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GE, Ford and P&G all failed. After the three companies spent a total of more than $1.3 trillion dollars, they have all declared their digital transformation projects failures. 70 percent of large-scale digital transformation projects fail, according to research by McKinsey. And in fact, only 16 percent of businesses say that their efforts at digital transformation have shown any improvement in overall company performance.
How can so many project go wrong? The main culprit is communication. Businesses fail to communicate to their employees their goals, strategy, purpose and outlook for these projects. The appropriate lack of communication set these projects up for trouble from the start.
Nitish Mittal, vice president at Everest Group, said that “a significant proportion of enterprises have not experienced any substantial benefits relative to their digital investments, as their heavy focus on technology disregards the softer aspects of digital transformation. For successful digital transformation, enterprises need to rethink their strategies and adopt a digital operating model that, in addition to being built on a strong foundation of technology and talent, must prioritize governance, culture, and change management.”
The problem is that if businesses can’t successfully transition into digital operations that many of them will not be able to effectively compete. The Everest Group predicts that only 25 percent of today’s $1 billion+-sized companies will be thriving in the next decade because they’re not able to keep up.