What You Can Learn From Digital Transformation Failures
Digital Marketing
Nov 06
Going digital is nothing new, but despite that, many companies don’t survive the transition from outdated systems and processes to the more advanced technologies they can work with now in 2024. Why do approximately 70% of digital transformations fail, though, and what can companies do to avoid failing at a pivotal time for their company?
Understanding Digital Transformations
Before going into why digital transformations fail, it’s important to understand exactly what a digital transformation is for a company.
A digital transformation can mean anything from taking a company digital for the first time to upgrading all systems to ensure all areas of business are handled with digital processes. Where your business is on the digital transformation journey depends on how much technology you already use and how willing your team is to continue pushing the limits.
For a true transformation (not just the addition of a single digital element or process), businesses may spend many years preparing. They need a set-up period to build a culture around innovation and thought leadership, experimentation, and adaptability.
Once that’s in place, new technology is added (slowly!) and training and adjustments can finally occur. In the end, the goal is to have a company that handles all its processes digitally, from data optimization to enhancing the customer service experience.
Examples of Digital Transformation Failures
Since so many companies’ digital transformations fail, it’s easy to find examples of what has gone wrong. Three examples of digital transformation failures include:
Ford’s attempt at going digital in 2016. The company attempted to shift away from being an automobile manufacturer to one providing mobility services. It tried a few options, such as ride-sharing and autonomous vehicles, but the moves it wanted to make were premature. In the end, it failed not only because the execution of its new services was poor, but also because it needed to go through an operational overhaul that just didn’t happen.
What can you learn from Ford’s failure? Ensure your digital transformation is founded on a clear business model and that you have strategies in place to tackle any pushback against new changes.
Sears’s revitalization attempts via digital commerce. The retailer wanted to reinvent itself by going digital, but it waited too long to do so. It lagged behind other retailers and it found itself unable to keep pace with other giants in the space, such as Walmart and Amazon.
What can you learn from Sears’s failure? You need to have a broad strategy before launching into a digital campaign. However, avoid waiting too long, or it could be hard to keep up with the competition.
Kodak’s lackluster transformation into the digital space. Kodak was once known as a giant in the photography industry, but it didn’t grasp the impact digital photography would have on the industry until it was far too late. What’s even more shocking about this digital transformation failure is that Kodak invented the first digital camera.
Unfortunately, despite being a pioneer of the new technology, it hesitated to invest more in digital because it was focused on protecting its older products and services, particularly in film. It lost its market share to competitors who adapted to the digital photography trend faster than it did, leading to it losing its edge and, at one point, going into bankruptcy.
What can you learn from Kodak’s failure? You can be a leader and still fail. Don’t place too much emphasis on tradition when you have opportunities for innovation.
Tips for Surviving the Digital Transformation Journey
Looking at the major names that have failed at times in their digital transformation journeys, you’re probably wondering what you can do to protect your own business and get yourself set up for success. There are three things you’ll want to do.
Think about where you are and where you want to go. Having a vision for your company, as well as a roadmap on how to get there, will help you stay on track. Consider charting out the steps for the transformation, the timeline you have in mind, and any resources you’ll need to use along the way.
Get people involved. A digital transformation is a company-wide process. You need cross-functional collaboration to make sure all digital strategies align across the organization, not just in one department. Additionally, when you keep employees engaged, they’re more likely to stay excited about the changes to the company (and will continue helping implement them). Ask for feedback, and be flexible when it’s necessary.
Pair up with a digital transformation partner. Digital transformation isn’t always a straightforward process, and there are plenty of moving parts to keep aligned. Choosing an organization that has a track record of helping businesses through digital transformations can be an excellent way to help your own company stay on track and survive the journey.
Today’s digital revolution has changed the way businesses have to work to survive. Going digital is no longer an option but instead a necessity. A digital transformation helps your company be more efficient, enhance productivity, and even ensure sustainability — all reasons to learn from others’ errors and get started on your own digital journey now.
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