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Four Reasons Your Digital Transformation Is Failing

Jon Roskill | May 5, 2021

All businesses want to succeed. Succeeding in today’s digital economy requires a digital transformation and becoming a connected business. Unfortunately, not all digital transformations are successful, and Acumatica CEO Jon Roskill explains why.

Four Reasons Your Digital Transformation Is Failing

Implementing a cloud ERP solution as part of a digital transformation plan to become a fully connected business is a big undertaking. No organization wants projects that take a lot of time, effort, and money to ultimately fail, yet fail they do. McKinsey & Company research shows that only “16% of executives say their company’s digital transformations are succeeding.”

Why is the success rate so low? Many reasons come to mind, but four rise to the top…and three of them have to do with leadership.

Lack of leadership and data silo woes do not a successful digital transformation make

Simply put, digital transformation is taking manual, analog processes and systems and transforming them with modern technology. The result should be an automated, integrated, and digitized business that benefits from real-time data and seamlessly connects employees and stakeholders with partners, suppliers, and customers. However, as I have said (and written), digital transformation cannot magically fix your business.

Yes, digitizing analog processes is essential in today’s digital economy and connecting all records, data sources, and systems under a single pane of glass—providing employees with synchronized information within a comprehensive and integrated cloud ERP solution—is critical, but technology can only take you so far.

This leads me to the first reason digital transformations fail.

1. Executive buy-in is missing

Perhaps ‘missing’ is too strong a word, but it gets my point across. The C-suite sets the tone, establishes goals, and spearheads an organization’s roadmap for the future. From that select group of individuals, one person must step forward as the cheerleader for the company’s digital transformation project. As the project’s champion, he or she is the fuel that keeps the project’s momentum going.

Sadly, if the executive team, and more importantly, the champion, does not set clear, attainable goals for the company’s digital transformation project and fails to inject energy and drive into the plan, then a lackluster result is guaranteed.

2. Employee buy-in is missing

Who will be using the new cloud ERP software? Whose daily activities/workflows will be disrupted by an ERP system they may not recognize as necessary? Employees. And their buy-in to a new solution matters. They have the power to make or break a digital transformation project.

The key to gaining the cooperation and support of those most affected is communication. The champion, backed by the full executive team, should be offering detailed explanations of why the company is implementing a cloud-based ERP solution and explaining what the benefits are for the organization as a whole as well as for the employees themselves. The employees, then, should have the opportunity to provide their input on what they see are important features and functions of the new solution, which gives them part ownership of the project.

3. Change = hard

Change is never easy, and it’s even more challenging when it’s a seemingly overwhelming change to processes, programs, and missions that have been in place and (seemingly) working for a long time. If people (and processes) aren’t aligned with the digital transformation plan (in other words, if they don’t utilize the technology), then the transformation will be incomplete. It will have failed to impact the efficiency, agility, and profitability of the company while taking a huge bite out of the corporate bank account.

Leadership by the champion and the executive team is necessary if the change is to be accepted and supported. They may lead the charge, but nothing happens if no one follows.

Leaders must not only bring order to what could be a chaotic situation but also promote an inclusive culture of change. Both order and inclusivity will go a long way towards getting everyone on board. As one Harvard Business Review notes, good leaders “make change thinking contagious.”

4. Data silos bring data woes

When a digital transformation—or modernization of processes—is successful, businesses should immediately begin feeling the benefits. For example, the synchronization of data, records, and systems brought by a cloud-based ERP solution provides every employee with a single source of truth.

Businesses that refuse to let go of traditional analog processes will find themselves fighting redundant or conflicting information. Wise business decisions based on updated data is impossible when relying on outdated, disconnected legacy systems.

The future after digital transformation

For many, failure is not an option. The immense investment of time and money—not to mention the upheaval to employees, stakeholders, and customers—into a modern, cloud ERP solution is a big deal. Thankfully, the four main reasons a digital transformation fails can be overcome.

The benefits of becoming a connected business, including automated processes, real-time data, and in-depth analysis, are well worth taking the plunge. To learn more about successfully implementing cloud ERP solutions and digitally transforming your business to succeed in today’s new digital economy, contact the experts at Acumatica at any time.

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Senior Advisor at EQT (Former Acumatica CEO). Passionate about sports, family, community and Cloud ERP with & thru the channel!

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