Why Digital Transformations Fail: Mitigate these Risks and Failure Points

digital transformation operational excellence opex strategy project management Jun 24, 2024
Why Digital Transformations Fail
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





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