CXO

Here's how companies waste $28M on digital transformation projects per year

Most organizations believe rushing into digital transformation increases the likelihood of unsuccessful projects, wasting company money.

Over half (52%) of organizations believe that succumbing to pressure and rushing into a digital transformation project will cause it to fail, according to a global survey announced Tuesday from Couchbase.

The company surveyed 450 leaders in enterprise digital transformations, and the majority agreed that the pressure to digitally transform causes companies to rush into projects too soon, said the press release. By rushing into poorly thought-out projects, companies could waste an average of $28 million in the next 12 months, according to the release.

SEE: Digital transformation: A guide for CXOs (Tech Pro Research)

Pressure for organizations to engage with digital transformation projects is mounting. In fact, some 90% of companies are working on AI projects to better their businesses. Organizations are also starting to feel like digital transformation is synonymous with relevancy: 86% of respondents agree that businesses have to adapt to digital transformations in the next 12 months to stay in the game, according to the report.

The main reason companies are even wanting to digitally transform is due to competitors. Couchbase found 35% of respondents pointed to their competition as the main driver for digital progression—if a rival company is transforming, the other party wants to keep up.

Failure doesn't feel like an option to companies, though. Some 83% of respondents believe they would be fired if a project failed, yet 64% know that without digital innovation projects, the company will go out of business or be absorbed, according to the release. Employees in the digital transformation age feel as if they are facing a double edged sword: Either try out new technology, or be ousted.

"We are entering the era of the massively interactive enterprise where every part of an organization, from sales and marketing, to HR, finance and logistics, is built around engaging digital experiences," Matt Cain, CEO of Couchbase, said in the press release. "The revolutionary potential of digital transformation will have a hugely positive impact for those organizations that can do it well. However, the pressure to transform at speed means organizations have a higher risk of taking a rushed, reactive approach, driven by the fear that the organization will lose relevance, that results in substandard experiences and wasted investments."

However, companies that are able to ignore the pressure and take digital transformations step-by-step see great success, said the release. In order for organizations to excel in a digitally transformed world, they must be patient and strategic in executing projects.

The big takeaways for tech leaders:

  • While 86% of companies believe digital transformations are necessary for success, 52% think digital transformation only leads to failed projects, according to Couchbase.
  • For a companies to digitally transform in a successful manner, they can't fold under the rush and pressure of competitors.
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Image: iStockphoto/scyther5

About Macy Bayern

Macy Bayern is an Associate Staff Writer for TechRepublic. A recent graduate from the University of Texas at Austin's Liberal Arts Honors Program, Macy covers tech news and trends.

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