Following our recent post Charting the Digital Transformation Genome, a HBR paper examines the reasons why some high profile digital transformation programmes fail based on the experiences of compaies such as GE, Lego, Nike, Procter & Gamble, Burberry, Ford and others. All case examples of heavy commitments to digital capability development which failed to meeet basic financial performance objectives.
The authors present four main reasons for failure:
First, there are a very wide range of factors that impact on a company's performance as much or even more than digital. Managers, therefore, should not view digital as a panacea.
Second, digital is not just about technology. Successful digital transformation is an ongoing process of changing the way you do business. It requires investment in new skills, people, projects, infrastructure as well as IT systems. It involves the integration of people, technology and business processes, combined with digital leadership, continuous monitoring and intervention from the top.
Third, digital investments need to be calibrated to the readiness of your industry, both customers and competitors, have a clear strategic fit with overall corporate objectives and hardwired to value.
Finally, companies should be careful that the investment in digital does not destroy traditional sources of comptitive advantage. The prospect of launching a sexy technology-based business can be tantalizing but can result in executives paying too much attention to the new and not enough to the old.
You can access the full article here - Why So Many High Profile Transformations Fail.