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Why 9 out of 10 digital transformation projects fail

Scott Carey | July 31, 2017
Research from NoSQL database vendor Couchbase shows that nine out of 10 digital transformation projects fail, and legacy technology is largely to blame.

Why does digital transformation fail?
Credit: Graphicstock 

Digital transformation may be the inescapable buzz phrase of the moment, but new research shows that successful projects are few and far between.

Digital transformation essentially means the strategic attempts by a business to significantly change its business model by leveraging digital technology. Think Ford turning to self-driving vehicles under new CEO Jim Hackett, or asset manager UBS building its own robo-advice service. The main aim is to not do a Kodak and become a dinosaur, or to be disrupted by an Uber.

Research released by NoSQL database vendor Couchbase today (pdf) shows that nine out of 10 digital transformation projects fail.

The survey reports that despite 95 percent of respondents agreeing that the aim of digital transformation should be to offer end-users a truly unique experience, 90 percent of digital projects failed to meet expectations and only delivered incremental improvements.

The research was conducted by Vanson Bourne, surveying 450 CIOs, CTOs, and Chief Digital Officers tasked with digital transformation at organisations with 1,000 employees or more across the US, UK, France and Germany.

There is a palpable fear among the respondents, with 89 percent saying their industry is either being disrupted by digital technology, or such disruption is only a matter of time.

This mirrors a famous 2014 study from the John M. Olin School of Business at Washington University, which estimates that 40 percent of Fortune 500 companies on the S&P 500 will no longer exist in 10 years.

The research also found that the average spend on digital transformation projects is $5.7 million (£4.4 million) per year.

 

Why does digital transformation fail?

The problem is that businesses the size of Ford have to keep the lights on, and the investors happy, all while innovating in the face of a rapidly changing technology landscape and consumer expectations.

The most pressing issue, according to respondents, was a lack of agility when developing new applications. Large organisations have complex processes, heavy regulatory and legal requirements, and legacy technology to contend with.

Startups can "move fast and break things" and scale quickly using cloud vendors like Amazon Web Services (AWS) and its various database options; the National Health Service (NHS) cannot.

NoSQL database vendor Couchbase, naturally, blames the traditional database for the majority of project failures. The white paper backs this claim up by stating that 84 percent of respondents said it had "digital projects delayed or even scrapped due to limitations of their legacy database".

The report found 29 percent had to reduce the scope of a project due to the cost of making changes to legacy technology, while 14 percent have had to delay projects significantly.

 

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