Improving Digital Transformation Success Rates
How to Improve Digital Transformation Success Rates
Only 30% of digital transformations are successful.
The rest are failures.
Still, you cannot hope to successfully navigate your market in the face of challenging macroeconomic climates without digital solutions.
Manual processes waste your team’s time, burn resources, and keep you from innovating. As such, you cannot simply avoid change.
Doing that puts you on the path of Sears, Blockbuster, and many other companies that failed to adapt to shifting markets.
Instead, you need a way to drastically improve your digital transformations' success rate. Especially with so much on the line…
We’ll point out 9 reasons why digital transformations fail and share solutions for navigating those challenges.
Implementing the strategies here should help you improve your success rate.
9 Reasons Why Digital Transformations Fail (with Solutions)
These are the main challenges you’ll face as you try to build, integrate, and automate solutions in your business.
Knowing what challenges to expect and how to navigate them is essential for improving your digital transformation success rate.
Problem #1: Lack of Clear Strategy and Goals
Digitizing processes without defining a clear vision is like practicing archery blindfolded. Your chances of landing on target are very small.
The chances of collateral damage… are much higher.
Most businesses start trying to improve processes without a definite strategy. As a result, they inevitably fail.
Without a clear strategy, you end up automating for the sake of automating. And that leads nowhere.
Solution: Collect Data and Define Goals
A well-defined DX strategy keeps your process improvements aligned to your business goals, mission, and vision. It also provides guardrails for digitizing processes and validating ROI on each new implementation.
A clear strategy contains:
- Vision - ‘why to transform’. It includes validation of change, short-term goals, and long-term objectives.
- Plan - ‘what to transform’. It includes people, processes, and legacy systems.
- Execution - ‘how to transform’. It includes tactics, KPIs, priorities, and interactions among information, teams, and technologies.
The step-by-step process for developing a digital transformation strategy:
- Collect and assess data to identify the current organizational state.
- Perform market research to become aware of emerging technologies and customer preferences.
- Define transformation objectives and align them with the organization’s short-term and long-term goals.
- Create a roadmap that outlines the actionable steps, timelines, skilled resources, priorities, KPIs, and budget allocation.
- Communicate the strategy to all stakeholders and regularly update them on progress.
- Implement the strategy with rigor while continuously evaluating and refining it.
- Use KPIs and stakeholder feedback to measure outcomes accurately.
Problem #2: Not Identifying the Root Problems
Digital transformation is not about buying new technologies and automating processes. Instead, it’s about rethinking how systems function, and businesses work.
Systems are complex.
Without diving deep, you’re much more likely to slap an automation, integration, or custom solution onto the symptom of a much deeper problem.
As a result, you only half-fix the problem. The return is minimal. And your team doesn’t get to experience the full benefits of digital transformation.
Solution: Map Out Workflows and Processes
Successful transformation starts with clearly understanding how work gets done in your business. To do this, you need to map out existing workflows.
You’ll quickly identify bottlenecks, slowdowns, redundancies, and other complications by mapping out workflows and processes. From there, you can start to rethink how certain processes operate and what you need to improve them.
You can do this using a whiteboard, sticky notes, or process mapping tools to draw out your processes.
Once mapped out, your team can quickly visualize the workflow and brainstorm improvements.
Problem #3: Weak ROI
With businesses spending nearly 4% of their annual revenue on digital transformation, there’s a real need to see a return on that investment.
The mistake a lot of businesses make is that they rush to automate everything and anything they can.
Worse, they focus on complex automation tasks from the start. These complex projects are riskier, stress-inducing, and time-consuming.
Meanwhile, leadership anxiously awaits a return.
Often, these projects sprawl as developers uncover other issues during development. As the scope creeps, the cost of these projects increases with it until the team shelves the project and reverts to the “old way of doing things”.
Solution: Focus on Low-Hanging Fruit First
While complex system overhauls can result in a substantial business improvement, they’re often not the best place to start in organizations looking to improve systems.
Instead, you need to start with small goals first.
Focusing on attainable goals first will:
- Provide momentum for subsequent achievements
- Enable a quick return on the investment required to fund the next iterations
- Motivate your team and make them more agile
- Facilitate a strategy review and necessary changes to fulfill the overall vision
- Let you meet your customers’ needs while you upgrade
As your team gains experience from smaller, more successful transformations, they’ll be better prepared for future, more complex projects.
Problem #4: Trying to Transform Too Much, Too Quickly
Digital transformation is not an overnight journey.
Change takes time.
To start with, your team needs to adopt the new technology and workflows. Your customers need to provide feedback. And your organization needs to evaluate performance and reflect on the experience.
All this takes time.
If you don’t take the time to analyze the impact of your digital improvements, you risk starting new initiatives without fully understanding what’s working and what’s not.
Additionally, you risk burning out your team if you have too many projects happening simultaneously.
Solution: Narrow the Scope and Prioritize
The best solution is to use an agile approach. An agile approach focuses on tackling tasks incrementally (instead of all at once).
How an agile transformation works:
- Create a DX roadmap with short, manageable milestones
- Form skilled, agile teams
- Prioritize initiatives related to digital customer engagement
- Execute the transformation in short sprints
- Use previous sprints to gain insights about the next sprints
The benefits of an agile approach in digital transformations are flexibility, improved teamwork, customer-centered, faster delivery, and better quality and risk handling.
Plus, you’ll reduce project sprawl and burnout as you transform systems.
Problem #5: Hiring the Wrong Team
Experts can provide vital insights, improving the success rate of digital transformations.
You need the right people to do the job. Yet, only 25% of organizations hire leaders with digital transformation expertise and other critical skills.
This puts most transformations at risk.
Without insights from experienced team members, you’re likely to make avoidable mistakes, waste resources, and put the success of your project at risk.
