How businesses become lost in digital transformation: The warning signs

The Warning Signs - Mind the Gap sign printed on the edge of the platform at a train station

Most businesses don’t need to be sold on the benefits of digital transformation. A study found that 84 percent of worldwide executives believe enterprise digital transformation is “critical” to their company’s survival within the next five years. About 55 percent of respondents said their business is piloting programs right now, while 22 percent are in the planning stage and 19 percent have completed some projects. Only 3 percent of respondents said they’ve completed enterprise-wide transformation.

Transformation isn’t a trend; it’s reality. And it’s becoming more normal to be in change year-on-year as competitive forces and customer needs continue to shift. Businesses see the rising tide of challengers in their industry, the ones who are already operating on that cutting edge and challenging pre-existing business model economics. They see that technology is changing quickly and consumer expectations are through the roof. They know there’s a chance to be disruptive, but also acknowledge that their own organizations have been slow to adjust.

So, they dive in.

Businesses often begin transformation in earnest, with the best intentions and the right instincts – a new ERP system, for example, really could make life easier for running and planning the entire business. But, for many, transformation is little more than a buzzword, and that’s because they are looking at transformation as a technology upgrade, a new executive hire or a few training courses. Little do they know that the new ERP platform becomes a challenge down the line for launching new products, services and change in an agile way. That’s because it’s considered in isolation.

Instead, business transformation should be a clearly defined and personalized strategy, rooted in improving the way an organization serves their customers and unique to how that organization operates. Without clear sight of that strategy, incremental changes lose meaning and become expensive cautionary tales. That’s why it becomes harder to gain internal support for future projects, and why businesses lose trust in transformation.

Meanwhile, their competitors – the “early adopters” – are passing them by, realizing the benefits of their own transformations in the form of better products, services, and customer experiences. But, as the “late majority” rush to catch up with their own transformation, they’d be wise to avoid these three potential pitfalls:

  1. The Snowball Effect: When a digital transformation initiative starts as a small, achievable goal for one team, but then blossoms into an untenable quagmire for the entire business.
  2. Inexperienced Partners Advising Bolt-on Solutions: When external business transformation consultants offer cookie-cutter fixes for challenges that require nuanced solutions.
  3. The Culture Challenge: When different parts of the business all want to make positive change for the organization but lack the forum and tools to pull in the same direction.

Read the posts above to learn more.