Why Digital Transformation Often Fails (And How To Succeed)

Digital transformation can help businesses boost efficiency, make data-driven decisions, reduce operational costs, support employees’ work and better serve customers. Even so, many leadership teams grapple with the challenges of implementing technological changes, with initiatives often stalling or spiraling out of control.

From the lack of a clear vision to internal resistance to change, there are many reasons digital initiatives come up short or fail altogether. Below, 20 members of Forbes Technology Council share some of the common stumbling blocks and offer practical advice on avoiding and addressing these issues.

1. There’s No Understanding Of The Target Architecture

Digital transformation initiatives often stall due to a lack of understanding of the target customer-driven business architecture. Organizations focus on technology but neglect how it impacts the customer experience. To avoid this, develop a customer-centric business architecture, map customer journeys and align tech changes with customer needs. – Margarita Repina, RepinaTech

2. The Team Loses Sight Of The Goals

To maximize the likelihood of success in digital transformation, it’s vital to agree on data-led goals at the outset and communicate these internally to ensure buy-in across the organization, with regular check-ins at key moments throughout the project. Adopting a data-driven approach to digital transformation as part of a wider strategy of harnessing data to enable growth and innovation will ensure pitfalls are avoided while showing transparency and accountability as the transformation progresses. – David Grant, Westcon-Comstor


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3. There’s Too Much Focus On Microprocesses

Focusing too much on details and microprocesses can cause digital transformation initiatives to stall. The sheer volume of these “micro things” can put so much pressure on team members that they may even leave the company. To avoid this, deliver small, incremental changes and secure top management commitment. – Max Dinman, RichBrains

4. There’s Not A Strong Product Owner

Too often, digital transformation initiatives blow up budgets because various stakeholders add unnecessary, nice-to-have features. An initiative needs a product owner with a solid understanding of the core purpose and the long-term vision and power to control each project phase to ensure it stays on track. – Nik Froehlich, Saritasa

5. There’s No MVP

Projects often fail due to unclear goals without milestones, which leads to unchecked spending. When executives review progress and find no results, they often halt the project to minimize damage. To prevent this, organizations should deliver an effective minimum viable product within the first 90 days to build credibility and momentum toward achieving the project’s ultimate value. – Deepak Tiwari, Ernst & Young

6. The Team Is Resistant To Change

One major issue is employees’ resistance to change, as adaptation requires effort and the benefits are not always evident. To mitigate this, treat every digital transformation initiative as a separate project with proper planning, assignments and management. Ensure transparent communication of the reasons and advantages of each initiative, and report publicly on progress and the results of its implementation. – Ilya Lashch, Lightpoint Global

7. There’s No Defined Meaning Or Alignment With Strategic Goals

We most commonly see missteps when an organization fails to define the meaning of digital transformation for its business and align it with strategic goals. Identify clear objectives and build a comprehensive strategy. Ensure leadership commitment, invest in training and empower your team. Embrace an Agile methodology, and select scalable, integrable technologies, using data-driven choices to guide your path to success. – Geetha Kumari Kommepalli, Skillsoft

8. The IT Infrastructure Is Inadequate

A common reason for digital transformation failure is inadequate IT infrastructure and/or readiness. An organization can proactively avoid this by assessing its existing systems, implementing upgrades or using alternative technologies (as needed), and ensuring that the IT infrastructure can support the digital initiatives. This will reduce the potential for disruptions from digital transformation and simplify the transformation journey. – Parul Batra, neuro42

9. There’s A Lack Of Needed Skills

Lack of skills is a major reason that digital transformation initiatives stall and, indeed, fail. The mistaken assumption is that the right people with the right skills will just materialize, when in fact planning is needed to ensure the requisite workforce will be in place. This workforce planning is even more critical for the highly in-demand skills that are needed for digital transformation. – Alicia Roach, eQ8

