Irish firms waste €320,000 on failed digital transformations

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Many business leaders have cited poor IT governance as the reason for failed digital transformation projects over the last year, at a €323,143 average cost.

Digital transformation services provider Auxilion surveyed 100 C-suite executives from enterprises across the Republic of Ireland. The survey, carried out in August by Censuswide, found that 72% of c-suite executives cited poor IT governance as the reason behind the failure of such projects.

For over a third (35%) of these, this failure occurred in the last 12 months. A fifth (20%) of respondents said enabling digital transformation was one of the top pressure points for their organisation in terms of IT.

“It is really disappointing to hear that so many people are not seeing value from those investments, and are consequently disillusioned with digital transformation,” said Eleanor Dempsey, director of consultancy and competency at Auxilion.

“There are a lot of mid-sized to larger scale companies going through various stages of digital transformation. Every company is currently going through fast-paced change and we are seeing that our customers need to leverage technology more than ever.

“Businesses are using technology to pivot and create new business opportunities. They are also struggling with scarce resources and looking to make the most of their existing staff. This is why they are looking to automate certain activities, creating a better workplace and looking to use their staff more creatively.”

 One key change going forward is for business leaders to have a clearer picture of what they hope to achieve from digital transformation; and, critically, to look closely at how these projects are managed.

Along with the failure of digital transformation projects, more than half (59%) of Irish organisations have had to abandon a project due to poor governance. Perhaps unsurprisingly, some 80% of those surveyed believe outsourcing their IT to a partner could improve their governance.

In terms of the most important business priorities for Irish executives, these were found to be ensuring IT governance and securing business operations (37% respectively). Expanding into other markets (36%), supporting digital transformation (30%) and enabling employee engagement (28%) finished off the top five.

Despite being among the top business priorities for respondents, a fifth (20%) said enabling digital transformation was one of the biggest pressure points for their organisation in terms of IT.

Eleanor Dempsey said: “Our survey suggests that Irish organisations are struggling to successfully deliver digital transformation programs, and it’s likely costing hundreds of millions of euros across the board. Companies are clearly underestimating the complexities of driving change, automating processes and replacing technology.

“It’s worth noting that the skills required to drive digital transformation are scarce, and not readily available internally. To transform meaningfully, businesses not only need to deploy new applications and technologies, as well as business behaviours and processes, but then embed these changes across the entire team. After all, transformation projects are driven by people – and they must have the right IT governance in place to work in a collaborative and impactful way to both manage and benefit from change.

“In fact, getting the governance part of the puzzle right is crucial to embracing digital thinking and capitalising on transformation. But if this is done effectively, organsiations can benefit from heightened productivity among employees, enhanced service delivery for customers, and increased growth for the business.”

 The Auxilion survey also revealed findings in relation to cloud adoption and management, with the most popular infrastructure among those surveyed revealed as private cloud (47%), followed by hybrid cloud (23%) and public cloud (22%). However, for those using a hybrid cloud to deploy IT infrastructure, some 30% would describe their hybrid cloud strategy as not fit for purpose.

When it comes to the potential challenges to cloud adoption and management, the biggest challenges cited were lacking the knowledge and skills within the internal team (36%), struggling with data compliance requirements around the cloud (31%) and not having visibility of all devices accessing the cloud (29%).

As well as cloud – which 71% of respondents say will be in place in their organisation by the end of 2022 – other technologies are rising in popularity. By the end of the year, 69% will roll out machine learning, 65% will introduce the Internet of Things, and 63% will have Artificial Intelligence in place. Furthermore, Edge Computing will be adopted by 63% and over half (52%) will have brought in 5G.

“It is important for people to have a clear picture of what they want to achieve from digital transformation,” said Eleanor Dempsey. “It is important for project leaders to articulate a vision. It is all about bringing together the technology, strategy, people and culture.

“It is a large change programme and you need to get people to support the project. You must consistently ensure that the project is not going off track, ensure that risk is managed. Having the right people is pivotal to your success.”

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