Why Digital Transformations Fail and How to Avoid the Most Common Pitfalls

Neal Silverman

In a post-COVID world, digital transformation is a higher priority than ever for leaders of large enterprises. According to the Boston Consulting Group, the pandemic has caused over 80% of companies to accelerate their digital transformation efforts. But what was true before COVID is still true today: about “70% of digital transformations fall short of their objectives.”  

Why is this happening when so many vendors, analysts, and consultants consistently describe the impact of digital transformation on business growth in positive, glowing terms?  The answer is complex, and is often unique to each individual company attempting to transform itself. However, based on our work with Fortune 500 clients, we see three general obstacles to avoid.

3 Common Obstacles to Successful Digital Transformation   

  •  Lack of urgency in recognizing that digitization is a bet-your-business strategy. Some businesses fail to recognize that digital transformation is no longer just an option. It is now a matter of business survival. Your biggest competitive threat might not even be coming from within your own industry. Think about companies like Amazon and Tesla. These are “digital first” companies that now dominate the retail and auto industries. The market cap of Amazon now nearly exceeds the entire rest of the U.S. retail industry. Similarly, the market cap of Tesla overwhelms all other automakers combined. Just last week, GM literally threw in the towel and announced it will be going all-electric by 2035. Don’t be like GM. Get ahead of new technologies before the market forces you to adopt them on its terms. It's all about adopting new digital technologies that enable your organization to serve customers in the way that they expect to be served.


  • Use of traditional approaches to solve non-traditional problems. Digital transformation is a relatively new phenomenon for many companies, and, when it comes to executing digitization projects, no instruction manual exists on implementation. Oftentimes, strategy teams within Fortune 500 organizations will just ask IT teams, the CIO, or the Chief Digital Officer to “make it happen” without any real guidance, assistance, or collaboration.  Ideally, the decision on which emerging technologies to select should involve inputs from groups of stakeholders across the organization.  Line of business leaders and IT leaders should work jointly to understand how best to discover, evaluate, and implement new digital technologies.


  • A focus on internal rather than external benefits. Organizations often make the mistake of focusing solely on digitizing their internal operations, rather than on prioritizing how these moves will impact their end customers.  For example, why not share those internal supply chain data analytics with customers so that your organization can help speed up their commerce? How do emerging technology investments provide customers with benefits that they weren’t experiencing before? Again, it should all be about improving the customer’s experience, and not just about reducing internal costs.

Speeding Up the Transition Process

The best way to avoid these obstacles is to speed up the transition process to a digital-first organization. Organizations can set themselves up for success by constantly experimenting with and evaluating new technologies that can impact their business. The more you try new things, the faster you will bring your organization to the promised land. 

This is easier said than done. Companies like to focus on what they are good at (or, more precisely, what they were good at 5 years ago). The bigger the enterprise, the more resistance to change. But change can come up on you all at once, as the past year of dealing with COVID has shown all of us.

Case in point: Nearly every business we work with is expanding their e-commerce business because of COVID. If they don’t have a robust e-commerce engine, they’re building one. If they have one, it has never seen the level of usage that it’s experiencing today.  Websites are at the breaking point because of explosive volumes in traffic. In order to regain the agility that helped to build their business to begin with, they need to quickly modernize in every area.

For More Information

At Traction Technology, we help enterprises of all sizes navigate these rocky digital transformation waters. For instance, our software enables clients to reduce the risk of failure by simplifying and validating the search for those emerging technologies that will truly allow them to reinvent their business.  It allows stakeholders across the business to collaborate on emerging technology projects and initiatives, and to quickly discover and evaluate the technologies that can make a difference to their business. As time goes on, and as more projects are logged on the platform, the decision engine built into the software helps the stakeholders to make much faster, lower risk decisions surrounding their emerging technology selections. The result is better and faster decisions about which new technologies to adopt across the enterprise.

To learn more about how your organization can cash in on innovative emerging market digital technologies, visit our website or register to schedule a demonstration.

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