Many failures at a high cost

Today, digital processes and transactions support communication throughout society. Innovations are continuously launched: most fail, but some succeed. Continuously over time, survey results independent of country context show that around two thirds of all digitalisation implementation projects are perceived as failures. Despite all knowledge generated and experiences gained over time, these negative implementation and effect statistics do not improve over time. High costs often are associated with digital business implementation processes, which often are irreversible.

The human factor is a critical success condition

Implementing digital business is a knowledge-intensive process, which involves a wide range of stakeholders with diverse knowledge capabilities. People are the most significant potential capability of a firm. The human factor is ubiquitous. Odd Fredriksson finds that the capabilities and motivations of the humans involved - the human or people factor - at different levels of analysis, is the number one condition influencing the successful implementation and use of a new digital business.

1. Competence

The individual competence quality of top managers, co-workers, and external consultants is an influential condition. Choosing the appropriate external consultants, as well as to allocate sufficient resources to develop implementation champions is also very important.

2. Behaviour

Ineffective social and behavioural conditions are more important causes for implementation failures than technical conditions. High top management commitment and organisation-wide commitment are necessary internal driving conditions. The early commitment of users is a critical enabler of user-driven system development.

3. Team composition

The presence of inter-firm top management bonds and commitment is typically a necessary pre-condition and driving condition. A clearly communicated project organisation, and symbiosis between the participants in the client-consultant project team, is required for successful implementation processes. Strong personal chemistry between project team leaders and top management is a critical success condition for digital business implementation projects.

4. Communication

Effective and extensive human communication is a crucial pre-condition for effective implementation processes.

Successful examples lead the way

Many studies show that managers over time have underestimated the crucial importance of managing human conditions concerning all stakeholders involved to improve the degree of digitalisation success. Digital business success is a multi-dimensional concept: What is acknowledged as successful depends on who is asked. It is therefore relevant to consider different perceived degrees of success among the different stakeholders involved in a specific digital business system. There is much to learn from successful examples. The digital business cases being studied in this dissertation were all perceived as success stories by the focal case organisations. Given the upsettingly high failure rates and the high implementation costs, the dissertation concerns a highly topical and important problem. Further research could explore what technological risks may impede the attainment of the intended business effect goals from digital business use, and how incentives should be designed for all involved stakeholders to provide them with fair shares of the benefits attained from digital business use.

For more information, please contact:

Odd Fredriksson, Researcher
E-mail: odd.fredriksson@kau.se
Phone: 0706 - 83 72 27

Download the doctoral dissertation Electronic Business − Implementation and Effects

Odd Fredriksson has a Ph.D. from Stockholm School of Economics and is a teacher at Karlstad Business School. Odd Fredriksson’s main research interests are in the intersection area of primarily marketing and IS perspectives on implementation, diffusion, and business value effects from use of digital innovations.