The Two Big Reason That Digital Transformations Fail

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Why do digital-transformation efforts fail at so many companies?  A timely assessment from the Harvard Business Review tackles this thorny problem.

Plenty of cash is flowing into digital initiatives at large, industrial companies.  The executives Accenture surveyed recently at 1,350 of these businesses globally reported investments in digital reinvention totaling more than $100 billion between 2016 and 2018.

The problem is that the expected results often fail to materialize. Most of the leaders Accenture surveyed in companies representing 17 countries and 13 industries reported poor returns on their digital investments. As Mike Sutcliff, Raghav Narsalay, & Aarohi Sen of Accenture Consulting explain in the September October 2019 Harvard Business Review; the primary reason is unsuccessful efforts to scale digital innovations beyond early pilot work.

Consider one sportswear brand that bet big on customization.  This company spent heavily on robotics, machine learning, and 3D printing at a new manufacturing plant.  It wanted to give customers the option of ordering personalized athletic shoes and getting them fast.  Leadership hoped for a win that would fuel transformation across its other manufacturing locations. But operations and new technologies never meshed, and rapid production proved to be illusory.  After three years, the company shut down the facility.

What’s keeping companies from scaling pilots successfully?  And what are the companies that are experiencing better returns on digital investments doing differently than the rest?  To answer these questions, the authors asked the executives in the study to tell them in detail about their returns on digital investment (or RODI).  Then, the authors looked at how well companies across the sample had scaled projects from the proof-of-concept stage.  When the authors mapped those two critical parameters—higher-than-average returns and more successful scaling—they saw that 22 percent of the sample had demonstrated both.

The authors then dove deeper into that group to learn what they did differently. They focused on what survey respondents overall had identified as their top challenges and how companies in the leader group had dealt with...

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