16 Common Mistakes to Avoid in Digital Transformation

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16 Common Mistakes to Avoid in Digital Transformation

Digital transformation streamlines business processes and promotes data-driven decision-making through digitalization. Here, we’ll discuss the common mistakes to avoid when digitally transforming your enterprise and how to achieve success. 

Digital transformation is the use of technology to radicalize an enterprise and turn it into a digital-first data-driven model. This enhances business processes, increases customer experience, and improves revenue. 

Statistics show that digital transformation with grow at a CAGR (compound annual growth rate) of 19.48% to reach $767 billion by 2026. Another survey report shows that 70% of businesses have a digital transformation plan or are developing one. Furthermore, around 80% to 93% of employees think that increasing the use of technology will improve business performance. 

However, 41% of organizations are investing in digital transformation without researching customer requirements. Not all enterprises know how to initiate and continue the digital transformation, thus making numerous mistakes and generating losses. In this blog, we’ll read more about the mistakes and the reasons for DX failure in organizations, the challenges, barriers, and ways to avoid them. 

Why does Digital Transformation Fail? 

Research shows that a majority of digital transformation projects fail. In fact, according to a study by Boston Consulting Group, the failure rate is 70%. 825 organizations from around the world were included in the study. 

But why do 70% of digital transformations fail despite access to technology and talent? Experts say the reasons are straightforward, though many factors result in failure instead of success. 

  • Lack of alignment between business values and desired outcomes.
  • Lack of awareness about the advantages of technology and digitalization. 
  • Mismanagement of agile teams (choosing the wrong team leaders). 
  • Too many distractions and communication gaps across the enterprise.
  • Miscommunication between IT and non-IT teams. 
  • Lack of vendor accountability and uncontrollable external factors. 
  • Losing talent to competitors due to inaction (ineffective employee retention strategies). 
  • Wrong prioritization, a disconnect between different departments, and a slow decision-making process. 

In most instances, digital transformations fail not due to the lack of technology but due to mismanagement or lack of experience in implementing transformation in the organization. These issues can be effectively handled by partnering with digital transformation service providers. Offshore companies not only provide access to the necessary technology but also help leaders and employees proactively tackle the changes in their business. 

What are the 4 Key Challenges of Digital Transformation?

  • Technology (how to choose and which one to adopt?) 
  • Competency (are employees capable of dealing with digital transformation?) 
  • Organizational Culture (can the existing work culture support digital transformation?) 
  • Support (does a business have internal and external support to implement DX?) 

What are the 5 Barriers to Effective Digital Transformation?

  • Avoiding Innovation
  • Talent Gap 
  • Ineffective Leadership
  • Lack of IT Infrastructure 
  • Large Scale Transformation 

Mistakes to Avoid in Digital Transformation

Do you know that 87% of businesses know digital transformation will disrupt the industry, but only 44% are prepared to handle the disruptions? It’s no surprise that the digital transformation failure rate is high, with several enterprises not taking the necessary steps to avoid even the most common mistakes of digital transformation. 

Take a look at the mistakes to avoid when digitally transforming your organization.

1. Having an Incorrect Idea of Digital Transformation

This is the biggest mistake to avoid in digital transformation adoption. The business must understand what it means to digitally transform the enterprise and its impact on the internal process, employee, customer relationships, finances, and market. Just because every industry expert says you need digital transformation doesn’t mean you dive right into it without understanding the core concepts. 

Spend time researching all aspects of digital transformation and how it can help your business. Find a digital transformation consulting company to help you get the answers to your questions. Don’t initiate any process or change without gaining clarity on the basics. 

2. Blindly Following Trends Without Goals and Objectives

Digital transformation is not a trend. It’s not something you do because your competitors are working on it. Following the ‘trends’ of digital transformation can cause more harm than good to your organization. Connectivity and integrations are the core of DX, and this can lead to many risks, such as data security lapses, violating data privacy regulations, etc. 

Instead, start with risk analysis to understand how digital transformation can affect your enterprise. Then, define the goals, objectives, and outcomes for the process. Align these with your business goals to have something concrete to work on. Avoid random digitalization of processes.  

3. Not Considering All Phases of Digital Transformation

Business digital transformation is not a single step or phase. It’s not a one-thing solution that will fix all problems in the organization. DX is implemented in phases and is a continuous process. It is a cycle where changes in one department impact the other and create a cohesive internal process across the enterprise. 

However, many businesses don’t consider the post-implementation phases of digital transformation. This creates uncertainty and leads to process errors as employees don’t know what to do when the new technology goes live. A simple way to avoid this mistake is by creating awareness and educating every involved about DX. 

4. Not Having a Definite Outcome for the Process

Why do you want to digitally transform the enterprise? What outcome do you wish to achieve? Digital transformation is likely to fail when you don’t have clear answers to these questions. The top management, decision-makers, and employees should know the implications of DX. 

Start by defining the outcomes and work backward to create a feasible and comprehensive digital transformation strategy. For example, the outcomes desired by a healthcare center will be different from that of an insurance company. You can make the right chances when you know what you want to achieve. 

5. Underestimating the Cost of Digital Transformation 

This is another common mistake many enterprises make. Digital transformation is expensive. It requires continuous investment in revamping the IT infrastructure, training employees, and redefining the work culture. Many hidden costs affect your budget. CFOs need to be aware of the expenses before they approve the budget for digital transformation. 

That’s why CFOs, CEOs, COOs, and other decision-makers have to understand DX and be fully involved from the early days. You also have to choose between modernizing legacy systems and replacing them with completely new tools. Digital transformation experts can help make the right decisions and plan the costs based on your business requirements. 

