6 Reasons Why Digital Initiatives Fail And How To Avoid Them

Organizations are striving hard to achieve operational efficiency and reengineer their business models using digital technologies such as cloud, big data, analytics, social, and mobility. However, not all of them are able to successfully leverage these technologies and achieve seamless digital transformation.

According to a research and survey by Genpact “two-third of digital transformation projects fail.”

There are multiple reasons for a digital initiative to fail, but most of these transformation initiatives fail as organizations focus a lot on technology and miss out totally on processes and human resources.

Outlined below are some of the key reasons why digital initiatives fail and the ways to make the transformation program impregnable.

1. No clear roadmap and lack of vision

Transformation initiatives follow a top-down approach and therefore, having a strong leadership with compelling vision is a must. According a survey from Deloitte, digital strategy drives digital maturity. The survey mentions that only 15% of respondents from companies in their early stage of digital maturity have a clear and coherent digital strategy. Scope, objectives and goals are the key enablers of an effective digital strategy.

2. Tolerating skill gaps

There is a clear shortage of digital workforce, workforce that is digitally skilled and has an ability to use digital technologies in routine work. According to the burning glass survey, nearly eight in 10 middle-skill jobs require digital skills however, a survey from Capgemini uncovered that only 46% of digital companies are investing in the development of these skills. Clearly, tolerating skill gaps is a roadblock. Companies can overcome such a roadmap by conducting training programs or employee exchange programs with technology companies.

According to Capgemini’s “The Digital Talent Gap – Developing Skills for Today’s Digital Organizations Report” below are some of the best practices and examples of how brands are conduct training programs to address skill gaps:

3. Limited buy-in from the leadership

The CEO is busy, a few consultants are on board and no one is clear about the responsibilities and deliverables, that’s enough to fail it completely! Lack of senior buy-in can be a big bottleneck and hamper transformation. At times, top leadership might be resistant to such a change due to several reasons such as love towards legacy systems and lack of digital awareness, but these should be tackled well in advance for buy-in and acceptance. It is quintessential to involve the top leadership so to ensure the change management is in sync with the vision and the same is effectively communicated org. wide.

4. Resistance among employees

Ineffective communication, resistance to digital technologies and ambiguous cultural changes can all limit buy-in from the employees. Storytelling is an effective way to increase positive acceptance across the organization. Companies need to assure employees about how such transformation will impact their careers and business as a whole. Demonstrating a positive workplace on account of transformation initiatives will increase the adaptability.

5. Going digital in silos

Many a times companies consider implementing transformation for things that aren’t working instead of changing business models, operational processes and customer experience radically. An ideal digital transformation should happen across the organization. Such a transformation comprises creating digital products, leveraging on data & analytics, using digital technologies such as mobile and cloud, marketing using online media vehicles, following agile methodologies, moving to a digital customer experience and so on. While implementing it across the organization, do regulate/govern the pace regularly.  

6. Fixed budgetary cycles

Investments are often fixed to budgetary cycles and most digital initiatives succumb to this. Digitally mature companies measure the performance of their initiatives and ensure that the funds are increased or decreased basis the progress of these initiatives. Delinking fixed budgetary cycles from digital initiatives and making it responsive to the success of the initiatives will promote swift transformation.

These are only a handful of reasons why digital initiatives fail and we can tackle them. There are multiple other reasons such as ineffective communication, lack of transparency, poor data management and a rigid organization structure which can hamper the growth of transformation initiatives. A clear digital strategy, org. wide acceptance and a drive to adopt digital technologies will ensure a smooth digital transformation journey.