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Why most Digital Transformation Projects Fail (Part 2)

Posted by Rick Yvanovich on

In the previous blog, we have discovered the first two common traits of digital winners. Today we are discussing the remaining two best practices for Digital Transformation.

The idea of Digital Transformation can be overwhelming and the implementation can be very costly. How can the CEO make sure the digital initiatives soon get traction and do not lose momentum over time?

What Digital Winners Do Differently

What Digital Winners Do Differently

Gaining traction with a lighthouse project

Rather than embark on an all-in, high-stakes digitalisation project, companies should aim for quick wins with a lighthouse project that can quickly yield payoffs in order to secure support from key stakeholders and maximize the overall transformation’s prospects for success.

When Hargreaves Lansdown, a FTSE 100 financial service firm, started their Digital Transformation journey in 2008, they were overwhelmed by the sheer volume of data. The website alone has more than 100 million visits a year. “We took a breath and decided to start small instead,” Chris Worle, the firms; Digital Strategy Director, said. For instance, instead of focusing on the entire website, they focused on high-volume web pages first for quick wins.

Read more: Data Analytics for Manufacturing: the Tesla’s Case Study

For their first digital initiatives, to which areas should companies direct their effort in order to achieve biggest impacts? McKinsey’s five dimensions of digitalisation could provide companies with a framework to better decide where to make their digital investments.

Why most Digital Transformation Projects Fail

Knowing Where and How to Invest


According to McKinsey’s 2016 digital survey, Digital Transformation consists of 5 dimensions with different levels of digitalisation:

  • Marketing and Distribution
  • Product and Services
  • Processes
  • Ecosystems
  • Supply Chains

While up to 49 per cent of respondents said their companies are investing on the Marketing and Distribution dimension, the numbers for other dimensions are much lower:

  • Product and Services: 21 per cent
  • Processes: 14 per cent
  • Ecosystems: 13 per cent
  • Supply Chains: 2 per cent

This finding should not come as a surprise as the Digital Age has been empowering a new generation of customers with unprecedented capabilities and ever-evolving behaviours and expectations. Companies, therefore, have to completely revamp their customer experience (CX) in order to stay relevant.

Read more: Luxury shoppers expect omnichannel experiences

Customer experience is also cited as the number one focus in the Altimeter’s 2016 State of Digital Transformation report, with 55 per cent of respondents said customer behaviours and preferences are their primary driver of Digital Transformation.

Customer experience is again among the top 3 key drivers for digitally mature businesses according to the Forrester’s 2016 Leading Digital Business Transformation report.

This does not necessarily mean you have to start your digitalisation journey with a customer-facing initiative. As McKinsey has noted, companies could probably be overlooking other dimensions of digitalisation, such as supply chains, that can yield significant savings and profits.

Furthermore, McKinsey’s findings also indicate leading companies in digitalisation tend to invest more than the laggards across all dimensions.

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 Rick Yvanovich
 /Founder & CEO/

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