Only 30% of digital transformation projects met or exceeded their target value, according to a report from Boston Consulting Group.
However, BCG said that another 44% created some value, but didn't hit targets and resulted in only limited long-term change. BCG also noted that 26% created value of less than 50% of target and produced no sustainable change.
Add it up and digital transformation efforts, which are critical during the COVID-19 pandemic and new normal, need some work. BCG said it its report that more than 80% of companies plan to accelerate digital transformation efforts.
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BCG based its analysis on 895 digital transformation projects.
According to BCG, most transformation efforts start off well, but ultimately lose focus. "When trying to bring everyone along with the overall plan, it can be easy to compromise and lose focus on the transformational aspiration. This is where the trouble usually starts," said BCG in its report.
There is a bright side in that a few best practices can flip the success rate to about 80%, said BCG.
Success factors include:
- A strategy with clear goals and business outcomes with the why, what and how.
- Commitment from the CEO to middle management for accountability. BCG noted that middle managers are often overlooked.
- Deploying high-caliber talent and freeing up resources.
- Address roadblocks quickly and adapt to contexts and missions.
- Monitor progress toward outcomes with clear metrics and targets around processes.
- A business led modular technology and data platform.
BCG noted that its data, based on internal data from working with 70 companies, shows that companies need to focus on all 6 best practices.
It is crucial to address all six factors. Companies that adequately addressed only three or four failed. Of all of the possible combinations examined, none had the same impact on success as these six.