4 Pitfalls of a Digital Transformation Strategy

Written by: Nancy White

Read Time: 4 min

Digital transformation is an investment in the long-term success of your company. Consider this: Analysts predict that in a decade’s time, roughly 50 percent of Standard & Poor’s 500 firms will be replaced. Companies that don’t fully recognize the need to evolve will be left behind.

One of the ways companies, especially larger ones are evolving, is through digital transformation programs. And that’s great. However, the level of success of these programs runs the gamut – there are increasingly success stories, but some are still struggling.

At PTC, we’ve encountered some missteps time and time again. Below are the most common pitfalls:

1. Thinking Transformation Is a Short-Term Project

Many organizations are looking at digital transformation as the means to quick wins, i.e. let’s implement this technology and it’s going to improve our operations ten-fold! Then, we’ll be done with it. 

While there are short-term gains to be had – and these typically add momentum to the initiative -- a digital transformation strategy needs to set out a plan for 2-5 years, or longer, at the outset.

The technology landscape is constantly changing with advancements and new ideas, as well as learnings from within your organization and others. Putting a roadmap in place, while also allowing for adjustments is one of the keys to long-term digital transformation success – and longevity as a company.


2. Putting Technology Before Business Considerations

Can technology solve complex problems? There’s no doubt about that. But, identifying the right solution for your business challenges and unique circumstances needs to be a first consideration.

There may be a leading technology solution that works for many businesses, but does not integrate with your legacy systems, or the software isn’t designed with your industry or business operations in mind. In these cases, many companies end up trying to fit a square peg in a round hole. While it may work for some use cases or projects, a technology solution should be able to scale and adapt with your company’s needs in order to realize optimal return on investment and ensure progress of the digital transformation journey.

At the end of the day, it’s not about the technology, the focus should be on the value the digital transformation initiative as a whole can bring to the organization.


3. Underestimating the Power of Partners and Expertise

We’ve previously written about the downside of DIY IoT and how the majority of companies that decide to develop software solutions internally are met with high costs, longer timelines, and ultimately little to show for their efforts. While it can seem appealing at first – because you’re building something customized to your business – experience (and research) has shown the disadvantages outweigh the positives.

With digital transformation, sticking to your core competencies and seeking out digital partners and expertise that complement and augment expertise accelerates time-to-value and maximize return.

Howden is an excellent example. When this global enterprise began their digital transformation journey, they decided early on that they needed to stay focused on their core competency. Maria Wilson, Howden’s global leader of their digital transformation program, Data-Driven Advantage, spoke to this at LiveWorx 2019.

“Our journey is not about changing who we are, we are and remain a leading designer and manufacturer of rotating equipment and our assets can be found in virtually every air and gas handling application in the world,” Wilson said. “We have over 165 years of experience in that and at the same time, we are using the most advanced digital technologies available today to further enhance our products to create more value to our customers than ever before.”

With improving customer experience at the center of their digital transformation strategy, Howden sought out partners (like PTC and Microsoft Azure) to accelerate their initiatives.

“With ThingWorx and Azure, Howden will be able to capitalize on the opportunities inherent in the Internet of Things to quickly grow and scale its operations,” Wilson said.


4. Doing Too Much Too Soon

Businesses want results fast. If leaders think they have the answer to pressing problems, they can dive head first into implementing the solutions – and often end up in over their head.

While infectious enthusiasm for digital transformation is a necessity, especially for leadership, coming up with 100 use cases for a particular technology is about 97 too many.

As we mentioned in the first “pitfall” digital transformation is a long-term strategy with both short- and long-term goals. Identifying a starting point that can be built upon or rolled out across multiple locations is ideal. At the outset of a digital transformation project, discuss how the team will assess progress. These waypoints, so to speak, will help guide and inform the strategy moving forward.
The best starting project makes a big impact in a short amount of time. Then, with an initial success, digital transformation gains momentum and more complex use cases can be explored.


Final Thoughts

Digital transformation isn’t a choice anymore for the modern enterprise – at least one that wants to be around in a decade’s time. In 2020, business leaders understand the need for digital, the need to evolve, and the need for efficiency. However, mapping out what digital transformation actually looks like for a global business is more elusive. As you start – or restart – your digital transformation efforts, avoiding these four common pitfalls puts you on solid ground.

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Tags: CAD Industrial Internet of Things Product Lifecycle Management (PLM) Retail and Consumer Products Digital Transformation

About the Author

Nancy White

Nancy White is the content marketing manager for the Corporate Brand team at PTC. A journalist turned content marketer, she has a diverse writing background—from Fortune 500 companies to community newspapers—that spans more than a decade.