In this 5-part series, I discuss the importance of digital transformation, how to ensure you achieve your organizational goals, and the best ways to plan for success. You can read more about some of these topics and more in my books, The Center of Experience and Digital Delight, available in print and digital versions.

Great customer experience (CX) is more than something that is nice to have. It is now one of the chief points of competitive advantage for many brands across a growing number of industries. One of the biggest roadblocks to providing a more seamless experience to customers is the need for digital transformation within the organization. Whether the transformation helps the direct interactions customers have with your brand, the operational aspects behind the scenes, the measurement of CX, or all of the above, it sometimes takes large-scale organizational change to enable a better customer experience.

Why do digital transformation initiatives fail?

A great digital transformation has tangible benefits to a company’s bottom line, as well as to its customer experience, employee experience, and its ability to compete in the marketplace. Sounds pretty wonderful, right? Then why do so few companies achieve success with their digital transformation initiatives? The numbers are rather disappointing, with Bain & Company recently revealing that less than 10% of global companies are able to achieve their targeted outcomes from their digital technology investments. 

Let’s take a look at the primary reasons why digital transformation initiatives fail to reach their goals, and some ways to mitigate them.

People and company culture

It’s “digital” not “people” transformation, right? Well, not so fast. Your employees, and your company’s culture has a critical role to play in how successful your digital transformation initiative will be. They are so critical, in fact, that 16 of McKinsey’s 21 keys to success in digital transformation involve people.

You can think of this category of failure as being related to both a culture that does not embrace both initial change as well as continuous improvement, as well as to a culture in which there is poor communication. Both are critical to success, and may require work to be done even before you undertake a digital transformation. I can’t stress this enough: your people are going to make or break your efforts, so make sure you have alignment and the right teams in place or else you will run into hurdles.

This includes both executives and the entire rest of your employees population. You need your leaders to truly lead the way, but engaged employees, whether front-line or behind the scenes, will be crucial for long-term success.

While every organization utilizes different methodologies and change management philosophies, some type of agile approach to continuous improvement is vital in order to meet the short- and long-term requirements of your digital transformation initiative and its corporate goals. 

To help solve this challenge, take efforts to win the buy-in of your employees, ensure your leaders are ready to lead regardless of how difficult things might get at certain points in the process, and ensure that your organization has systems and processes in place to continuously improve your transformed company once the initial phase of your efforts are complete.

Improper scoping

If your digital transformation ends up looking more like a website redesign, or a CRM implementation, or fails to meet the definition of “transformation” you may fall short of the lofty expectations such initiatives often face.

Likewise, sometimes the scope of an initiative can be so broad and deep that it faces the opposite outcome: being too big, expensive, and time-consuming to ever get completed. While your desired outcome is transformational change, you need to be realistic about the types of outcomes you can achieve in a reasonable timeframe and budget.

Improper scoping can cause a less than optimal outcome to your digital transformation initiative. Make sure it’s not so small that transformation can’t be achieved across your organization, or that it is not so widespread and complex that it will never be able to be implemented. Find a “just right” solution in order to achieve maximum success.

Lack of meaningful measurement

It seems like this last one should go without saying, but you’d be surprised how many organizations undergo complex digital transformation initiatives without clearly measurable key performance indicators (KPIs) that align directly with their business goals. 

Part of the challenge here is that a transformation often makes fundamental changes to how measurements are made, which can cause a disconnect. Even though the transformed systems and processes are more efficient and offer a better customer experience, you can end up with an apples and oranges comparison unless you take this important point into account.

Another aspect of lack of meaningful measurement is not getting buy-in from all stakeholders on what success looks like before the effort begins. While siloed departments might have their own agendas that a digital transformation helps to achieve, the effort will not be truly successful unless shared objectives are defined, analyzed, and met.

To help solve this challenge, you need a unified consensus on what success looks like, and to have an apples to apples set of KPIs that will allow you to measure the strength of the digital transformation initiative. If you fall short of your goals, or if you inevitably want to build upon your initial KPIs, you need a system and processes of continuous improvement in order to do so.

Conclusion

I hope you use the ideas above to help avoid some common pitfalls that hinder many organizations’ success with their digital transformation initiatives. With the right team and culture, a realistic scope, and meaningful measurements, you can work towards successful outcomes.

In the next article, I’m going to discuss how to use agile methods and processes to get started and ensure success with your digital transformation initiative.

You can read more about some of these topics and more in my books, The Center of Experience and Digital Delight, available in print and digital versions.