Despite incredible advancements in technology, digital transformation initiatives are still failing at an alarming rate. They go over budget, drag on for what feels like forever, and get lost in a shuffle between departments, becoming more confusing with each step. Why is this happening? Most organizations simply approach their digital transformation strategy from the wrong angle. To uncover the real reasons behind these failures, you can continue reading our in-depth recap and analysis below.
To truly achieve a successful digital transformation, organizations need to look beyond the hype and market pressures. The worst thing a team can do is invest significant time, money, and energy into an initiative that ends with a resounding "who cares?"
As Bjorklund emphasizes:
"To be transformative, it has to actually change the way you’re doing business."
Think about the impact of mobile ordering apps for fast-food restaurants or the revolutionary shift Netflix brought compared to Blockbuster. Consider how Amazon fundamentally changed our expectations for shipping.
"That was done through digital technology. It transformed our expectations. I never would have thought to ask to get products overnight…but once it became available in one place, now we expect it to be everywhere."
While not every company can create a cultural shift of this magnitude, a great digital transformation strategy asks a critical question: How can we elevate the experience for our customers and positively change their expectations?
Ultimately, customers are at the heart of every successful digital transformation strategy. If you're not actively engaging your customers or end-users, your "transformation" isn't truly meaningful.
Let's dive into the common pitfalls that derail digital transformation initiatives and how you can adapt your business models for success.
From AI-assisted code reviews to advanced integration architectures, digital technology continues to make incredible strides. Yet, despite these massive advances, the failure rate for digital transformation initiatives is actually getting worse.
So, what's the disconnect? If the tools are better, why aren't the outcomes?
According to Bjorklund, a significant part of the problem lies not with the tools themselves, but with the people and processes.
"The technology is improving. People aren’t."
While agile methodologies and APIs have revolutionized how teams write and integrate software, they haven't resolved the deeper challenges of shifting business culture or ensuring strong leadership alignment. As Bjorklund puts it:
"We have gotten a lot better executing code… What hasn’t gotten any better is the planning, preparation, and leadership."
This disconnect often leads to endless requirement changes, a lack of clear vision, and significant project volatility – even as the technical execution improves.
Your digital solutions represent the how. You might clearly understand the limitations of your legacy systems and the modern tools needed. But remember, we're talking about transformation, not just change. Start by fostering a shared understanding among your people. When planning and preparing for a digital transformation, present a clear vision to leadership to build trust. Avoid getting bogged down in the technical "how" and instead focus on the overall picture of the enhanced digital experience.
A successful digital transformation strategy hinges on consistent buy-in and stability from leadership.
"If they aren’t convinced that this technology is actually going to do what they are intending for it, they won’t stand behind it for very long."
Vision clarity and continuity are paramount. Without a well-defined and stable business objective, technology teams are left chasing moving targets. This is a recipe for missed deadlines and half-built solutions.
Remember that digital transformation is, by definition, transformative. This means your entire team, from the top down, must genuinely buy into the change. Often, the initial excitement of the vision fades as leadership gets pulled into other obligations while the crucial backend work begins. Communication breaks down, and concerns are raised at the most inconvenient times.
A robust digital transformation strategy accounts for cultural change, which must originate internally. Help your leadership team foster a culture within your organization that embraces your digital transformation journey. And it truly is a journey! Keep your internal evangelists engaged with regular updates and built-in feedback loops. Empower them to champion the message throughout the organization and demonstrate their unwavering belief in the project.
For a digital transformation to succeed, your business and technology strategies must be seamlessly aligned. This alignment is crucial for supporting realistic deployment timelines and maintaining momentum within the broader company culture.
For tech leaders, a key part of the job is helping the business side understand the inherent complexity and constraints of software delivery. For Bjorklund, this means "managing up" and setting clear expectations upfront.
A quick prototype might look like a nearly finished product to the untrained eye of business leaders, but this perception gap can completely derail timelines and create unrealistic expectations:
"We sometimes don’t do ourselves very good when we build a clickable prototype in a week and a half. [Business leaders] think, geez, you’re 80% there. Let’s get this thing done. And it’s like, no, we’re 2% there."
Development timelines should be clearly laid out with built-in padding to account for inevitable challenges and derailments.
Technology leaders must actively push back against scope creep and unrealistic timelines with clear, concise explanations. The more technology leaders can effectively connect the dots with larger business goals, using language the business side understands, the better. This means keeping the "why" at the forefront. What value will this digital transformation create? How does the proposed roadmap directly support that overarching goal?
