What Causes Digital Transformation Failure? The Little Things.

Written By: Eric Kimberling
Date: December 24, 2018

When we read about recent digital transformation failures such as those at Lidl and National Grid, it may seem like these disasters happened overnight. But what exactly causes digital transformation failure?

One of our guest contributors (Sam Graham) recently wrote a piece about how to avoid ERP failure. It’s an excellent article that is worth expanding on. The short answer is: little things cause digital transformation failure.

If there’s one thing I’ve learned as an ERP expert witness, it is that disasters percolate over time. One bad decision will snowball into many more poor decisions. It’s more like death by 1,000 paper cuts rather than a milestone event.

Here are some of the common little – but not so little – things that often cause digital transformation failure:

You aren’t really ready to start your implementation

You may be riding high on excitement after choosing your preferred ERP vendor, but don’t be blinded by that optimism. You had better be ready to go – and go fast – once the army of ERP consultants arrives at your site. Their meter starts running on day one, so be sure you have your ducks in a row prior to moving forward. This is why the ERP implementation readiness phase of the project is arguably more important than the actual implementation itself.

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You can’t change your culture and operations fast enough

Too many companies fail to realize how big of an impact technology will have on their culture and operations. It’s a lot easier and faster to change your technology than to change your culture and business processes, so these are the workstreams that will be on the critical path of your transformation. The technology is a lot less likely to create delays and cost overruns than your people and process changes are. Make sure you invest

People have trouble adopting the new processes and technology

I often hear CIOs say that “people are dying for a new system, so change management isn’t a problem.” But, as I pointed out in my blog about how most organizations underestimate organizational change management in digital transformations, change will almost certainly be harder than you think. People like change and improvements in theory, but not necessarily when they have to change themselves once they understand the details of what change actually means. You heard it here first: change management will be the #1 key to your digital transformation success.

Digital transformation technology isn’t what you thought it would be

Technology historically hasn’t been a primary cause of failure, but that is changing in recent years. Now that cloud ERP has reached the tipping point of adoption and digital transformation failures are on the rise, technology is becoming an increasingly difficult problem. New cloud solutions aren’t as mature as their on-premise predecessors, so it is important to fully vet, understand, and test the technology before you deploy it.

Your system integrator has too much control over the transformation

I began my career with one of the big system integrators, so I understand the machine well. System integrators such as Deloitte, Accenture, and Capgemini tend to overwhelm their client teams with their small armies of consultants – effectively gaining control of the project. It is important to have a clear project governance structure in place prior to engaging your system integrator, and most importantly, to remember that you are in charge of your transformation – not your system integrator.

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Taking control of your digital transformation

Knowing you have control over your transformation’s success or failure can be empowering, but at the same time risky. You probably don’t manage these types of projects every day, so it is tempting to outsource to an expert.

Remember that most ERP consultants have a vested interest in selling software and driving up huge consulting bills, but they are not necessarily invested in your success. This is where an independent, third-party consultant such as the team at Third Stage Consulting can help. We are advocates for our clients’ success to help manage time, cost, risk and ROI. Make sure you invest heavily in organizational change management as part of your overall transformation.

Eric Kimberling
Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.
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