Solution: Work With Proven Experts or Consultants
You need experienced, interested parties with relevant skill sets leading and support your digital transformations.
Employees with skill sets in the cloud, data analytics, digital experience, and cybersecurity are best.
Alternatively, you can hire external consultants to manage digital transformations. They’ll leverage their experience to help complete successful transformations faster.
For example, Quandary Consulting Group has helped numerous organizations build, test, and deploy custom solutions with a 100% adoption rate.
This allows clients to focus on growing their business without having to manage digital transformation projects.
Either way, you want the best people for the job. Otherwise, your risk of failure increases.
Problem #6: Resistance to Change
According to McKinsey, 70% of digital transformations fail due to employees’ resistance to change.
It’s not that people prefer time-consuming, manual tasks.
Instead, they’re often stuck in old ways. It’s familiar. Learning something new requires effort, conscious change, and hope that it’ll be better.
As a result, most people push back against new systems.
Without your team and customers adopting new solutions, you won’t see a positive return on your investment. Instead, they’ll continue to use the old systems (the old way of doing things) for as long as possible.
If you want to succeed, you need your team to adopt new systems.
Solution: Build a Digital-First Culture
To encourage adoption, you need to create a digital culture that embraces digital transformation.
Conduct regular training sessions for your employees to help them embrace the new digital culture. Encourage stakeholders to get involved. Give your team time to learn and use the new systems. And coach those who struggle with change.
At the same time, you should encourage transparency. Show your team where they fit into the future of the business. Get them on board and excited for the change.
Finally, it’s important to establish clear communication with your team. You should also encourage everyone to share ideas. The more involved they feel, the better they understand the outcome, and the more likely they’ll embrace new systems.
Problem #7: Inadequate Technology and Infrastructure
You need high-performing IT infrastructure and modern technologies to offer digital solutions, integrate data streams, and automate systems securely.
That requires an investment in technology and infrastructure.
Everything from data centers and communication networks to IT security and end-user technologies must support the goal of offering speed and agility.
But building new software and solutions from scratch is often too expensive for businesses.
Worst case, a business can run out of funds before a transformation is complete due to scope creep or complications in custom builds.
After all, enterprises spend $27.5 million(on average) for digital transformation projects.
Solution: Use Low-Code Tools
You don’t have to spend a fortune upgrading IT infrastructure and technologies.
It’s a SaaS platform, so costs scale with use. And the tools are cloud-based, making them secure and accessible.
Low-code tools allow users to create custom applications using a drag-and-drop interface quickly. Users can learn the tools within a matter of weeks without a programming or application development background.
Alternatively, your development team can use low-code tools to increase their output. In short, it’s like a force multiplier for IT teams.
As a result, you can scale application development in your organization without burning through resources.
Problem #8: Poor Support from Leadership
Digital transformation can fail quickly without leadership support. 52% of organizations said it was IT, not leadership, driving their digital transformation initiatives.
Without a top-down approach to digital transformation, your IT team will inevitably collide against the leadership. You need commitment from leaders who understand the business mission and can help align transformation goals to business goals.
Without that level of commitment, your team won’t feel encouraged to embrace the change. It will feel like something IT is trying to force on them, not a critical part of organizational change.
Solution: Adopt a Top-Down Approach to Digital Change
Leadership needs to lead digital transformation initiatives. They must understand that in a world full of volatility, uncertainty, complexity, and ambiguity (VUCA), you need to be agile.
Agility cannot be achieved through personal efficiency alone. You need technological solutions. It’s the only way organizations can collect, manage, and use data at scale.
Leadership understands the business mission and what’s needed to stay competitive in the space. And they need to work with IT leaders to create roadmaps for change. Additionally, they need to work with teams to encourage trust and growth.
With a digitally-minded leader driving change, the rest of the organization will follow.
Problem #9: Failed Adoption
Too many companies focus on acquiring new technology instead of using it. This leads to impressive, expensive tech stacks that go underutilized.
On average, businesses waste 37% of their software budget on “shelfware”.
At the same time, they waste money building systems that may be worse than what currently exists.
This typically happens because there isn’t a plan in place to collaborate with team members on what they need out of a solution or train them on how to use it.
Worse case, team members will go out of their way not to use new systems. Instead, they’ll deploy shadow IT, leveraging tools they prefer and trust. And this exposes the business to additional risk and costs.
Either way, without adoption, your digital transformations will go nowhere.
Solution: Promote Citizen Development
The best way to improve adoption rates is to embrace citizen development.
Citizen developers are business users who are empowered with low-code tools to create custom solutions to the challenges they face every day.
They’re not developers.
Instead, they’re tech-savvy, full-time employees interested in improving workflows.
Rather than wait for IT to create solutions (hoping they’ll work), they use their experience and knowledge of low code to create simple integrations, automations, and applications that help them work better.
Citizen developers help organizations scale faster by offloading the workload from IT departments. They manage simple builds, giving developers more time to focus on critical tasks.
Adoption rates are higher because the people directly involved in the processes are creating the solutions. They understand the unique challenges and work to solve them.
Improve Your DX Success Rates with Quandary
You cannot afford for your digital transformations to fail. At the same time, you cannot avoid digital improvements to your business.
If you want your business to succeed, you need to leverage technology to improve your systems. And you need to do it in a way that generates a positive ROI.
But, that’s not easy to do on your own.
Without experience transforming processes and workflows, you can make costly mistakes that reduce the overall positive impact of your digital initiatives.
Worse, you can waste money, damage your workplace culture, and negatively impact your customers with failed transformations.
That’s why we exist.
At Quandary Consulting Group, our team of low-code experts helps businesses navigate digital transformations and build the solutions they need to stay competitive.
Check out our results below: