Why Digital Transformations Fail: Mitigate these Risks and Failure Points

Digital transformations often fail due to internal behaviors (unrealistic expectations, misalignment, resistance to change, lack of vision, over-delegation).  Companies should articulate future states, align goals, establish program governance, and foster risk recognition to mitigate failure risks.

Common Themes in Digital Transformation Failures:

• Research indicates over 70% of digital transformations fail.
• Failures often stem from internal behaviors and organizational psychology.
• Three recurring themes in digital transformation failures:
  • Unrealistic expectations.
  • Internal misalignment.
  • Resistance to change.

Contributing Factors to Digital Transformation Failures:

• Lack of clear vision for the future state of the organization.
• Over-delegation to project teams without clear direction or governance.
• Over-reliance on technical implementers, leading to reduced ownership and acceptance of change.

Strategies to Mitigate Digital Transformation Risks:

• Emphasize the importance of defining future state business processes and roles.
• Ensure strategic goals and objectives are articulated and aligned with transformation efforts.
• Maintain regular checkpoints with executive steering committees to prevent misalignment.

Role of Program Management and Governance:

• Establish program management and governance structures to oversee various workstreams.
• Avoid depending solely on system implementers for project management.
• Build internal competencies to manage complex projects effectively.

Recognizing and Mitigating Risks:

• Foster a culture of risk recognition and mitigation throughout the transformation.
• Encourage skepticism and realism to identify potential risks before they escalate.
• Leverage independent, neutral third parties for unbiased risk assessment and mitigation strategies.

Course Forward:

• Does your company or team need to better articulate future states, align goals, establish program governance, and foster risk recognition to mitigate failure risks?
• Build the Soft skills in your internal resources on project management, steering team interaction, strategic planning, risk mitigation, and leading effective teams.   
• Learn more about our Digital Transformation Leader coaching program!  See the benefits below, and find more details in this link.  https://www.beltcourse.com/ci-and-pillar-leader-curricula-sp

Source:

https://www.youtube.com/watch?v=duvLu4QsxgA&list=PLyVgVZd7jUlrAwzxca3m8pzo6Z3Y1KejV&index=45