Why business digitalization fails: external and internal reasons

Mar 6, 2020

You have worked out a digitalization strategy that would clearly optimize business processes and even have developed an action plan. But... Something is stopping you from getting started.  “If it isn't broken, don't fix it,” your boss says wearily. This very attitude have killed dozens of promising businesses.

It is always extremely hard to turn innovative ideas into reality, and people who come up with those often risk being criticized by colleagues or customers. People get used to a certain process flow and are reluctant to step out of their comfort zone. Indeed, many projects die because businesses fail to recognize the value of ideas and innovative solutions on time.

The history of our relations with startups shows that such failures mainly happen for two simple yet big reasons: internal and external.


The internal reason is a zero or poor strategy

Inventors want to put their ideas into practice as soon as possible, with their primary intention being to benefit people. So, they hurry up to rock the market before finding potential customers or even making sure that the market actually needs their solution. Newcomers do not take time to assess product/market fit, and eventually pay a high price for this mistake.

Do you remember hoverboards? The inventors put a lot of money into them, claiming they would change our idea of transportation and become an essential element of urban landscape. But the product failed to take on the market. Why? People did not want to give up their original scooters for an unknown and expensive new product.


The external reason is that companies are not willing to embrace innovations

Being concerned about disruptive effect of innovations, most businesses just try them out in a few cases and do not go further. Thus, robots are trusted to make the first lead touch only, with all other steps being usually assigned to a human being. This is why such robots are not expected to do more than read, write, speak, and copy/paste.

In 2018, as part of its Global Digital Operations Study, PwC interviewed 1,155 manufacturing executives in 26 countries to find out that just 10% of global manufacturing companies are Digital Champions, while almost two-thirds have barely or not yet begun on the digital journey and only 9% of companies have already implemented artificial intelligence (AI) apps to improve operational decision making.

As far as HR processes are concerned, many businesses believe that robots will never be capable of replacing HR managers who act as brand ambassadors. Indeed, RPA can harm company’s HR brand by making applicants feel like they are on a conveyor belt without any personal touch.


To sum up, proponents of digitalization and innovative ideas need to consider both of the above reasons to avoid related promotion pitfalls. This is where digital transformation experts come in and help businesses work out the best strategy, deal with objections, and successfully complete every stage of solution development and implementation.