Digital transformation has become a corporate mantra. More than 70 percent of transformations fail according to McKinsey, MIT Sloan, and Harvard Business Review. The reasons cited are usually predictable: lack of change management, insufficient leadership support, poor communication, and employee resistance.
These explanations are comfortable, but not accurate. They describe symptoms, not causes. The real reasons are structural, psychological, and operational. They are visible long before the first project kickoff and measurable long before the first milestone review.
A transformation does not fail at go-live. It fails before the first line of code is written.
This article deconstructs the anatomy of failure with a pre-mortem lens: a forward-looking analysis of why transformations fail before they even start.
1. Misaligned Incentives: The Silent Killer
In most organizations, the people who sponsor the transformation do not feel its consequences, while the people who feel the consequences do not sponsor it. This creates a structural misalignment.
Executives are incentivized by short-term KPIs and quarterly financials. Transformation outcomes often materialize after several years. As a result, leaders sign off on ambitious targets without having skin in the game when the system goes live.
Meanwhile, middle managers see the risks. Their domain power, processes, and credibility are at stake. They are the operational gatekeepers, yet their incentives often reward stability, not disruption.
Academic research from London Business School shows that misaligned incentives are responsible for up to 35 percent of large-scale change failures. In procurement and supply chain contexts, this figure is even higher due to cross-functional complexity.
Result: everyone talks transformation. No one is motivated to execute it.
2. Political Sabotage Behind the Scenes
Transformations disrupt power. That alone is enough to trigger resistance. The idea of a unified leadership team driving a common agenda is a myth. Most leadership teams operate with local fiefdoms, historical grievances, and unspoken rivalries.
Common sabotage patterns include:
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withholding key resources
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delaying decisions to slow progress
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protecting legacy systems
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escalating minor issues to create project fatigue
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undermining the transformation team through informal networks
A Stanford study on organizational politics found that 45 percent of executives admit to actively blocking initiatives they perceive as threatening. The number is likely higher because respondents tend to underreport political behavior.
Technology does not fail. It is pushed off the table.
3. Loss of Critical Knowledge Before Kickoff
By the time a transformation starts, key knowledge has often already left the company. Lean programs, reorgs, and prior cost cutting create structural amnesia. The people who understood the legacy processes, integrations, and tacit workarounds are no longer there.
When the transformation begins, the organization assumes it understands its own processes. In reality, it understands the PowerPoint version of them.
Research on IT system migrations published in the Journal of Information Technology found that undocumented tribal knowledge increases failure probability by up to 48 percent. In S2P and P2P implementations, the risk is even more severe because integrations with Finance, IT, Logistics, and local teams are highly interdependent.
What you do not know hurts you. What you think you know hurts you more.
4. Tool Worship Instead of Operating Model Design
Companies often implement technology without designing the operating model that makes the technology work. The assumption is simple: the tool will fix the process.
This assumption is wrong.
A global Deloitte study showed that 62 percent of digital transformation budgets are spent on technology, while only 18 percent are allocated to process design, governance, and user enablement. The imbalance is structural and leads to predictable failure.
Common symptoms:
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the system becomes a digital copy of existing inefficiencies
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the governance model is not aligned with the workflows
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approval hierarchies mirror outdated power structures
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reporting is inconsistent with decision-making needs
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training is done too late and too superficially
The result is a system that is technically correct but operationally useless. It does not fail. It simply never performs.
5. Overengineered Processes Create Fragility
The corporate obsession with process standardization and zero deviation creates systems that look perfect in a slide deck but collapse in the real world.
Lean is valuable. Over-lean is dangerous.
Operations research from MIT demonstrates that systems optimized purely for efficiency become highly sensitive to variance. In supply chain terms: the slightest deviation causes disproportionate disruption.
During transformations, companies often:
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eliminate too many manual fallbacks
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reduce buffer zones
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centralize decisions that need local autonomy
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enforce strict approval flows without context awareness
What remains is a brittle system that breaks under everyday exceptions.
Efficiency without adaptability is fragility in disguise.
6. Change Fatigue and the Psychology of Resistance
Employees rarely resist change. They resist chaos. They resist uncertainty. They resist poorly managed transitions that increase workload without increasing clarity.
A survey by Gartner found that employees today experience three times more organizational change than a decade ago. Only 8 percent report high trust in leadership during change programs.
Resistance is not a behavioral issue. It is an emotional one.
The typical employee journey in large transformations involves:
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lack of transparency
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fear of job loss
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overwhelming cognitive load
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unclear expectations
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shifting priorities
By the time the new system launches, employees are mentally done. Adoption becomes a battle, and workarounds quietly resurface.
The transformation dies not because of resistance, but because people are exhausted before they are even asked to change.
7. The Illusion of Readiness
Organizations often rate their transformation readiness far higher than reality. A pre-mortem analysis by McKinsey shows that companies overestimate their digital maturity by up to 40 percent.
Symptoms of inflated readiness include:
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overconfidence in data quality
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belief in strong governance structures
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exaggerated claims of standardization
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underestimation of legacy complexity
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denial of political resistance
This creates a launch trajectory built on assumptions, not facts.
Pilot success is interpreted as full-scale readiness even though pilot environments are artificially controlled and politically safe.
What follows is the classic failure curve:
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initial enthusiasm
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first breakdowns blamed on technical issues
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scope reduction
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creeping disengagement
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silent burial of originally promised benefits
The transformation did not fail. The readiness assessment did.
Conclusion: Transformations Fail Early. Success Must Start Even Earlier.
A transformation is not a technology project. It is a psychological, organizational, and operational redesign effort.
Success starts long before go-live:
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align incentives
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address political realities
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secure domain knowledge
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design the operating model first
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build adaptable processes, not brittle ones
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manage change as a human journey
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validate readiness with ruthless honesty
Transformations fail because companies prepare for the technical part and ignore the human and organizational part. Technology is the easiest element. People and power are the real battlefield.
If organizations want to stop failing, they must stop pretending that transformation is a linear, tool-driven exercise. It is a systemic shift that demands courage, clarity, and brutal transparency.
Everything else is theater.
Call to Action
If your transformation is already struggling, you do not need another steering committee. You need clarity, courage, and a partner who has led complex S2P and organizational transformations across Europe, the US, and Asia with measurable outcomes.
If you want to understand where your transformation stands, what is blocking value, and how to turn a failing trajectory into a self funding success path, reach out.
Real transformation is not a PowerPoint promise. It is disciplined execution.
Make it rain.
“Digital tools do not break transformations. People, politics, and denial do. Fix that and transformation becomes execution.”
Claus Triolo, The Procurement Rainmaker
