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Digital Transformation

Why digital transformations fail (and what the ones that capture value do differently)

The figure shows up in almost every industry study: around 70% of digital transformation initiatives do not achieve the objectives they set out to reach. It is not a technology problem —there has never been more and better technology available— but a matter of how the change is formulated, executed and, above all, adopted. This article summarizes what Dell and IBM research and the experience of thousands of projects say, and turns it into an action plan.

What the data shows

Dell Technologies’ Digital Transformation Index, built on surveys of more than 4,300 business leaders, classifies organizations into five maturity levels. Only 5% are “digital leaders” while almost half are lagging, and 94% acknowledge entrenched barriers to transformation. The priorities the leaders themselves declare are telling: 73% need a centralized technology strategy, 66% plan to invest in infrastructure and digital skills, and 72% want to expand their software development capability.

On the change management side, the consensus is even stronger: most of a transformation’s success is explained by culture and change management, and a smaller share by the technology deployed. Efforts stall due to employee resistance, uncertainty about roles and insufficient training.

The five causes we see over and over

  1. There is no “right problem” formulated. A platform is bought or a program is launched without a business case that says what business result is expected and how it will be measured. Without a clear definition of “digital”, the strategy is not aligned with the business and adoption is poor.
  2. Governance, testing and change have no owner. They are treated as “bureaucracy”, “a formality” or “optional”, so nobody funds or leads them.
  3. Implementing is confused with adopting. The project ends when the system goes live, not when people work differently. The Value Gap opens exactly there.
  4. Fragmented initiatives. Many projects, little orchestration: teams compete for the same people and data, and nobody sees the whole portfolio.
  5. No post-delivery measurement. Without usage and impact indicators there is no way to correct course or to scale what works.

What transformations that capture value do differently

They formulate before investing. A short diagnosis identifies where the biggest value opportunity is and builds a business case with measurable objectives and a prioritized roadmap. At KAP we call this Discover and Define.

They execute with governance and in short cycles. Quick wins that prove value in weeks, iteration and learning, with risk management and delivery control. Organizations with collaborative teams are twice as likely to succeed in their digital transformation projects.

They design adoption as part of the project. Clear roles, simplified processes, training and visible leadership: executives who actively champion the change are a recurring success factor in the literature.

They measure and scale. Business indicators before and after, tracking of actual use, and explicit decisions to scale, adjust or stop.

A practical model: from transformation to value

Our transformation model comes down to four actions: we understand (business and strategy), we transform (processes and technology), we implement (execution and adoption) and we secure value (results and ROI). You can enter at any phase —a diagnosis, a business case, a running program that needs orchestration (TMO) or a permanent transformation capability (Value Hub 360°)— and move forward in an agile, measurable and sustainable way.

Transforming is not the challenge. The challenge is turning transformation into value. If your organization has initiatives underway that are not delivering what was promised, a Value Discovery is the first step to recover them.

References

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