6. Excluding a Majority of the Stakeholders

A recurring mistake several businesses make is to leave the frontline workers in the dark. If employees who will use the new technology and processes don’t know what’s happening in the background, they won’t be in a position to jump on board and accept the changes. 

For example, if you want to develop a model to assist customer care representatives, the AI experts need direct input from the representatives. This will enable them to build a model that exactly caters to the customer’s requirements. But by excluding the customer care team, the AI engineers have to work with what they have, which may not solve the problem. Always involve the necessary stakeholders and employees in the early stages of digital transformation.  

7. No Team Effort in the Enterprise

Digital transformation is not a one-man job. It’s not the responsibility of a single team to digitally revamp an entire organization. Every employee and leader has to be involved in the process. You should combine technology, processes, and human expertise to make DX successful. 

Cultural dynamics play a vital role in digital transformation. Using new technology will not make the organization digital. How you use the technology and make decisions determines the results. Success is possible when you make a collective effort to adopt digital transformation at all levels. 

8. Seeing Digital Transformation as a Journey But as a Step

Digital transformation is a long-term journey of continuous improvement and development. Though you should have definite goals, there is no real endpoint for DX. The ultimate aim should be to be proactive and adopt better practices as early as possible to gain a competitive edge in the market. 

When you see digital transformation as a short-term solution, it doesn’t bring the necessary cultural changes which influence decision-making. Take the help of a digital transformation company to get into the right mindset before initiating the process. 

9. Focusing on a Single Aspect of Digital Transformation

For many businesses, digital transformation is about automation and replacing paperwork with digital files. However, DX is much more than these two. When you restrict digital transformation to just one aspect, you fail to take advantage of all the benefits it offers to boost your business. 

DX is about how an enterprise uses technology to help employees streamline their daily work and increase performance. It has to align with your working style and effectively tackle the challenges to provide alternative solutions. 

10. Ignoring the Need for a Diverse Skill Set

Digital transformation may seem like it is technology-dominated. While this is true to an extent, technology is just a portion of the entire process. DX is also about people, soft skills, work culture, employee performance, customer requirements, etc. Building a team with diverse skill sets is vital to achieve the desired outcomes. 

Don’t exclusively rely on data analysts or AI engineers. You also need to work with data scientists, HR managers, sales representatives, finance managers, etc., to understand the viewpoints of their departments and create a comprehensive digital transformation strategy. 

11. Not Using the Right Tools and Technology

Strategy is the first step of digital transformation. However, execution is equally important. What looks good on paper may not work when executed. Or, you may not have the right tools to convert ideas into reality and digitally transform your business processes. 

Furthermore, choosing the wrong technology or relying on outdated systems can impact the results and cause DX failure. So how do you know which technology to use? Talk to a digital transformation firm and take their assistance to identify the key processes, tools, and technologies to successfully transform your business. 

12. Choosing the Wrong Parameters for Digital Transformation

We aren’t talking about KPIs or metrics. Here, the discussion is about time and resources. Just as businesses underestimate costs, they also overestimate their capacity to transform the systems on their own. Enterprises need to stop focusing on a time-based plan. Instead, develop a resource-based plan to adopt digital transformation in the organization.  

That way, you will know whether you have the necessary resources. It also becomes easy to seek external help from vendors or offshore digital transformation companies. Many organizations hire external consultants and experts to gain access to their resources and speed up digital transformation. 

13. Integrating Technology with Broken Systems

Technology is not the solution to everything. It can be effective when used in the right systems and processes. Digital transformation is more about fixing broken systems and replacing outdated procedures while choosing the right technology to support the changes. Technology is a tool to achieve the goals. 

So, you should start your DX implementation by identifying systems that need fixing and then find a way to fix them effectively. Simply bringing the latest tool into an erroneous process will not deliver the expected results. 

14. Accepting Failure Early and Giving Up

Most organizations adopt a ‘fail-fast’ attitude when implementing digital transformation. While this is necessary to an extent, taking it to extremes will invariably lead to failures. Businesses should neither accept failure easily nor use it as an excuse to avoid being thorough.  

Be cautious and but also make sure to have an in-depth understanding of DX to minimize the risk of failure. Instead of giving up after the first attempt, contact a reputed digital transformation company to identify the issues and take corrective steps before trying again. 

15. Not Hiring the Right Talent to Implement Digital Transformation

The most successful digital transformation examples have one thing in common- the right talent in the right place at the right time. Whether you build a DX team from scratch or hire an offshore partner, the people you choose to lead the program have a strong influence on how well digital transformation is implemented. 

The right service provider for your business is the one who understands your vision, mission, and objectives. The digital transformation company should have the industry experience to help you align your objectives and metrics and achieve the desired results. Find a company that suits your business the best. 

16. Expecting Employees to Accept and Adopt Without Support

Digital transformation is complex, continuous, and overwhelming. Expecting employees to jump in whenever you want without prior information can lead to chaos. Humans, by default, are wary of changes and new technology. Ordering them to adapt to the changes with training or support will lead to adverse results. 

Instead, involve your employees in every stage of digital transformation. Ask for their input and feedback. Educate them about the advantages of digitalizing the business. Bring changes to the IT infrastructure and work culture simultaneously. Provide technical training and emotional guidance to make things easy for them. Support your employees throughout the process. 


Digital transformation can be successful in the first attempt if you take the time to understand the process and hire the necessary talent to initiate the developments. You can easily avoid expensive mistakes in digital transformation and boost your business. 

With years of experience in the industry, we offer end-to-end digital transformation services to SMBs, MSMEs, and large enterprises across the globe. Talk to our team to know how DX can increase your business revenue and enhance customer experience. 

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