Why 70% of Digital Transformation Projects Fail
In a survey reported by the Harvard Business Review, it was uncovered that 70% of digital transformation projects fail. The survey pegged failure as not reaching the project’s goals. Over a trillion dollars are spent each year on digital transformation projects as organizations across regions and industries rush to improve their operations through digitization. There is also a great deal of FOMO at play here. Executives and board of directors are fearful of being left behind by the competition. The history books are clear on what happened to companies like Circuit City, Toys R Us, The Good Guys, and Blockbuster for failure to lead on digital transformation.
On the other hand, a shoe company founded by a college runner turned accountant and his running coach embraced digital transformation and we all know where Nike is today.
CFOs have two critical roles in leading the digital transformation effort at their company. For one, the CFO is the financial steward of the organization and plays a role in approving funds for projects. It is important that the CFO participate in crafting strategy and managing risk when it comes to digital transformation projects. On a more granular level, the CFO must also manage data transformation projects within their own department. Many data transformation projects are focused on improving the back office managed by the CFO.
In addition to reporting on this survey, the Harvard Business Review provided five key lessons to help organizations succeed.
Here are the five lessons:
- Figure out your business strategy before you invest in anything
- Leverage insiders
- Design customer experience from the outside in
- Recognize employee’s fear of being replaced
- Bring Silicon Valley start-up culture inside
We will add a 6th lesson from our experience in supporting CFOs efforts to modernize.
6. Select and partner with an experienced Professional Services group able to perform an assessment prior to investing big dollars into these projects
RVNA Tech offers CFO Technology advisory services which will identify gaps and opportunities and will support in crafting your digital transformation strategy and phases.