Digital Transformation – Why does it fail?
by: Loren Eckart |October 30, 2017 | Category: Digital Transformation
Facts at a Glance: The Transformation Challenge: Over 70 % of Digital Transformations initiatives fail
• Half a century ago, the life expectancy of a Fortune 500 company was 75 years; today it’s 15 years.
• More than 40% of all businesses today will not survive the next 10 years.
• In response to these threats, over 50% of businesses have embarked on a mission to transform themselves, often into a more digitally-focused version of the current business they are today.
• More than 70% of these transformations will fail to realize the goals of the business.
Exploring why Digital Transformation fails:
Digital Transformation can fail for two keys reasons. The first is due to a Limited Perspective. There can be too much emphasis on technology and not enough focus on the customer or misaligned business objectives; this leaves an incomplete perspective on what problem is truly being solved. A combined perspective from stakeholders that have a breadth of expertise and insight is essential to drive a successful digital transformation. It’s not just the CIO – it’s the whole company.
The second reason can be an Inflexible Process. A traditional IT process, including agile or waterfall, is often used to drive an overall digital strategy that crosses numerous functional areas. This fails to recognize the unique risk management nature of driving an innovation process and successfully integrating it back into the business. A process that recognizes the innovation lifecycle is essential.