Digital transformation has become the number one issue for senior managers of leading companies in recent years. Nevertheless, many digital initiatives still fall short of their goals, and this often leads to multibillion-dollar losses. This paper will discuss failures that companies face when applying digital technologies mentioned in the article “How the meaning of digital transformation has evolved” by Tom Puthiyamadam (2017) and the effect of lack of technological adaptability.
Puthiyamadam highlights several issues that companies have encountered during the recent decade when implementing and utilizing digital initiatives. First, digital transformation activities have changed significantly from data mining, search technology to artificial intelligence and the Internet of Things (Puthiyamadam, 2017). However, not all companies were able to keep up with rapid changes. Furthermore, senior managers have no clear understanding of what digital transformation is and how it can affect business in the future.
Second, the author emphasized that managers recognized the importance of digital activities and saw as the primary goal of digital transformation the increase in revenues and reduction of costs (Puthiyamadam, 2017). Nevertheless, these statements did not translate into companies’ investments in innovative technologies than organizations’ overall technology expenditures. The investment in digital transformation rose only by 1% over the ten years, according to Puthiyamadam (2017). The situation can be explained by the assumption that managers cannot evaluate the feasibility and efficiency of innovative solutions and the latest technologies for companies’ products and services. Overall, the pace with which digital technologies emerged made it complicated for organizations to adjust their strategies and invest in digital transformation in advance.
In the article, it is mentioned that human experience becomes the most crucial part of the business. Focus on clients and customer experience is essential for an organization’s Digital IQ and encourages leaders to utilize digital activities (Puthiyamadam, 2017). Therefore, the lack of technological adaptability can lead to customers’ and revenues’ loss and require tailored solutions. The company’s viability can be ensured by creating engaging user and client experience that digital activities allow establishing and bonding general strategy with IT solutions that help address future challenges.
The lack of technological adaptability can significantly affect the viability of the company. It is stated that of the Fortune 500 companies in 1955, only 12% stayed in the list in 2014, which means that some went bankrupt, were not able to adjust, or merged (Boss, 2016). One of the reasons that influenced the destruction of companies is technology implementation (Boss, 2016). Challenges, such as COVID-19, also showed that those companies that use innovative technologies and implement digital transformation capture customer attention and benefit from clients (Sheppard et al., 2020).
To conclude, one can say that organizational failures in using digital technologies can be various and have a specific influence on operational processes within the company. Nevertheless, the inability to effectively conduct digital transformation and utilize the latest technologies may lead to companies’ adverse outcomes till exiting the business.
References
Boss, J. (2016). Staying competitive requires adaptability. Forbes. Web.
Puthiyamadam, T. (2017). How the meaning of digital transformation has evolved. Harvard Business Review. Web.
Sheppard, B., Zarubina, D., & Jenkins, A. (2020). Adapting to a new world. Strategy+business. Web.