Digital transformations are failing at an alarming rate – why?

Web Images 16 Digital transformations always have a lot to live up to. The executives responsible for leading these projects must first convince their boards of the benefits, so they’re likely to fixate on the best-case scenarios that IT providers and consultants optimistically provide. Their clarion call is that going digital will create new revenue streams, improve productivity and reduce costs. But the results often aren’t quite so impressive. A McKinsey & Co study covering 600-plus firms that had recently undergone digital transformations in 2022 quantified the gap between expectation and reality – and found it to be wider than many might have suspected. Only 20% of the companies achieved more than three-quarters of the revenue gains they had anticipated before embarking on their projects, while only 17% achieved more than three-quarters of the cost savings they’d hoped for. Why are so many digital transformations falling far short of expectations? Experts put it down to basic flaws in how businesses research, commission and implement such projects. For Ruben Schaubroeck, a senior partner at McKinsey, the fundamental problem is that many firms don’t understand how to embed a transformation across the whole organisation. “A lot of businesses simply aren’t structurally […]

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