Whether it's ensuring critical scalability (more end-users mean more revenue opportunities) or allocating sufficient resources for thorough testing (bugs lead to churn and revenue loss), always keep your audience in mind.
Leadership perception can bring a digital transformation journey to a screeching halt faster than any bug or technical challenge. Set yourself up for success by proactively managing alignment.
While "digital transformation" has become a pervasive buzzword, the underlying demand for it is very real. However, it's not always driven by direct customer requests; often, it's driven by unmet needs and frustrations.
Bjorklund points to the COVID-19 pandemic as a prime example of rapidly changing customer demands. The need for contactless food service, combined with staffing challenges, created significant problems for customers: long wait times, food quality issues, and lack of accessibility. This urgent demand for contactless solutions spurred innovations in digital ordering and delivery, which have since branched out into numerous applications.
Today, mobile ordering apps are standard. Customers weren't explicitly asking for the ability to order ahead. They simply had pains and frustrations that could be solved through digital solutions.
Therefore, the demand for digital innovation isn't simply a given. Organizations need to deeply understand their customers' friction points and pain points. Solving these problems is the key to unlocking new customer behaviors and generating further demand.
New features introduced solely for competitive reasons are more likely to frustrate your customers than empower them, especially if the "transformation" interferes with their existing expectations. Customers want solutions that work, not the latest buzzword. Always consider who your digital transformation is truly serving.
This brings us to perhaps the biggest buzzword in today’s digital transformation initiatives...
Artificial Intelligence (AI) has undeniably changed the game for development speed and scalability. Tools like generative AI are already streamlining tasks such as code reviews and data queries. However, their true utility hinges on a foundational element that many organizations still lack: clean, structured, and reliable data.
"If you actually want to use AI in useful ways, particularly in an ongoing use case, your data is going to need to be standardized. It’s going to need to be clean. It’s going to need to be real."
Bjorklund further describes AI as the "smartest two-year-old in the world." Its understanding is limited by the data it's fed, and its effective application is limited by an organization's understanding of its own processes.
Organizations that wholeheartedly lean on AI without first considering this foundational data work can undermine their digital transformation in several ways. Security risks, "hallucinations" (inaccurate AI outputs), and non-repeatable workflows are all potential issues. Furthermore, haphazard deployment of AI features in products can lead to unintended consequences.
Always keep in mind what genuinely enhances the customer experience and what impedes it. Is AI replacing critical functions or features? Is it intrusive? How does it genuinely help customers solve their problems, or is it simply being added to the roadmap to appease market trends?
Until organizations invest in aligning and standardizing their data, AI's value will remain limited – or at least heavily dependent on manual setup. While AI features can create incredible value for your customers, AI in and of itself is just technology. Successful digital transformations require a deeper understanding of customer expectations, not just a more advanced but misaligned solution.
Beyond generative AI, Bjorklund identifies Agentic AI as the emerging wave in business transformation, along with the critical need for orchestration:
"Take a diverse set of agents and orchestrate the exchange of data and information between them in a way that brings a meaningful outcome."
Agentic AI differs from generative AI in its potential to operate autonomously with human supervision, rather than requiring constant human intervention.
Currently, many teams are manually exchanging data and information. However, there's a significant opportunity for drag-and-drop tools and low-code platforms that simplify coordination across these agents.
"We can orchestrate ETL type work quite easily with graphical tools… Why can’t we do that with agentic development?"
These straightforward use cases are an excellent starting point for agentic AI, especially where a workflow is already clearly defined. This is key: business processes must be thoroughly understood to replicate them effectively with agentic AI.
We are likely to see Agentic AI drive upcoming digital transformation, but the winners will still be those who consider the bigger picture behind the technology and prioritize the right approach and alignment.
Ultimately, digital transformation isn't about the tech stack. It's fundamentally about achieving specific business goals, and these goals need to be set and owned by business leaders.
Bjorklund has a clear message for business leaders striving for digital transformation success:
"Digital transformation should not be driven by IT…the business needs to drive this. You need to own it. We’re a resource for you."
When the business side establishes a clear "North Star" and consistently adheres to it, the tech side can truly thrive and deliver transformative results.
At NSC Software, we understand the complexities of digital transformation. We help businesses like yours navigate these challenges, align their strategies, and leverage the right technologies to achieve measurable results.
What are the biggest hurdles your organization faces in its digital transformation journey? Contact with us today!
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