Digital transformation projects are failing in more than a quarter of cases (26 per cent), according to new research.

Digital services firm Econocom commissioned Censuswide to survey 150 IT and financial decision-makers in retail, legal and financial services companies in the UK, finding that the overwhelming majority (62 per cent) of firms are in the process of implementing a digital transformation project.

The key factors driving firms to launch a digital transformation project including customer service, cost savings and improved staff productivity.

A total of 18 per cent of firms surveyed have a digital transformation plan in place already, while 11 per cent said they were thinking about it in the short term.

When asked to name the key challenges that have led to failure of digital transformation projects, more than half (51 per cent) cited a lack of understanding of technology, followed by the solution not being fit for purpose (39 per cent), lack of skills (31 per cent) and lack of budget (23 per cent).

Financial constraints and political uncertainty were also found to be holding businesses back from digital transformation projects. In total, 44 per cent of businesses said they were concerned about spending a large amount of money in a lump sum, 40 per cent said they were afraid of making the wrong technology choice and 38 stated that Brexit was holding them back on investment commitments.

Chris Labrey, managing director at Econocom, commented: “Digital transformation is an organisation-wide commitment that is costly and time intensive – businesses need to make sure they’re choosing and implementing the right technology that will help them achieve their goals.

“This means consulting, not only with change and technology experts, but with staff and other stakeholders too,” he added.

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