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The 5 Risks of Digital Transformation

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Digital transformation is a long journey. You must be very patient and persistent. Given today’s circumstances, these qualities are not always easy to maintain. We have identified the 5 main risks why most digital transformation projects either fail to progress, fall short of 
executive expectations, or burn out completely. 

1. The Risk of Ignoring the Inevitable 

First and foremost, companies and their executives must truly understand what digital transformation really is. We’re not talking about regular IT initiatives or automation projects. If you look around, the whole world is changing. Software is eating the world. The global business industry is becoming more and more focused on digital transformation. The consumer clicks a button on a mobile app and, seemingly like magic, their wish is granted. From media to retail, from music to banking, from food to healthcare, “there is an app for that.” 

Digital transformation is much broader than CRM or Analytics. While these elements are important, true transformation requires a shift in mindset, a shift in business model, integration of new channels, creating new experiences for your customers, and implementing end-to-end, integrated supply chains. To do this, you must have a common vision within your enterprise and organise around it. Once you realize the potential of true transformation create a roadmap forward, you will enjoy the benefits of the journey.  

2. The Risk of Losing Your Focus 

Digital transformation is a huge buzzword these days. It’s everywhere and everybody is talking about it. Technology providers promise you heaven on earth. Consultants seem to have the best strategies and approaches to digital success. However, with the phenomenon of digital transformation there is not yet a universal definition nor any sort of industry standard we can rely on. We understand that with digital transformation being so important and necessary, the resulting lack of direction drives you crazy…  

So, here we are, lost in the digital woods, full of opportunities, threats, and exciting potential. Following just a single partner’s advice will direct you to one goal. Following another’s advice will pull you in a different direction. A constant push and pull.  

You must get in the driver seat.  

If you do not have universal agreement (at the very least, within your company) on your vision and objectives, you will never be able to make the right decisions regarding your digital transformation.  

3. The Risk of Wrongful Investment 

Digital transformation will require many investments. You must spend on technology, the required talent, cultural transformation, new business model experimentation, and new customer experiences. The teachings of the 20th century brought us examples of tangible benefits, measurable results, and the financial gains of investing in digital transformation.  

Some digital transformation projects may have a delayed pay-off, but those initiatives that may seem like a waste of time will bear fruit in other areas of digital capability. Patience is a virtue. You cannot wait around, never investing, because when the fruit starts to grow for your competitors, you will regret your inaction. So, when will the timing be right? A truly difficult question. Traceability is a great example of the digital fruit that comes from proper investment and patience. Without first gathering a vast amount of data, you can never know what good it can do. From a digital maturity perspective, underinvesting will leave you trailing behind. Over-investing may sacrifice profitability and business sustainability. You must have clear priorities and stick to your roadmap. Easier said than done, but that’s where your effective leadership will come into play.  

4. The Risk of A “Tangibles, Only” Mindset 

Global life is swiftly fluctuating in the information age. With the increased attention on and perceived value of knowledge economy and a digital society, the most valuable companies on the planet are no longer the oil giants, banks, or retail chains, but rather the tech giants. Why, you ask? They have billions of users visiting their apps multiple times a day, and each user leaves behind an information trail. What is the value of all that data? It is so valuable that they can offer their core product and services for free. That is true power.   

You should look beyond tangible benefits and recognize the benefit of intangibles. When it comes to your digital transformation journey, you will not always be able to put your success into numbers. A few of these intangible benefits include becoming the employer of choice, attracting the best and most relevant talent, building up underlying digital capabilities for later success, and establishing contemporary channels to capture the habits of your customers. 

5. The Risk of Losing Executive Support  

Digital transformation is a team sport, requiring strong executive support. Executives can become rapidly disappointed, especially when company operations do not go well. Therefore, you must ensure that your digital transformation goes well, stays on track, and delivers tangible benefits along the way.  

Achieving “quick-wins” and creating successful agile projects are easier said than done. Digital transformation requires huge investments and takes time. Cultural transformation and adoption could take even longer. This is a reality. Open and honest communication is an absolute necessity. Slowly, yet surely, openly communicating the status and progress of your transformation to the organisation will demonstrate its value. Solid program and change management will help you ensure transformation success.  

Risk is inevitable and unpredictable, but these are of the most common and the most dangerous. The good news is there is help in gauging your current digital maturity, and in creating a roadmap to success.  

It is helpful to think of your organisation and the digital transformation it requires as an evolving, growing, maturing tree. You need to nurture, support, maintain consistency, provide protection for it to grow. Failure is not an option. After all, the future is digital. There is no other way ahead.

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This article is a part of our monthly Digitopia Digest:
Digitopia Digest is a monthly newsletter showcasing the latest news in digital transformation. If you are determined to discover what to do next in your organization to achieve digital success or are simply interested in digital technology and innovation, please subscribe for updates.


Digitopia Digest is a monthly newsletter showcasing the latest news in digital transformation. If you are determined to discover what to do next in your organization to achieve digital success or are simply interested in digital technology and innovation, please subscribe for updates.

Author avatar
Halil Aksu
https://digitopia.co