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Half of businesses lose employees when DX projects fail, Endava research finds

Half of businesses lose employees when DX projects fail, Endava research finds

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New research has revealed the roadblocks, tactics and outcomes of Digital Transformation efforts in the last year at businesses across the globe. The overwhelming majority said that only 50% or less of their DX projects in the last year met the expected goals or outcomes. Matt Cloke, CTO at Endava, explores how SMEs can approach and carry out Digital Transformation projects.

Endava, a global provider of Digital Transformation, agile development and intelligent automation services, has revealed a sponsored IDC InfoBrief, Leveraging the Human Advantage for Business Transformation. Exploring how organisations are tackling the evolution to the digital business era, the InfoBrief uncovers the roadblocks, tactics and outcomes of Digital Transformation (DX) efforts in the last year, as well as strategic drivers and approaches to integrating major technologies shaping the landscape, such as Artificial Intelligence (AI) and automation.

The research, which surveyed business leaders and decision-makers across the globe, revealed that the overwhelming majority (88%) said that only 50% or less of their DX projects in the past year met the expected goals or outcomes. And when businesses miss the mark on DX projects, it’s not just their infrastructure or competitive position that suffers. While 62% reported failure resulting in them being less technically mature than competitors and having a longer time to market, key challenges damaging the employee experience emerged as consequences too. Many are facing frustrated staff (56%), as well as a rise in staff attrition (50%) and a less stimulating work environment (44%).

The causes of lacklustre results from Digital Transformations reinforce the notion that strategies too often neglect to prioritise a people-first approach in the planning, design and implementation of digital initiatives. For example, 39% of respondents indicated that a lack of employee buy-in was a key reason for failing to meet expected outcomes, implying a need for cultural considerations to encourage user engagement. This was followed by conflicting opinions from leadership (36%) and a lack of collaboration internally (33%), demonstrating a struggle to successfully navigate organisational dynamics or engage stakeholders throughout projects. When reflecting on failed DX projects, over half recognised that investments would have been better channelled into people-centric projects such as upskilling staff (55%) and improving IT and line of business communication (50%).

Amid the rapid advancement of AI and the Generative AI boom over the last few years, the survey also uncovered strong levels of current implementation and adoption plans in the pipeline, with almost half (49%) of the respondents having already deployed AI in their organisation or running a proof of concept. Many organisations recognised the impact of retaining a human influence on their use of AI, with 51% declaring it as very or extremely important. Similarly, automation strategies were aimed at empowering a stronger employee experience and freeing people to work more strategically. Fifty-eight percent said their automation strategy is highly or very highly focused on removing mundane tasks, and 54% agree that employee engagement and satisfaction are integral. The data on DX shortcomings, however, highlights a gap between many businesses’ intentions for digital projects and the ability to bring these to fruition.

Despite this, for those who do get DX projects right, there are promising employee and customer outcomes beyond the business benefits. As well as achieving outcomes such as process optimisation (62%), cost reduction (57%) and revenue increases (53%), respondents also reported improved customer experiences (45%) and an uptick in employee productivity, satisfaction and retention (42%) when initiatives were effectively managed.

Matt Cloke, CTO at Endava, said: “Digital Transformation (DX) is only ever as successful as the impact it has on humans, and so for SMEs to truly get initiatives off the ground it’s critical to understand how people will respond to new technologies.

“IDC research (sponsored by Endava) has affirmed both the consequences of failing to prioritise people with DX projects, as well as the rewards on offer for businesses who get it right. Not only do one in two businesses lose employees when DX projects fail, but 56% face frustrated staff and 44% suffer from a less stimulating work environment. And when failures are far from uncommon, with 88% of business leaders expressing that one in two of their DX projects did not achieve their expected goals and outcomes in the past year, it’s never been a better time to champion a more resilient strategy.

“Rising above these challenges demands that SMEs dive deeper into the needs of both employees and customers throughout every stage of digital evolution. In practice, this is all about putting humans at the heart of each decision and understanding individual needs and expectations. In doing so, businesses will be able to work through cultural barriers to adoption and build engagement from the outset. This is especially key when unsuccessful projects have largely been born from internal dynamics, as respondents from IDC’s research blamed a lack of buy in from employees, conflicting opinions or priorities from leadership/management and a lack of collaboration between the organisation’s departments as the top reasons for failure.

“Ultimately, employees are tasked with making digital initiatives take off. So, when business leaders empower them to embrace and unlock their value, they can amplify positive outcomes, offer insights for improvements and continually build on successes. For example, taking a human-centric approach offers valuable outcomes beyond purely business benefits such as process optimisation and cost reduction – successful management is shown to drive meaningful outcomes such as boosted customer experiences (45%) and improved employee productivity, satisfaction and retention (42%). As SMEs shape their digital strategies for the year ahead and beyond, developing inclusive digital solutions and constantly being mindful of people will go a long way towards bridging the gap between innovative products and market success.”

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