10. It’s Not Grounded In The CX

You must stay grounded in the customer experience and business economics. Understanding the transaction experience in a digital channel and transforming accordingly is key to retaining customers for the products and services undergoing the transformation. Without these guardrails, the scope can spiral as technology is pursued for the sake of technology. – Biju Nair, Assurant

11. There’s No Clear ‘Why’

“Digital transformation” is a misnomer. Every digital transformation requires change from people, and this is often where things come unstuck. To be successful, transformation projects must have a clear “why” (not just money for the owners) that has buy-in at all levels of the organization. The benefits must be shared by all stakeholders—even those staff members whose roles will become redundant as a result. – Stephen Farrugia, BAI Communications

12. It Can Be Resource-Intensive

Digital transformation initiatives can stall because it takes time to train personnel and internal resources must be allocated to implement and maintain the technology. Working with technology partners who truly understand your business and provide not only the technology, but also the expertise and resources, can ensure that digital transformation is seamless and effective. – Itzik Levy, vcita

13. It’s Not Being Handled By A Dedicated Team

Digital transformation initiatives often stall due to lack of project management and strategy execution. To avoid this, organizations can establish a dedicated team (internal or external) to manage the transformation as a structured project. This team ensures stakeholder alignment, enforces deadlines and maintains focus on strategic goals, preventing derailment and fostering successful outcomes. – Christoffer Bouet, Contribe

14. The Only Investment Is In Technology

Digital transformation must occur on three levels: people, processes and technology. Companies often mistake digital transformation as being simply technology transformation and invest heavily in technology while neglecting people and processes. To avoid this, all three areas should be transformed in tandem. This cohesive approach accelerates both the transformation and the adoption journey. – Vikrant Labde, Cuelogic Technologies

15. It Requires A Culture Shift

Digital transformation often means becoming a software company, which can be challenging for organizations with traditional business management, because it requires a cultural shift and new IT management. This causes initiatives to stall. To avoid this, companies should aim for quick wins with automation to build momentum and continue the transformation iteratively. – Victor Shilo, EastBanc Technologies

16. There’s No Clear, Cohesive Strategy

Digital transformation initiatives often stall due to the lack of a clear, cohesive strategy. Organizations may adopt new technologies without understanding how they align with business goals or existing processes. To avoid this, develop a comprehensive strategy with clear objectives, secure stakeholder buy-in and implement a phased plan for continuous evaluation and adjustment. – Vamsi Krishna Dhakshinadhi, GrabAgile Inc.

17. Legacy Systems May Get In The Way

Legacy systems can throw up roadblocks to digital transformation. Many enterprises have decades-old systems layered with custom code, making change costly and time-consuming. Embracing composable microservices that plug into existing infrastructure allows companies to keep existing systems intact while infusing transformative capabilities at speed. – Alfred Kahn, OvationCXM

18. There’s Poor Change Management And Communication

Poor change management and communication often derail digital transformation. Organizations can counter this with a robust change management plan, clear communication channels and regular updates. A “crawl, walk, run” approach allows gradual, manageable implementation. Prioritizing transparency and stakeholder engagement fosters adaptability and buy-in, ensuring smoother execution. – Hemant Sahani, VMware

19. Teams Try To Do Too Much (Or Too Little)

Many approach digital initiatives from either “a toe in the water, single task” direction or “a big bang, digital transformation platform for all tasks” direction. In reality, what is required for success is a strategic view of the direction and platform, with a focus on high-value process execution to prove benefits and facilitate the appetite for further transformation. Focusing on people and processes is key. – Henry Patishman, Regula

20. There’s A Lack Of Quality, Connected Data

Data quality is essential. Is it being managed according to internal rules or governed according to industry regulations? Are you connecting the right sources to get a top-down, full-company view of projects, teams and people for impactful decision-making? When transformations break down, look at disconnected data and the way it can sow doubt in the decision-making that drives impact and transformation. – Ed Jennings, Quickbase

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