Digital transformation is often seen as a way for companies to get ahead of their competitors and get rid of methods that may be considered outdated or ineffective. However, digital transformation is not always successful. The most common impact of a failed digital transformation is the fear that future similar attempts will fail. Another serious impact is the potential for a department to close, which occurred in over a quarter of the executives who experienced such a failure.
Among the potential consequences of a failed digital transformation are the loss of customers and market share, financial losses and staff layoffs , according to research by business software provider IFS . Specifically, IFS reported that when IT projects fail , managers are significantly decimated. Moreover, the consequences are often felt in the long term. Specifically, the research notes that almost half of companies took 1-2 years to recover from the failure of an IT project, while a third said it took 2-3 years to recover from such a failure.
Among those whose digital transformation projects failed, nearly 46%, or about half, cut budgets in other areas, while a third reported that employees and investment in similar projects.
Despite the risks, businesses are still keen to invest in digital transformation projects, largely because the positives seem to outweigh the negatives. According to the survey, 71% of implementers said projects were delivered on time, with just over half reporting that they delivered the expected results. Additionally, 52% of respondents said they were willing to increase their digital transformation spending, compared to 18% who said they would spend less. Respondents who cited the economic outlook as a deterrent to business were 20% more likely to plan to increase their digital transformation spending.
