Why most digital transformation programmes are doomed from the start

Digital is one of the key disruption initiatives being applied by business strategists and enterprise architects to wake-up moribund industries such as financial services, consumer packaged goods and fast moving consumer goods. It promises superior levels of engagement with customers for a fraction of the cost of conventional analog methods, amongst other strategic benefits.

Considering that many of these particular industry sectors spend 5-7% of their gross revenue on marketing and branding activities, it is not hard to see why the disruptive approach of digital is so compelling and attractive to them.

On a technical level, digital speaks to the leverage of many disparate initiatives in mobility, internet, applications and security to create a suite of capabilities all focused on customer and collaboration. It allows IT functions to create an integrate delivery stream which they can manage end-to-end.

>See also: How to undergo a digital transformation at your business

In spite of deep spending on digital transformation endeavors, payback still seems illusive for most. Like most transformational endeavors, digital is not immune from the intrinsically high rates of program failure & disappointing strategic outcomes. In most cases this is directly attributable to disengaged senior management who cheerlead rather than take hands-on accountability, and overall poor execution by consultants who sell transformation methodologies and services to them. Given the stakes, one should ask: “Why is this?”

CEOs and boards use transformation as a strategic tool to move a well-established organisation out of its current doldrums and into a leadership position once again. It is a black art for the most part as most of these same people rarely understand how to execute transformational change and typically bet the farm on consultants and hucksters – i.e. thought leaders who sell transformation as the cure to all that ails with the proviso of, “Trust us, we will handle all the details.”

The failure rate and associated costs of these failures have become so high (and contentious) that all of the top tier consultancies now require their customers to sign gag orders that forbid them from going public about the debacles, much less requiring private arbitration to resolve all contractual and financial disputes. Given this, most transformation programmes seem doomed from the start.

Digital transformation is no different in this regard and yet I firmly believe that it is imperative for all organisations to embrace this paradigm shift. The primary rationale for this is the fact that it forces them to abandon their backward-looking, gut-based decision making and customer engagement endeavors in favour of evidence-based and always-on approaches – key components of a predictive enterprise.

In my advisory endeavors I have always counseled senior executives and boards to never waste a crisis in respect to fostering real transformational change in their business model and culture, and see the pursuit of digital as such an opportunity. Without a compelling impetus, organisations can barely muster marginal or incremental change successfully.

>See also: Leadership in the age of digital transformation

Digital transformation can provide a unique opportunity to realise the benefits of becoming a predictive enterprise while changing the dynamic between the organisation and its customers, partners and suppliers.

It portends to be the single most dramatic overall change that any established organisation can pursue as it breaks its many ties with the status quo and truly transforms.

The key to success is leadership from the top down, an engaged culture, and embracing digital outcomes as core competencies – not IT functions.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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