Why most Digital Transformations fail and what to do differently

Claas
7 days ago
4 min read

What is digital transformation, really?

It's a term that’s been used so broadly and in so many contexts that it’s lost some of its meaning. To some, it means moving to the cloud. To others, it's launching a customer portal, modernizing the tech stack, or introducing AI-driven processes. The word “digital” gets attached to almost anything that touches software, and “transformation” gets used to rebrand traditional change initiatives. But here’s the definition I like best, not as a slogan, but as a working reality:

"Digital transformation is a fundamental shift in how an organization operates, delivers value, and engages with its customers enabled by digital technologies, but driven by business goals."

That’s what separates it from “just another IT project.”

Real digital transformation vs. just another project

Let’s make this more concrete. Below are a few examples that reflect real transformation and a few that don’t:

Real Digital Transformations

A global logistics company redesigns its end-to-end supply chain model, using real-time tracking and predictive analytics to optimize delivery routes, reducing operational costs and creating a new premium service model for customers.
A traditional bank builds a fully digital business banking offering, including onboarding, financing, and account management supported by new internal processes and a dedicated operating model for SME clients.
A manufacturing firm integrates IoT sensors into its equipment and shifts from selling products to offering predictive maintenance and performance-as-a-service, changing both its business model and how it engages with customers.

These efforts involve new customer value, rethinking internal ways of working, and long-term capability building. Technology is essential but it’s not the goal. The business model is.

Not a Digital Transformation

Migrating an on-prem CRM to the cloud; if nothing else changes in the way sales or service teams work.
Launching a mobile app that offers the same features as the website, without a new service model or experience.
Rolling out a new ERP system just to consolidate platforms or reduce cost, without touching how decisions are made or how customers are served.

These might be large, complex projects even expensive ones. But they’re not transformations. They’re infrastructure work. Necessary, but not transformative.

Why do so many transformations fail?

The term "digital transformation" sounds bold and visionary. But the reality behind the scenes often looks very different: shifting priorities, vague goals, frustrated users, and underwhelming results.

It’s easy to get the technology part moving. It’s much harder to change how people think, behave, and work. That’s where most initiatives stumble and where the gap between intention and impact begins to grow.

Failure rarely shows up as a total collapse. It’s more subtle:

The program is declared “done” but no one is using what was built.
The system goes live, but the business doesn’t change.
Dashboards exist, but they don’t drive decisions.
KPIs improve on paper while confidence in them declines in practice.

Often, there’s too much focus on technical delivery and not enough on true transformation. It’s possible to hit all your milestones … and still miss the point.

The common pitfalls and how to spot them early

From experience, these are the patterns I see most often in struggling transformations:

No shared understanding of what success looks like

Everyone agrees digital transformation is important. But ask five stakeholders what success means and you get five different answers. When there’s no shared outcome, the initiative becomes fragmented. Every team optimizes for their part of the puzzle, and no one owns the whole.

What to do instead: Define success upfront in business terms not technical outputs. Align leadership on what changes, for whom, and how you’ll know it worked.
Technology as the goal, not the enabler

Too many programs become obsessed with the platform: the migration, the rollout, the features. Technology becomes the center of the story and the business change becomes secondary.

What to do instead: Start with the business challenge. Use technology to remove barriers, enable new models, or improve customer value, not just to modernize for the sake of it.
Underestimating the human side

The idea that “if we build it, they will use it” is still surprisingly common. But real transformation requires real change in behavior: how people work, make decisions, and collaborate. That doesn't happen automatically.

What to do instead: Invest early in engagement, training, and user-centric design. Don't treat change management as the “final step”, make it a continuous part of the program.
Ownership gaps after go-live

Many programs fade after launch. There’s no one assigned to track whether the system is being used properly, whether KPIs are being met, or whether the business value is being realized.

What to do instead: Define a value owner from day one. Measure outcomes over time. Treat go-live as the start of value creation not the end.
Trying to do too much at once

Ambition is good. But scope overload kills momentum. When programs try to boil the ocean, changing every process, team, and tool at once, they paralyze themselves.

What to do instead: Sequence your transformation. Focus on high-impact areas first. Deliver value in waves, not all at once.

