Why So Many Business Digital Transformations Fail
By Prof Loredana Padurean | Associate Dean, Asia School of Business in collaboration with MIT Sloan | Thought Leadership, In The News
In the first of three articles on why digital transformations fail, Prof. Padurean at Asia School of Business lists the questions businesses must consider
Digital transformation is probably the most talked about business topic these days but it’s the area where most organisations fail to achieve relevant results. More than 70% of enterprises fail to create any value from their digital transformation efforts and fail to meet their business objectives. So why is that?
It turns out that when it comes to digital transformation, companies focus only on the technology aspect of the journey, the new sophisticated software, machine learning, AI, big data, cloud, but fail to realise that the process of ‘transformation’ requires a much more comprehensive approach.
And it’s an approach I call the three pillars of Digital Transformation:
- Strategic transformation
- Operational transformation
- People and organisational transformation
When I consult companies embarking on a digital journey, I ask them in the first instance to carefully consider a few strategic questions:
- What existing problems will the new technology solve?
- How will our current business model be affected by technology?
- Will our value proposition have to adapt?
- How will our business activities, resources and partners be affected?
- What organisational capabilities are required to address these future challenges?
- How will our organisation engage with our current and future customers and stakeholders?
- How would current standard operating procedures have to change?
- What type of tech investments will we need to make?
- How has technology disrupted our industry and what threats does it pose to our existing systems?
- Are we aware of the complex nature of the journey ahead?
I find, in most cases, their answers are not particularly well articulated and while it is impossible to have crystal clarity on such a complex journey ahead, my advice would be for companies to really pay attention to these questions at this stage and to truly consider the implications of digital transformation on their current business model.
Digital transformation progress is not a straight line, but a journey of fast constant experimentation driven by trial and error, and developed in tight collaboration with the operational and cultural pillars.
This article was originally published on Business Chief APAC, a ‘Digital Community’ that connects the world’s largest brands and their most senior executives with the latest trends pivoting towards technology and digital transformation.
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