The rapid digitization of every industry has challenged business leaders to rethink their technology and infrastructure. In fact, 89% of large global companies are actively pursuing digital and AI transformation today. But as organizations work toward innovative change, some remain stuck in strategy mode, while others wind up behind the competition despite their efforts.
According to McKinsey, businesses have only captured 31% of the full revenue benefits—and 25% of the maximum cost benefits—their tech-driven changes could enable them to achieve. Furthermore, only 35% of board directors report being on track to achieving their transformation goals.
So, what exactly is holding businesses back from harnessing the full potential of digital transformation? And how can organizations remedy the issues? Here are four key reasons why digital strategies fail and how you can achieve your transformation goals.
1. Unclear Vision
What does “digital transformation” actually mean? Without a clear definition, this all-encompassing goal—often too broad to visualize without concrete action items—can lead to scattered efforts across your team. Companies with an unclear vision are prone to experience a significant amount of action without progress.
While organization-wide digitalization can involve a lot of moving parts, from application modernization to operational change, leaders must be aligned on priorities. Working together toward digital transformation goals enables more effective and efficient movement. Top-perfoming businesses drive change with a clear action plan that aligns teams behind:
- Specific action items and objectives for each stage of implementation
- A realistic target timeline, created with available resources in mind
- Key performance indicators (KPIs), like adoption rate and return on investment (ROI), to ensure digital strategies remain on track
2. Poor Change Management
People are highly resistant to change—and that resistance persists in the workplace. Gartner reports only 38% of employees are willing to support organizational changes, and those who experience above-average change fatigue intend to leave their company more often. From the employee perspective, digital transformation can feel like a massive overhaul of the tools, processes, and business strategies they not only knew well, but contributed to.
For many businesses, the issue lies in the decision-making process. Too often, businesses adopt a heavily top-down approach, with leaders dictating digital strategies and overseeing the entire implementation process. But according to Gartner, involving employees can increase change success by 15%. Enabling employees to contribute their ideas, challenge decisions, and lead their own pieces of the implementation process can give employees a sense of ownership over transformation initiatives. It creates positive engagement with new transitions.
Another change management pitfall occurs when businesses over-prioritize speed of implementation. When leaders exclusively focus on the timelines their organization can achieve without consideration of employees’ capacity for change, fatigue can quickly occur. It is imperative for leaders to wisely manage timelines, moving at a pace that doesn’t overwhelm their teams—perhaps regularly collecting feedback to ensure sentiments on digital transformation initiatives remain positive.
3. Lack of Agility
The digital landscape is marked by rapid change. New disruptive technologies, market shifts, and customer demands frequently challenge initiatives. Inflexible plans can quickly lead to failure—digital strategies derail and risks become difficult to mitigate.
When pursuing digital transformation, businesses must prioritize the goal over the direction. Leaders must think on their feet, regularly evaluating opportunities for innovation and cost optimization, and showing a willingness to quickly change strategies as their industry and markets develop.
4. Limited Expertise
Successful IT projects require input from the right people—but businesses often overestimate their capabilities when they create their digital transformation plans. Without technical expertise to guide digital strategies, companies risk delays in their timelines as inadequate skillsets, budgets, and other resources hinder progress—ultimately leading to decreased momentum in their efforts altogether.
According to McKinsey, businesses pursuing digital transformation should aim to have 70-80% of the digital talent they need in-house; outsourcing should only occur when specialized skills are needed. Ideally, experienced technology professionals should outnumber both managers and junior-level employees. Identifying skills gaps and developing a structured recruitment plan prior to making headway on digital strategies is critical to swiftly achieving your goals.
Maintain Your Digital Transformation Momentum
Effective digital strategies can be transformative for your organization—enabling greater efficiency, increasing profitability, and creating a culture of innovation that lasts. However, businesses in pursuit of digital transformation must first eliminate roadblocks in their path to modernization. Establishing a clear vision, staying agile, and creating a change management plan are all critical in this process.
Skilled technical professionals are essential in every step, equipping organizations with the expertise and skills required to optimize digital strategies and achieve effective implementation. Capstone IT Staffing can help you identify your critical skills gaps and support your hiring needs. We understand your business from a technical perspective, providing application development expertise and rigorous, in-house technical coding tests to ensure you have top talent on your digital teams.
Start your successful digital transformation. Reach out to Capstone IT to learn how we can support your digital strategies.