Conclusion

Most digital transformations fail not because the technology is wrong, but because the story ends too early. The real work begins after the system goes live in the choices people make, the habits they build, and the value they create day after day. When transformation is treated as a project, it ends with delivery. When it is treated as a shift in how the business thinks and operates, it becomes part of the company’s DNA. That is the difference between a milestone and a movement. And it is the difference between another expensive initiative and a transformation that truly changes the game.

What is digital transformation, really?

"Digital transformation is a fundamental shift in how an organization operates, delivers value, and engages with its customers enabled by digital technologies, but driven by business goals."

That’s what separates it from “just another IT project.”

Real digital transformation vs. just another project

Let’s make this more concrete. Below are a few examples that reflect real transformation and a few that don’t:

Real Digital Transformations

A global logistics company redesigns its end-to-end supply chain model, using real-time tracking and predictive analytics to optimize delivery routes, reducing operational costs and creating a new premium service model for customers.

A traditional bank builds a fully digital business banking offering, including onboarding, financing, and account management supported by new internal processes and a dedicated operating model for SME clients.

A manufacturing firm integrates IoT sensors into its equipment and shifts from selling products to offering predictive maintenance and performance-as-a-service, changing both its business model and how it engages with customers.

These efforts involve new customer value, rethinking internal ways of working, and long-term capability building. Technology is essential but it’s not the goal. The business model is.

Not a Digital Transformation

Migrating an on-prem CRM to the cloud; if nothing else changes in the way sales or service teams work.

Launching a mobile app that offers the same features as the website, without a new service model or experience.

Rolling out a new ERP system just to consolidate platforms or reduce cost, without touching how decisions are made or how customers are served.

These might be large, complex projects even expensive ones. But they’re not transformations. They’re infrastructure work. Necessary, but not transformative.

Why do so many transformations fail?

The term "digital transformation" sounds bold and visionary. But the reality behind the scenes often looks very different: shifting priorities, vague goals, frustrated users, and underwhelming results.

It’s easy to get the technology part moving. It’s much harder to change how people think, behave, and work. That’s where most initiatives stumble and where the gap between intention and impact begins to grow.

Failure rarely shows up as a total collapse. It’s more subtle:

The program is declared “done” but no one is using what was built.

The system goes live, but the business doesn’t change.

Dashboards exist, but they don’t drive decisions.

KPIs improve on paper while confidence in them declines in practice.

Often, there’s too much focus on technical delivery and not enough on true transformation. It’s possible to hit all your milestones … and still miss the point.

The common pitfalls and how to spot them early

From experience, these are the patterns I see most often in struggling transformations:

No shared understanding of what success looks like

Everyone agrees digital transformation is important. But ask five stakeholders what success means and you get five different answers. When there’s no shared outcome, the initiative becomes fragmented. Every team optimizes for their part of the puzzle, and no one owns the whole.

What to do instead: Define success upfront in business terms not technical outputs. Align leadership on what changes, for whom, and how you’ll know it worked.

Technology as the goal, not the enabler

Too many programs become obsessed with the platform: the migration, the rollout, the features. Technology becomes the center of the story and the business change becomes secondary.

What to do instead: Start with the business challenge. Use technology to remove barriers, enable new models, or improve customer value, not just to modernize for the sake of it.

Underestimating the human side

The idea that “if we build it, they will use it” is still surprisingly common. But real transformation requires real change in behavior: how people work, make decisions, and collaborate. That doesn't happen automatically.

What to do instead: Invest early in engagement, training, and user-centric design. Don't treat change management as the “final step”, make it a continuous part of the program.

Ownership gaps after go-live

Many programs fade after launch. There’s no one assigned to track whether the system is being used properly, whether KPIs are being met, or whether the business value is being realized.

What to do instead: Define a value owner from day one. Measure outcomes over time. Treat go-live as the start of value creation not the end.

Trying to do too much at once

Ambition is good. But scope overload kills momentum. When programs try to boil the ocean, changing every process, team, and tool at once, they paralyze themselves.

What to do instead: Sequence your transformation. Focus on high-impact areas first. Deliver value in waves, not all at once.

Conclusion

The images used in this blog post are AI generated

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