Achieving a Successful Digital Transformation Today

Digital transformation is no longer optional. With 88% of CIOs reporting a shift toward digital innovation, the pressure to modernize is mounting across industries. Yet despite this momentum, nearly 70% of digital transformations fail – often due to misaligned digital strategies, underdeveloped capabilities, and overlooked cultural factors. In many cases, the impact of these failures goes beyond unmet business goals, leaving organizations to account for significant wasted resources and in some cases very costly operational disruptions.

Why Urgency Continues to Grow

Organizations face mounting internal and external pressures to transform.

Internally, lean teams need real-time analytics and data to make informed decisions, but legacy systems often block access and introduce security vulnerabilities. The convergence of enterprise networks, edge computing, and Internet of Things (IoT) has intensified end-user demands on IT while also adding complexities that outdated infrastructure and applications cannot manage.

Externally, cloud computing migrations, evolving compliance requirements, and competitive pressures are equally forcing enterprises to modernize. The shrinking pool of professionals with legacy system expertise, combined with the fact that outdated digital technology often deters the forward-thinking innovators needed to drive digital transformation, only adds to the urgency.

Why Digital Transformations Often Fail

The importance of digital transformation stands in stark contrast to the high failure rates among enterprises today. While each effort is unique, several missteps frequently contribute to failed efforts:

• Starting with the wrong questions: Often, organizations begin by asking what solutions to use and how much they cost, but success begins with clarity about why, who and how success will be measured.
• Technology-driven rather than value-driven: Rushing to adopt data analytics, automation, or artificial intelligence (AI) solutions without a clear business use-case leads to missed or underserved requirements, poor adoption, and wasted investment. Digital technology should serve a defined business purpose – not to be implemented for its own sake.
• Weak data governance: Legacy systems often contain fragmented, inconsistent data. Without proper governance, outputs from new systems are unreliable, undermining the transformation’s value.
• Overambitious scope: Trying to “boil the ocean” with large-scale initiatives often leads to failure. Focused pilots and proof-of-concept efforts build momentum and buy-in.
• Insufficient support: IT teams need executive sponsorship, resources, and time to succeed. Without this, both technical execution and cultural change management suffer.
• Overlooking existing workloads and technical debt: Digital transformation demands dedicated time and focus – expecting teams to lead change while managing full-time operational responsibilities is unrealistic, especially when the very systems they’re tasked with transforming are consuming disproportionate time and resources.

Building a Strong Approach for a Successful Execution of Digital Transformation

Successful digital transformations are built on a foundation of aligned people, business processes, and technologies. Whether led internally or supported by a third-party partner, transformation teams should include expertise across seven key areas:

1. Industry Knowledge: Understanding compliance frameworks and operational nuances is essential for tailoring solutions and effectively leading change.
2. Technology Architecture: Teams must assess the compute, networking, and storage needs while ensuring security and scalability.
3. Data Strategy: Effective governance, protection, and integration of data are critical to unlocking value.
4. Innovation Literacy: In fast-moving areas like AI and machine learning, teams need the ability to separate hype from reality and evaluate solutions based on actual capabilities.
5. Organizational and Cultural Change Management: Adoption depends on user buy-in. Cultural shifts must be actively managed to ensure new systems are embraced.
6. Execution and Project Management: Dedicated project management resources are required to manage timelines, coordinate stakeholders, and maintain momentum.
7. Organize your “Purple Team”: Perhaps the biggest differentiator between those who succeed and those who fail at digital transformation is having resources that can translate between technical capabilities and business needs.

To build on our last point, success often hinges on finding experts – both internal team members and external consultants – who can bridge the gap between IT and the other stakeholders, such as operations, finance, HR, and accounting. Imagine a “red team” representing IT and a “blue team” representing stakeholders. Building a “purple team” of advisors and professionals to be connectors and translators is critical. This “purple team” helps organizations avoid the trap of simply accelerating outdated workflows. Instead, they identify opportunities to reimagine business models and how work gets done, while also designing a roadmap and execution plan to complete the journey.

By focusing on the seven success factors above and starting with a clear, business-driven vision and business strategy, you can approach your digital transformation strategy with confidence.