11 reasons why technology transformation projects fail. And what to do about it.

I am a big fan of technology as I do believe it can make our lives and businesses more effective and productive.

However, I have been thinking a lot about the impact of technology on organizations. In fact, if we look at the data, the success rate of technology transformation projects is very low.

See what experts say about it:

“By 2021, spending is predicted to surpass $2.1 trillion. Despite such hefty investment, 70% of digital transformation projects fail, mostly due to the challenges in managing the complexities of such large-scale and impactful projects.” – Alibaba, 2019

“Years of research on transformations has shown that the success rate for these efforts is consistently low: less than 30% succeed (in 2016, it was 20%). This year’s results suggest that digital transformations are even more difficult. Only 16 percent of respondents say their organizations’ digital transformations have successfully improved performance and also equipped them to sustain changes in the long term. An additional 7 percent say that performance improved but that those improvements were not sustained” – McKinsey Survey, 2018

This led me to a question that I discussed with other like-minded professionals and industry experts a few weeks ago on Clubhouse….

“Is technology helping or hurting the business given these data?”

Collectively, we came up with 11 key reasons why technology transformation projects fail:

1) Lack of strong vision and poorly communicated
2) Inability to fight resistance
3) Culture and mindsets not ready to embrace changes
4) Lack of sense of urgency
5) Outdated technology
6) Poor project management, processes and models
7) Inadequate skills
8) Unrealistic timing
9) Deployment complexity
10) Wrong choice (leaders fall in love with a technology they like as well)
11) Lack of go-to-market strategy

Once you know why things go south, you are in a better place to find a solution.

However, this is not a quick fix. It requires different leadership approaches and styles, systems, new norms and behaviours.

If you look at your company, do you believe that your organization is ready to address these issues?

If you’re not sure, here’s a quick assessment:

  • Is the top management directly involved and committed during these projects or they “leave the table” after the kick-off?
  • Is there a steering committee that has designed the vision, communicate it internally and pushed the organization to move forward with the project?
  • Has the leadership team identified, anticipated and fought internal resistance to make sure these projects get implemented?
  • Has the project leadership team identified some early wins (especially for complex/long projects) to keep the momentum and promote enthusiasm?
  • Are employees rewarded for their hard work to get the projects executed?
  • Has the leadership team designed organization structural changes and new systems to allow changes to stick?

And finally, the most critical question…

  • Does the company culture allow or prevent innovation from happening?

Sukant Ratnakar said something very profound:

“Innovation is the outcome of a habit, not a random act.”

As the company culture is the result of habits that are promoted and reinforced in the organization, it becomes clear now how critical is the culture to fully embrace technology and innovation.

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