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Primary Reasons That Deteriorate Digital Transformation Initiatives

By Apoorva Kasam - March 16, 2023 6 Mins Read

Primary Reasons That Deteriorate Digital Transformation Initiatives

Digital transformation initiatives help enterprises unchain productivity, boost efficiency and minimize costs. However, lacking a solid roadmap outlining investments, dependencies, responsibilities, and governance can hinder digital transformation initiatives.

As per a recent report by Research and Markets, “Global Digital Transformation Market and Forecast up to 2027“, the digital transformation market is forecasted to grow to US$2065.47 billion globally by 2027 at a CAGR of 22.95%. With the accelerating demand, CIOs must launch an IT initiative that needs enterprise, technology, and market expertise. Digital transformation necessitates an adequate investment of money, time, and commitment. Failure to properly plan and strategize an initiative can adversely impact an organization’s credibility. Here are a few reasons causing collapses in the digital transformation initiative.

Flawed Leadership and Transformation Mindset

For any digital transformation initiatives, robust leadership is a critical component in addition to strategy and technology. Poor leadership gives rise to weak team engagements hampering time and resources. IT leaders must rapidly identify the source of the mistakes and plan an efficient remediation strategy to prevent and control the damage. They must work beyond their constraints and collaborate with other departments for a successful digital transformation.

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Additionally, an inoperative mindset is one of the crucial reasons why these transformations regress and underperform. CIOs play a pivotal role in ballooning a powerful organizational perspective by setting the tone, mending, and processing the behaviors. The right attitude is vital for securing adequate funds to drive digital transformation. Instead of just being an implementing partner, they must encourage and educate the team on why and how the digital transformation initiative will benefit the organizations in the long run.

Defective Planning

Poor planning conflicts with static business operations. IT teams must understand that inefficient collaboration with other non-IT activities can hamper inter-departmental resonation. A transformation management office (TMO) will function adequately to set a framework to monitor the advantages of an IT initiative. It offers a standardized team that interconnects the parts of an organization involved in the transformation.

Defective planning ultimately results in poor adoption and restricts the engagement of stakeholders during the development of critical parts of a solution. Therefore, planning should be optimistic and futuristic, with clear goals that drive value to the organization. Leaders must understand that each aspect of planning will result in or support IT initiatives. Therefore, plans should affect businesses and IT efficiency positively.

Lack of Governance, KPIs, and Technical Vision

Governance and KPIs ensure the digital transformation is monitored and tracked as planned. Enterprises can’t follow the objectives and progress without metrics and governance. KPIs provide early indications and necessitate adjustments if needed. Additionally, current applications, platforms, and architecture may not meet modern requirements. As per a recent report by Tek Systems, “State Of Digital Transformation,” 86% of digital leaders believe the organization’s ability to compete in the market largely depends on the flexible technology architecture.

Machine learning (ML), artificial intelligence (AI), edge computing, and cloud are powerful technologies that aid organizations in positioning a robust IT infrastructure. However, if an enterprise cannot leverage emerging technologies, it might enter into technical dilatoriness.

Fallacious Culture

Fallacious organizational culture can readily fail transformation initiatives. Adopting better cultural changes is as essential as digital transformation. Hence, businesses must embrace the cultural differences that digital transformation demands. IT initiatives require amendments in products, internal processes, and better engagement with customers. As per a recent report by Tek Systems, “State Of Digital Transformation,” 46% of businesses believe digital transformations enhance customer experience and engagement.

To achieve these factors, involving teams from various departments is an excellent way to work together more coherently. Not having a collaborative culture across enterprises can be a significant reason for digital transformation failures. Establishing a change management process is recommended to bring the needed cultural change. This process can help identify people actively resistant to change, followed by adequate training and education, and transform them to adopt the cultural difference quickly.

Not Recruiting the Right Talent

Organizations that fail to recruit the right talent with a better understanding and experience in implementing such transformations pave the way toward digital initiative failures. Businesses must understand that a successful digital transformation needs a stable team and fundamentals.

Hiring the right digital transformation team is challenging due to skill shortages in highly demanding fields like AI. Hence, employing the right skills can impart adequate knowledge and help enterprises focus on business processes and training initiatives. More importantly, retaining the existing talent who understands the business, market, and customers is essential.

Overburdened Schedules and Poor Commitments

IT leaders are preoccupied with multiple schedules and commitments. For a successful digital transformation, CIOs must focus on critical business operations and prioritize workforce augmentation cost-effectively, nurturing a potentially transformative initiative. Encouraging the developers to amplify the output with low-code platforms minimizes developmental time and will help IT teams keep up with the ongoing tasks. It enhances production without burning resources. Furthermore, ongoing risk evaluations, indecision, and poor risk appetite are the reasons that cause delays in an IT initiative. Alignment of digital transformation initiatives with business goals can repair the mistimed initiatives.

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Insufficient Funding and Business Stakeholder Communication

Funding plays an essential role in initiative timing and failure. It is better to halt rather than progress the digital transformation with insufficient funding. Reasons for underfunding can arise due to software, hardware, and labor pricing. Organizations must maintain a robust negotiation energy to help them stay within the budget and prevent trade-offs.

IT initiatives do not always positively affect business processes. Hence, stakeholders should be informed of all the positive and negative factors, aspects, and issues the organization faces during the digital transformation initiatives. This will help them to adapt to changes.

Irrespective of the size of the business, a good digital transformation strategy starts with a strong leadership team with a transparent vision of what the organization will look like in the long run. Hence, diligent planning is necessary for a timed initiative that has a cross-functional impact on enterprises. Aligning the teams and stationing adequate governance, KPIs, and funding will help enterprises maintain focus, deprioritize the projects, and aim to achieve a successful digital transformation.

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Apoorva Kasam

Apoorva Kasam is a Global News Correspondent with OnDot Media. She has done her master’s in Bioinformatics and has 12+ months of experience in clinical and preclinical data management. She is a content-writing enthusiast, and this is her first stint writing articles on business technology. She has covered a wide array of crucial industry insights like Blockchain, strategic planning, data analytics, supply chain management, governance, compliance, and the latest industry trends. Her ideal and digestible writing style displays the current challenges, and relevant mitigation strategies businesses can look forward to. She has a keen interest in the latest enterprise trends like digital transformation, cloud, and enterprise resource planning. She looks for minute details, while her excellent language skills help her deliver a crisp-looking, niche-specific message through her articles. She is looking forward to exploring her writing styles and portraying her thoughts that can help enhance organizational effectiveness, business performance, and sustainability. Apart from writing, she enjoys spending time with her pet and reading oncology publications.

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