In recent years, digital transformation programmes have become central to business strategies worldwide. However, respected research highlights a sobering reality: between 70% and 84% of digital transformation initiatives fail to achieve their stated objectives.
- McKinsey & Company found that 70% of digital transformations do not meet expectations - resulting in wasted investment and unrealised value.
- Forbes and various industry reviews report that up to 84% of digital initiatives fail, making successful transformation the exception rather than the norm.
- Studies estimate this failure results in trillions of dollars lost globally, with over $2.3 trillion already wasted on unsuccessful digitalisation projects.
Procurement-specific failure rates
Procurement - a critical function for cost control and supplier management - also faces daunting challenges in digitalisation.
- Procurement-specific research shows that 30-80% of digital procurement transformations fail to achieve intended outcomes.
- One comprehensive review put procurement digitalisation failure rates at up to 80%, with only about 20% of projects delivering the promised benefits.
- For context, approximately three in ten procurement leaders anticipate their digitalisation projects will underdeliver or be considered failures, with higher rates cited in broader industry surveys.
Why do digital transformations fail?
The persistently high failure rates in both general and procurement-specific digitisation can be traced to several root causes found consistently in research:
1. Lack of Clear Vision and Strategy
Companies often embark on technology adoption without a well-defined purpose or an understanding of the true business problems they need to solve, leading to misaligned projects.
2. Neglect of Change Management
Successful digital transformation demands ongoing change management: preparing, training, and incentivising employees. Without this, resistance to new processes and technologies quickly undermines even the best technical solutions.
3. Overemphasis on Technology, Underinvestment in People and Processes
Firms often focus too much on acquiring new technology and too little on equipping people or redesigning processes - resulting in poor adoption and underutilisation of new systems.
4. Poor Leadership and Stakeholder Buy-In
Ineffective leadership, fragmented accountability, and lack of C-suite support are cited as major obstacles. Procurement projects specifically falter when there’s insufficient executive buy-in or poorly articulated vision.
5. Misaligned or Inadequate Resources
Without adequate budgeting, resource allocation, or prioritisation, digital initiatives lack the fuel to drive sustainable change. Underestimating what’s required—both in money and time—leads to unfinished or stalled projects.
6. Failure to Scale or Integrate
Many efforts succeed as pilots but fail to scale across the organisation. Siloed implementation or insufficient integration with existing systems undermines transformational impact.
7. Lack of Metrics and Ongoing Evaluation
Organisations rarely set clear KPIs or fail to measure progress. Without success metrics, it’s difficult to course-correct or justify further investment.
8. Cybersecurity and Technical Debt
With rapid adoption comes increased risk. Neglecting cybersecurity or layering new tools atop outdated infrastructures can result in vulnerabilities that derail progress.
Conclusion
Digitisation failure rates - between 70% and 84% globally, and up to 80% in procurement - reflect persistent mistakes in vision, change management, leadership, and organisational readiness. Businesses seeking successful digital transformation must treat these efforts as comprehensive organisational change, not solely IT projects. Addressing these root causes is essential to capture the promised value of digitalisation.
Start small, scale from there
DeepStream delivers best-of-breed eRFx software with supporting source-to-contract modules, delivering the essential features that empower procurement teams to mature, step by step. We prioritise usability, ensuring our solution is the simplest, cleanest, and most user-friendly in the industry, backed by our dedicated customer success team.
The procurement tech space is filled with hype, overselling, and mis-selling of sweeping, end-to-end digital transformation initiatives. Yet these projects fail because teams are sold overly-complex solutions they’re expected to ‘grow into’. This leads to tech overwhelm, low adoption, and wasted investment.
Our customers start by implementing the least amount of tech needed to achieve their immediate goals, helping them ensure rapid value realisation. Want to benchmark your procurement maturity?
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