There is a good argument to be made that digital transformation is so prone to failure that a safer strategy is avoid "big" goals and instead concentrate on numerous "smaller" goals, even when the outcomes from many smaller projects do not necessarily transform firm earnings or profits in any directly-measurable way.
By definition, failure on a small project does not jeopardize firm survival.
By some estimates digital transformation spending will top $6.8 trillion by 2023. But those investments are “often made without seeing clear benefits or ROI,” says Tomas Chamorro-Premuzic, chief innovation officer at ManpowerGroup, a professor of business psychology at University College London and at Columbia University,
Some argue digital transformation failure rates are 70 percent to perhaps 80 percent or more. To be sure, that failure rate includes projects that fail to reach their objectives, but might arguably have some benefits. Still, some argue 73 percent of such projects fail to provide any business value at all.
While that might seem outlandish, it is well within the parameters of failure rates for less-complex projects such as information technology initiatives, which also fail at about those rates.
And digital transformation is nothing if not hugely more complex. In fact, it might be so complicated that no single technology change, in any one part of the business, actually captures the magnitude of necessary changes.
While 85 percent of CEOs accelerated digital initiatives during the pandemic, most can’t articulate their overall strategy and progress beyond that they made a tech investment,” say consultants at Deloitte.
“If CEOs can’t say their digital transformation resulted in new business advantages or adaptability, then they haven’t really transformed,” Deloitte consultants note.
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