the critical factors for a successful digital transformation. If they do not have the right skills and experience, they are bound to make mistakes and not deliver on their targets. Transforming your business digitally means moving your business processes to the cloud like environment to create a better customer experience and enable employees to work in collaboration from anywhere.
  
  
• Change management is another crucial skill without which people will not accept and support the change. But that doesn’t mean you start looking for outside talent. Instead, you can train your people on the new technologies. This way, you will empower them and bridge the skill gaps. It will also boost your employee morale and job satisfaction.
  
  
• While technology is a crucial factor of transformation, organizations should be careful of the approach towards it. They should not treat this as a shiny new toy that everyone else seems to be using and they don’t want to be left behind. Mostly organizations easily get fallen into the tech trap by picking tools/ technologies that won’t help satisfy customer needs or add little value to the business model.

No doubt digital transformation is imperative for most companies in today’s world. However, it should never be an end, but rather a means to an end. Before you start taking actions, you must define the end goals. Which problems are you trying to solve? How can you serve your customers better? How can you improve internal processes in your teams?

 

Digital transformation is not that something your organization can afford to miss out on.  An average of roughly four of today’s top ten incumbents (in terms of market share) in each industry will be displaced by digital disruption in the next five years. “Don’t let that be you”.

 

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