You only need to search “Why digital strategies fail” or “Digital transformation failure rate” and dozens of articles and studies will show up (some of them good but paid) presenting alarming failures in strategies of digital transformation amongst companies.
Since 2015, all the big consulting companies (Forbes, KPMG, Deloitte, McKinsey, Wipro Digital, Gartner, etc.) published studies and, according to them, the digital transformations process failures rate in companies is between 50% and 84%.
It is undeniable that Digital Transformation, that for many are the only way to save companies, is not working.
After 4 years and hundreds of millions of dollars poorly spent in technology (maybe billions), there are still some people and companies that believe that digital transformation refers only to technology.
If you are one of these people, but you are open to change your mind, I invite you to read this article carefully, otherwise, it was a great pleasure, thank you for accessing the content, but it is time to say goodbye.
It is clear that digital strategies or digital transformation processes (either way) do not work, in the majority of the cases, and that is a fact.
Since against facts, there are no arguments, what we need to know is why. After reading a dozen of articles, published by the same consultant companies, like “10 reasons why digital transformations fail…”, we could make a coarse summary (yet realistic) and say the common factors are:
- Lack of alignment between expectation and the results of digital transformation
- Lack of alignment between digital transformation and business
- Lack of alignment between the whole transformation process and organizational culture
That is, none refers to technology…
Digital transformation has an impact on the business (processes, products, services, business models and results) and has an impact on people (clients, contributors, and partners), therefore the organizational culture. Applying technology to make more and make it better in comparison to what the company does today is very basic and simple.
If you have a basic car going in the wrong direction and only think about technology, the solution would be to change the car for a race car, and you know what will happen? You are going to be much faster and get there earlier…to the wrong destination.
Thinking technology will resolve all your companies and humanity’s problems is our biggest problem!
In this process of transformation, we are living in within society and companies, there are several variables we should consider:
- New generations oriented towards purpose
- Four simultaneous generations on the labor market
- Exponential society
- Corporate dissociative disorder
- Technological deflation
- Collaborative economy
All these factors have an impact on the business and many of them show us clearly that the actual models are drained. Therefore, most companies use technology to make more of the same or to transform their business?
In this process of complex and multifactorial transformation companies must be able to see that the risks and opportunities are not in the technology itself but in the impact that the technology causes.
Does your company know how to measure technology’s impact?
This is a template that can help you.
Normally, these impacts, when positive (opportunities), are converted in feedback to the shareholder (important and necessary), the problem is the negative impact (threats) that are hidden behind a hypocrite belief repeated constantly by entrepreneurs and executives as a way to relieve their conscience: “I create jobs and I pay taxes, I do my part”.
Shortly I will publish an article about Corporate Dissociative Disorder and you will understand the reason why I'm so critical of this belief.
Regardless if the transformation goes well or is unsuccessful, it will create an impact on the company (businesses) and on society (human being), as I call it Active Digital Transformation.
If the digital transformation I perform is going to have an impact on others, obviously the digital transformation made by others is also going to impact me, Passive Digital Transformation.
At this point, there is not a single company that is not doing or thinking about undergoing digital transformation, therefore it is crucial to look for tools and methods to analyze the impacts of the Passive digital transformation because inevitably these impacts will lead a company to rethink its business models. I dare to say the Pareto Law (80/20) also applies to the digital transformation impacts, 20% on the active digital transformation and 80% on the passive digital transformation. Companies only look at the 20% (if they do), and ignore or do not know about the 80% and hope things work…For all these reasons, most of the digital transformations fail, while the world is transforming, some people think they will solve their company’s problems by selling cybersecurity, IoT, IA or Cloud.
Several think technology is important and not what it is applied to, they do not think about the social or the environmental impact of the business, and at most consider people as a client (and not as a human being). In this exact moment I am sure some of the readers are thinking about how their companies care about the environment by using a led lamp and turning off the lights when they exit the meeting room, some even think that for having ISO certificates or other alike, are conscious, others think about how their companies are worried about society because it allows volunteers to go visit an asylum or an orphanage in the morning or because of the campaign promoted for the employees to bring clothes.
I can only say one thing, do not fool yourself, that is EXTREMELY far along from the necessary and the doable. I will write how and why our goal is to end RSC areas. If a company is conscious, if your business has humanized practices, there is no need for an RSC department to do charity for marketing, as many do. We live in an odd moment of our history and have in our hands the big opportunity to transform society and the world we live in in a better place.
Technology and innovation should be the main roles in this transformation process, to transform companies in sensible and sustainable organizations.
Do you want to know how? Learn about the methodology of Techno-Humanization of Organizations.
About the Author
Founder of BE&SK and creator of the methodology of Techno-Humanization of Organizations.