Firms urged to get staff on board to avoid DX ‘money pit’

IoT_data_digital2Digital transformation might be seen by many as the panacea for business growth and innovation but it is continuing to be a “money pit” for businesses both in the UK and worldwide, amid claims that nearly three-quarters (70%) of implementations fail to reach their objectives.

And, with IDC forecasting global digital transformation spending will reach $3.4trillion by 2026, that would equate to a whopping $2 trillion will have been wasted.

On the back of these statistics a new report by brand communications business 438 suggests the main reason for this waste is that all too often organisations forget the “people element” in digital transformation.

Of the 70% of enterprises that have failed to create real value from their digital transformation efforts, 62% cited culture as the number one hurdle, according to McKinsey, while 46% of organisations identified resistance to change as a major barrier to success, according to Gartner.

A further study by Prosci found that 47% of digital transformation failures were attributed to employee resistance and a lack of change management, while inadequate sponsorship and support from top leadership is also an issue.

438 director Andy Whitmore said: “One of the most notable roadblocks in achieving digital transformation success is a disconnection between business leaders and employees when it comes to technology adoption. Many companies invest heavily in tech solutions, but they fall short in fostering a culture of tech adoption among their workforce.”

To highlight the point further, 438 details the positive impact investment in employee engagement can have on profitable transformation, citing global giant PepsiCo as an example. 438’s study shows that a people-first approach to introducing new technology can improve the odds of successful digital transformation by almost three times, from 28% percent to 73%.

Whitmore added: “The statistics paint a grim picture, but there is hope. Successful digital transformation projects continue to yield substantial benefits, including increased efficiency, agility, and competitiveness. To mitigate the risk of failure, organisations are increasingly focusing on change management strategies, clearer objectives, and robust communication plans.

“While most organisations focus on the customer experience, the value of giving the same level of attention to the employee experience is gradually being realised. Yes, ironically, it’s the human side of digital transformation that ensures that change is successful, seamless, and sustainable and the anticipated value is truly realised.

“So while technology implementation, operating models and customer-centric initiatives are crucial for building a digitally transformed organisation, more and more evidence shows that it’s the changing beliefs and behaviours – the new ways of working, the new tools being used, and the new habits formed – adopted within the organisation that can make or break transformation.”

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