Why Large Organizations Fail at Digital Transformation

February 9, 2017 Off By Hoofer
Article Written by Sanjay Zalavadia, VP of Client Services, Zephyr

Legacy systems and processes are still being relied on for a number of mission-critical tasks across businesses, but these outdated approaches are starting to show their age in a lot of ways. Many companies have gravitated toward digital transformation as a means of improving capabilities and ensuring that they are able to keep up with the competition in the future.

However, a majority of these initiatives don’t succeed. Consultancy.uk noted that while 80 percent of managers believe that technology is here to stay, two-thirds of digital transformation efforts fail. With bigger companies investing billions a year on these projects, it’s important to ensure that deliver the expected results. Let’s take a look at the biggest reasons that large organizations fail at digital transformation:

1. Not agile enough

The size of the business itself can dictate a lot in its ability to fully incorporate new initiatives as well as effectively communicate and enforce policies across the board. With large organizations, there are a variety of moving parts, and it can be hard to keep track of. Some setups might not even realize what technologies are currently in place or how many users have access to them. Therefore, when it comes to the idea of a digital transformation, it can be challenging to make necessary moves when there are underlying dependencies within established systems.

With a smaller organization, they might be able to quickly rollout a system and determine how useful it is for their needs. Bigger businesses take a lot more time and effort to integrate a new system. They must thoroughly evaluate each possibility, roll it out in stages to ensure they don’t disrupt regular activities and train employees on how the new processes will work. Large organizations can be more flexible by using software testing tools and systems that capitalize on their capabilities; however, they must be willing to put in the effort to change.

2. Think of digital as a luxury

Many organizations still believe that digital is something that’s just nice to have rather than a necessity. However, as TheNextWeb pointed out, "now your customers, your products, your business operations, and your competitors are fundamentally digital." A large number of businesses have established a digital strategy, but few actually believe that they have the skills necessary to execute it. Organizations can’t keep thinking of digital as a bolt-on or additional strategy that will fade out in the future. Everything is moving to better, faster, more responsive technology and processes, and it’s up to businesses to follow suit or fall behind.

Many startup businesses are being designed for the digital age, so it’s integral to digitize your business strategy to ensure that your digital transformation is a success. This means taking advantage of mobile and social systems as well as using an agile development process to take advantage of the true opportunities that are in front of you. Large organizations must think of digital transformation as a core to their initiatives, and not a separate approach. With this mindset, businesses can better establish what their digital journey will look like and how it will be supported.

3. Focus only on technology

With a name like digital transformation, it’s easy to think that it’s going to revolve around replacing and updating technology and related infrastructure within a business. While this certainly is a part of the digital effort, that’s not all it takes to achieve digital goals. Going digital means that many of the processes and familiar tools will be left behind for more capable alternatives, but there’s likely to be some opposition to this shift. Forrester’s Martin Gill noted that many digital transformation projects fail due to a crippling lack of focus on business change, including getting employees in the right mindset for a large transition.

Culture is a large part of what’s going to help your digital transformation initiative succeed or fail. Employees must be open to trying new things and should not immediately fall back to their old processes when something doesn’t go as planned. Getting user buy-in will help determine what tools and strategies are going to be the best situation for everyone. This will increase the likelihood of success and better handle the large-scale change.

"The pace of change in the digital world – your customers, your competitors and the capabilities of the technology – means that traditional approaches to large-scale change management just don’t work anymore," Gill wrote. "Instead, you must learn to embrace iterative, customer-centric innovation to enhance both your customer and your employee experience. This means managing change in a new way."

Digital transformation is a major undertaking for any business, but it can be even more of a challenge for large organizations due to the time and money necessary to invest in an effort that might fail. By understanding why so many of these initiatives within bigger businesses fail, you can avoid similar situations and set your software development and QA teams up with the resources necessary for success.

Digital transformation is about more than just technology.


About the Author

As VP of Client Services at Zephyr, Sanjay Zalavadia is responsible for driving custom success. This includes training, consulting, customer support and client management. Most recently, as the Associate Vice President for Patni Computers Telecoms IT Managed Services Practice, he established IT Operations teams supporting mobile content providers.

Sanjay brings more than 15 years of leadership experience in IT and Technical Support Services teams across multiple geographies for both large and small companies. Sanjay has a graduate degree from the Manipal Institute of Technology in India. When he’s not watching Arsenal FC, he’s coaching his son’s soccer team.