Transformative digitalization: A new approach to digital transformation
Digital transformation (DTx) is a buzzword we’ve all heard. It means using technology to change the way businesses or governments operate. But here’s the problem: many digital transformation projects, especially in developing countries, fail.
Why? Because they focus too much on the technology and not enough on the people, processes and leadership behind it.
Why DTx often fails
Studies show that as many as 80 percent of these projects fail, not because of bad technology but because of poor planning and execution. There are 23 failure factors why DTx projects fail in some countries due to the “technology-first-approach” (Syed et al., 2023).
Many digital projects fail because they don’t address the real issues. It’s like putting a fancy engine in a broken car—it won’t work unless you fix the car first. Here are the common reasons DTx efforts fall short:
- Weak organizational structure. Teams often lack the necessary skills, and inefficient processes slow everything down.
- Poor leadership and vision. Leaders may not fully understand the technology, or they fail to communicate a clear vision to their teams.
- Resistance to change. Employees and managers often resist new ways of doing things because they fear losing control or they simply don’t like change.
- Misaligned goals. Many digital projects don’t align with the company’s broader strategy. This creates confusion and leads to failure.
- External challenges. In some cases, political or economic instability can also derail projects.
- In response to this challenge, I coined the term “Transformative Digitalization (TDx)”—an approach that shifts the focus back to transformation itself, ensuring that processes, leadership and culture are ready for digital change.
What is TDx?
TDx takes a different approach. Instead of focusing on the technology first, it focuses on the transformation—getting the organization ready for digital change by addressing leadership, process and culture first. Here are the core elements of TDx.
- Leadership and culture: Many DTx efforts fail because leaders aren’t engaged, or they don’t set a clear vision. In the Sri Lankan government’s failed eMotor Registration project, poor leadership and resistance to change led to its collapse.
TDx brings leaders on board from the start and prepares the organization’s culture for change. By engaging employees early and creating a shared vision, TDx makes digital change easier to accept and manage.
Article continues after this advertisement2. Streamlining processes: One of the biggest mistakes in DTx is automating inefficient processes. TDx prioritizes fixing those processes before introducing technology. This ensures that digital tools improve workflows rather than make them more complicated.
Article continues after this advertisementFor example, if a government agency’s procurement process is slow, digitizing it won’t help unless the underlying process is first improved.
3. Strategic alignment: Many digital projects fail because they aren’t tied to the organization’s larger goals. TDx emphasizes aligning digital initiatives with the company’s long-term strategy.
For example, if a hospital adopts new patient management software, that technology must support the hospital’s broader goals of improving patient care, not just speed up administration tasks.
4. Upskilling employees: People are the heart of any transformation. Many failures happen because employees lack the skills to handle new technologies. TDx focuses on training and upskilling staff before rolling out digital tools. This helps employees feel more confident and engaged, which reduces resistance to change.
These failures underline the need for a broader, more integrated approach that goes beyond technology—this is where TDx comes into play.
How TDx solves common problems
Here’s how TDx addresses the issues that often cause DTx projects to fail:
- Lack of skills. TDx makes sure employees are trained and ready before technology is introduced.
- Inefficient processes. TDx fixes processes before automating them, ensuring smoother workflows.
- Resistance to change. By involving employees early and managing change effectively, TDx reduces pushback.
- Leadership failures. TDx actively involves leaders, creating a shared vision and aligning them with the goals of the transformation from the start.
A case in point: Sri Lanka’s failed DTx project
Sri Lanka’s eMotor Registration initiative is a cautionary tale of how DTx can go wrong when the focus is solely on technology rather than addressing deeper organizational issues. One of the core reasons for the eMotor project’s failure was inconsistent leadership and changes in the direction of the project.
TDx emphasizes the importance of engaging leaders from the start and maintaining consistent involvement throughout the project. If the leadership had been engaged early on and aligned with the long-term goals of the project, it would have provided stable direction and prevented the constant changes that led to delays and confusion.
Another issue with the eMotor Registration project was the failure to properly develop and test the software. Instead of focusing on getting the necessary infrastructure and processes in place, the project attempted to push ahead without having fully developed solutions.
If TDx principles had been applied, the project would have started with a solid foundation, addressing underlying inefficiencies in the manual vehicle registration process before attempting to digitize it.
This failure highlights the critical importance of TDx principles—ensuring leadership engagement, aligning digital initiatives with broader goals and preparing the workforce for change. Had Sri Lanka’s leaders addressed these aspects, focusing on streamlining processes before introducing the new system, the outcome might have been very different.
The collapse of the eMotor Registration system underscores the need to fix broken workflows and gain buy-in from both leaders and employees before any technology is introduced (IANS, 2018).
Applying TDx in the public sector: The role of government in DTx
For government agencies, particularly those tasked with improving the ease of doing business, such as the Anti-Red Tape Authority (Arta), TDx offers a crucial framework. Arta, in partnership with the Department of Information and Communications Technology, has been working on initiatives like the Central Business Portal and digitalizing government services to reduce bureaucracy and streamline processes.
However, the journey is far from easy. While there have been successes, the reality is that inefficiencies in government still exist, and these must be acknowledged. Calling out these inefficiencies is essential, not as criticism, but as a way for Arta and other agencies to continuously improve.
By embracing the principles of TDx—focusing first on leadership engagement, process streamlining and aligning digital initiatives with broader governance goals—government agencies aim to address the underlying issues that cause many public sector DTx efforts to fail.
The work continues and partnerships with innovative startups like Twala, which helps implement digital signatures, show that real progress is possible. Ultimately, success hinges on continuous collaboration, transparency and a commitment to improving service delivery for both businesses and citizens.
Looking ahead: The future of TDx
TDx offers a new lens through which organizations can view their DTx efforts. It is particularly relevant when implementing new or emerging technologies like artificial intelligence.
Rather than focusing purely on technological implementation, it emphasizes the need for strategic alignment, process efficiency, leadership engagement and people-centric change management:
- Clear leadership that sets the vision.
- Efficient processes that are improved before they are digitized.
- A focus on people by upskilling employees and involving them in the change process.
By addressing these factors, TDx offers a way for businesses and governments to avoid the mistakes of traditional DTx and achieve lasting success.
This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP. The author is a member of the MAP Ease of Doing Business Committee. He is the undersecretary for operations of the Anti-Red Tape Authority.
