{"id":9894,"date":"2020-09-29T08:31:09","date_gmt":"2020-09-29T08:31:09","guid":{"rendered":"https:\/\/www.experfy.com\/blog\/?p=9894"},"modified":"2023-10-26T13:18:31","modified_gmt":"2023-10-26T13:18:31","slug":"why-70-percent-of-digital-transformations-fail","status":"publish","type":"post","link":"https:\/\/www.experfy.com\/blog\/ai-ml\/why-70-percent-of-digital-transformations-fail\/","title":{"rendered":"Why 70 Percent of Digital Transformations Fail"},"content":{"rendered":"\t\t
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\n\t\t\t\t\t\t\t\t\t\u201cCompanies either transform or die in industrial revolutions,\u201d writes former P&G executive\u00a0Tony Saldanha<\/a>\u00a0in his recently published book\u00a0Why Digital Transformations Fail<\/a>.\u00a0\u00a0\u201cDigital transformation is our current generation\u2019s attempt to transform in the face of the Fourth Industrial Revolution.\u00a0\u00a0However, the sad truth is that 70 percent of all digital transformations still fail today\u2026 a shocking number, given the extremely high stakes,\u201d he adds.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tWhat accounts for such a high failure rate?\u00a0\u00a0An inadequate strategy; competitive pressures; technology; talent; culture?\u00a0While all these factors are important, \u201cThe surprising answer to why digital transformations fail is a lack of discipline in defining\u00a0and\u00a0<\/em>executing the right steps for digital transformations to take off and stay ahead,\u201d notes Saldanha, adding that \u201cIt is possible to apply the proven checklist methodology from the airline and medical fields to improve the 70 percent failure rate.\u201d\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tIn a 2015\u00a0article<\/a>,\u00a0Klaus Schwab<\/a>, – founder and executive chairman of the\u00a0World Economic Forum<\/a>, –\u00a0positioned<\/a>\u00a0the\u00a0Fourth Industrial Revolution<\/a>\u00a0within the historical context of three previous industrial revolutions.\u00a0 The\u00a0First<\/a>, – starting in the late 18th century, – was driven by new innovations like the steam engine and marked the evolution from an agrarian to an industrial economy.\u00a0\u00a0The\u00a0Second<\/a>, – a century later, – was driven by steel, electricity, the internal combustion engine and mass production techniques.\u00a0\u00a0The Third, – starting in the 1960s, – saw the advent of digital computers, IT, the Internet, and the automation of process in just about all industries.\u00a0\u00a0The Fourth, – driven by increasingly pervasive and inexpensive digital technologies, – is now blurring the lines between the digital, physical, and biological worlds, leading to widespread economic and social disruption.<\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Saldanha defines\u00a0digital transformation<\/em>\u00a0as \u201cThe migration of enterprises and societies from the Third to the Fourth Industrial Revolution era.\u00a0\u00a0For companies, this means having digital technology become the backbone of new products and services, new ways of operation, and new business models.\u201d<\/p>\n\n\n\n

To drive home the point that a lack of discipline is the underlying cause of digital transformation failures,\u00a0Saldanha observes that 99.999999% of aircraft takeoffs and landings\u00a0are successful<\/a>\u00a0compared with only 30% of digital transformations.\u00a0\u00a0Clearly, digital transformation efforts involve considerable more judgment than airplane takeoffs and landings.\u00a0\u00a0\u201cOn the other hand,\u2026 A ton of hard work went in over the decades to structure what were judgment-based tasks into simpler routines.\u00a0\u00a0Various technologies were applied to automate many of those tasks.\u00a0\u00a0And what was not automated has been check-listed to deliver predictable execution.\u201d<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The book introduces\u00a0The Five-Stage Digital Transformation Model<\/em>, a rigorous step-by-step road map to help guide companies as they go through their transformation.\u00a0\u00a0Following the airline industry analogy, each stage is accompanied by two specific disciplines to help address potential risks and improve the odds of success.\u00a0\u00a0<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Let me summarize each of the five stages and their associated disciplines.<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Stage 1 - Foundation<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tThis stage provides the digital foundation necessary for future transformation.\u00a0 The firm needs to upgrade its technology to the latest digital platforms, actively automate internal processes, – e.g. selling, manufacturing, finance, – and digitalize its operations.\u00a0\u00a0 Key stage 1 disciplines:<\/p>\n\n\n\n