“Why do most Digital Transformation projects fail?” It’s a common question that arises when business leaders hear the statistics: 7 in 10 Digital Transformation projects are ultimately considered failures, whether it’s in terms of ROI, user adoption or overall profitability.
So why is it that just 30% of Digital Transformation projects succeed? And how can you avoid the pitfalls leading down the path to DT failure?
Kodak as a Digital Transformation Failure Example Involving Late Deployment
Kodak is a rather sad example of Digital Transformation failure because the brand maintained icon status within the film photography industry for so long. But Kodak failed to embrace the movement toward digital photography in time. Their market share plummeted over a span of several years when they ought to have been engaging film-turned-digital photography enthusiasts with new, innovative Digital Transformation development projects.
By the time Kodak finally got on board with the digital photography movement, it was too late and they filed bankruptcy in 2012. Kodak has turned into a case study and unfortunate example of what happens when your Digital Transformation deployment is all wrong in terms of timing.
The GE Digital Transformation Failure Example Involving AI and Bad Machine Learning Models
The GE Digital Transformation Failure Example Involving AI and Bad Machine Learning ModelsKodak isn’t the only iconic company to see a major Digital Transformation fail. GE also saw a significant DT failure; one that has served as a great case study.
GE did many things right by hiring skilled Digital Transformation developers and investing a significant sum of money into their new technology. Formed in 2015, GE Digital was designed to centralize the company’s digital initiatives. GE Digital endeavored to become one of the world’s top ten software companies by 2020. But GE spread their resources too thin and the jump to cloud technology was the initiative’s final nail in the coffin. Postmortem analysis has attributed the GE Digital Transformation failure to a number of factors, including the following.
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- Lack of clarity on the true definition of Digital Transformation.
- Lack of buy-in from GE management.
- Lack of phased development. Instead, GE tried to do it all at once.
- Lack of quantifiable KPIs to evaluate success — or lack thereof — over the course of the Digital Transformation initiative.
- Lack of a management team to support the new GE initiative.
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Microsoft as a Digital Transformation Failure Example Involving AI and Bad Machine Learning Models
Microsoft is a relatively recent example of Digital Transformation failure involving one of the trendiest new technologies: artificial intelligence or AI. It has been widely reported that Microsoft fired hundreds of editors — some say they laid off their entire editorial team — which were subsequently replaced by artificial intelligence to manage the company’s news articles on popular browser homepage sites such as MSN.
AI populated the Microsoft news sites with fake news, some of which was downright insulting. One obituary called a former basketball player “useless.” Other stories were all-out fabrications, such as an article that claimed President Joe Biden fell asleep at an event that never occurred. These Microsoft AI editorial fails highlight the need for an in-depth AI model development and ongoing monitoring, lest you find yourself facing a major Digital Transformation risk management issue.
Common Causes of Failed Digital Transformation Projects
Good Digital Transformation risk management is the key to maximizing your chances of long term success and a healthy ROI that remains stable or grows over time. But it’s far easier — and more conducive to a robust ROI — to begin your project with a full understanding of the most common causes of Digital Transformation failure.
Lack of a Well-Developed Project Scope
A successful Digital Transformation project requires a well-defined scope, with detailed specs for all aspects of the development project. The solution comes in the form of a detailed Business Requirements Document (BRD) and / or Software Requirements Document (SRD).
Scope Creep Leading to Unexpected Project Costs
Some Digital Transformation projects fail because they’re never finished as a result of scope creep and poor project planning. This too can be avoided through the development of a well-considered BRD and / or SRD at the very start of the project. Some DT projects can also benefit from a phased development strategy that aligns with both the organization’s budget and the users’ needs or expectations for the technology.
Lack of Well-Defined Digital Transformation KPIs
All too often, a project lacks well-defined key performance indicators or KPIs. In these cases, it’s virtually impossible to accurately measure success. This is true whether it’s through Digital Transformation project ROI, user adoption rates, or improvements in terms of efficiency, productivity and overall performance.
It is possible to backpedal a bit by developing Digital Transformation KPIs well after a project’s deployment, although this is never as effective as coming into the project with a well-developed set of KPIs in-hand.
Lack of User Adoption Due to Poor Training and / or Engagement
Poor user adoption rates can spell failure for even the most well-developed Digital Transformation project. A lack of user training can result in a situation whereby an organization’s new technology simply isn’t used to its full potential. This underscores the importance of an employee training program or tutorials for public-facing platforms.
Scope also plays a role. Don’t try to be all things to all people. Instead of developing a mobile app with dozens of features, functions and tools, develop a mobile application with more narrow, precise capabilities that cater to a very precise type of user with a precise objective in mind.
Lessons Learned From Digital Transformation Failure Examples… And How to Succeed
At 7T, we’ve developed an eBook that outlines the most common causes of Digital Transformation failure and how these issues can be avoided. What’s more, we’ve earned a reputation as one of the top Dallas Digital Transformation companies, with a Digital Transformation development process that maximizes your chances of success with a problem → solution approach. We’ve found that this works whether it’s a machine learning-powered artificial intelligence development project, business process automations, mobile app development or another form of Digital Transformation. It all begins with a well-thought-out Digital Transformation strategy and a business requirements document that outlines the specs for your project, the user needs and the problems that you’re trying to solve through the implementation and deployment of new technologies.
The Digital Transformation development team here at 7T is guided by the approach of “Digital Transformation Driven by Business Strategy.” As such, the 7T development team works with company leaders who are seeking to solve problems and drive ROI through Digital Transformation and innovative business solutions such as multimodal machine learning-powered AI implementations.
7T has offices in Dallas, Houston and Austin, but our clientele spans the globe. If you’re ready to learn more about AI development solutions and other Digital Transformation technologies, contact 7T today.
