THE PATTERN is familiar to anyone who has led, sponsored, or lived through a digital transformation initiative. A new enterprise system is selected. A technology vendor is engaged. A go-live date is announced. Project teams work around the clock. The platform launches successfully. Dashboards light up. Users attend training. The project is declared complete.
Then, three to eight months later, something unexpected happens.
The promised productivity gains fail to appear. Customer experience improves only marginally. Employees quietly return to spreadsheets. Shadow processes re-emerge. AI tools sit underutilized. Leaders begin questioning the return on investment. The technology works exactly as designed, yet the transformation feels incomplete.
The initiative has not failed technically. It has stalled organizationally.
A 2026 doctoral study by Susan D. Landes offers clear evidence that the greatest risks to digital transformation remain organizational, not technological. Drawing on the lived experiences of U.S. project managers who had led both successful and failed digital initiatives, the research found failure rates ranging from 66% to 84%. The dominant themes that emerged had little to do with software or infrastructure: lack of preparation, ineffective change management, unrealistic business expectations, poor organizational collaboration, insufficient transparency early on, underestimation of time and requirements, weak communication among stakeholders, and inadequate attention to user experience.
Despite decades of technology investment and continuous innovation, organizations continue to approach transformation primarily through the lenses of technology, information systems, and project management. Far less attention is paid to the human, structural, and behavioral dimensions of change. The result is a persistently high failure rate that multiple studies still place between 70% and 88%.
More importantly, many organizations focus heavily on implementation while giving far less attention to what happens after go-live. The post-implementation phase—where employees must adopt new behaviors, leaders must reinforce change, and organizations must embed new ways of working—remains one of the least understood aspects of transformation. This creates a dangerous assumption: once a system is deployed, transformation has been achieved. In reality, implementation marks the beginning rather than the end of the journey.
Across industries, the same mistakes occur. Organizations invest heavily in digital platforms while underinvesting in the capabilities, structures, and cultural shifts required to sustain them. Digital transformation is ultimately an organizational challenge that happens to involve technology—not a technology challenge that happens to involve people.
The most important insight is the need to shift attention from technology adoption to transformation sustainability. Organizations do not fail because they lack digital tools. They fail because they underestimate the complexity of embedding those tools into everyday work. Technology may initiate transformation, but leadership, capability building, organizational alignment, and people adoption determine whether it ultimately succeeds or stalls.
The real failure in digital transformation is almost never a technology failure. It is a people failure dressed up in a technology story.
This pattern repeats across industries and geographies—in shipping companies deploying fleet management systems, insurance firms implementing AI-driven underwriting, manufacturers digitalizing operations, and government agencies building knowledge management platforms. Across transformation diagnostics in the Philippines and other countries globally, one conclusion consistently emerges: The technology is usually ready long before the organization is.
Despite unprecedented spending on digital transformation, failure rates remain remarkably consistent. Global studies continue to report that approximately 70% of digital transformation initiatives fail to achieve their intended objectives. Bain & Company’s research has found that 88% of business transformations fall short of their original ambitions. The financial cost of these failures is measured in trillions of dollars annually. The persistence of these figures is especially striking because organizations today have access to better technology than ever before—cloud platforms are mature, AI capabilities are more accessible, and enterprise applications are increasingly user-friendly. Technology barriers continue to fall, yet transformation outcomes remain stubbornly inconsistent. This suggests the problem lies somewhere other than the technology itself.
Insights from the field
Observations from digital transformation engagements led by P&A Grant Thornton’s Advisory Services digital transformation team across Philippine-based and Asia Pacific clients reveal a consistent pattern: organizations often approach transformation with a technology-first mindset, focusing on platforms, automation, AI, and implementation timelines while assuming technology will resolve operational challenges. Yet deeper assessments frequently uncover underlying organizational gaps, including poorly understood processes, workflows that have never been mapped or optimized, and project teams with limited experience in transformation, change management, or process improvement. As a result, digital transformation becomes synonymous with system implementation rather than the broader organizational change required to deliver sustainable value.
The team also frequently encounters organizations without a clear digital transformation roadmap. Initiatives are launched in response to immediate pain points instead of a coherent enterprise strategy. Functional leaders pursue separate digital solutions, resulting in fragmented systems, disconnected data, duplicated effort, and competing priorities. Technology is acquired, but fundamental questions remain unanswered:
- What business outcomes are we trying to achieve?
- Which processes require redesign?
- What organizational capabilities must be built?
- How will success be measured?
Technology investments proceed even though these questions remain unresolved. The result is predictable. Applications are successfully implemented, yet performance improvements remain limited. Customer experiences change only slightly. Employees find workarounds. Leaders become frustrated. The technology works, but the organization fails to realize its intended value.
The three hidden culprits
Organizational diagnostics consistently reveal three culprits that technology cannot solve on its own.
- Change readiness is treated as a checkbox rather than a strategy.
Organizations conduct awareness sessions, provide training materials, and assume readiness has been achieved. But awareness does not create adoption. People must understand, accept, and commit to new ways of working before meaningful transformation occurs. - Processes are digitalized before they are optimized.
This is among the most expensive mistakes in digital transformation. Organizations automate inefficient processes and then wonder why problems persist. Digitalization amplifies existing realities. Efficient processes improve. Inefficient processes simply become faster at producing poor outcomes. - Organizational development is missing from the transformation agenda.
Technology, systems, and infrastructure receive investment. People systems often do not. Yet organizational development is the discipline that aligns culture, structure, leadership, capability, and behavior with strategic objectives. Without it, organizations achieve compliance without commitment, adoption without integration, and implementation without transformation.
The framework that changes the outcome
Across successful transformation programs, a common pattern consistently emerges. It can be summarized in three words: Optimize. Align. Develop.
- Optimize first. Before deploying technology, redesign the process. Understand how work should ideally flow. Eliminate inefficiencies. Simplify decision points. Then design technology to support the improved process.
- Align next. Ensure leadership sponsorship, stakeholder commitment, and change management remain active throughout the journey. Alignment is not a launch activity. It is an ongoing leadership responsibility.
- Develop continuously. Build digital literacy. Strengthen leadership capability. Develop learning systems. Invest in change resilience and organizational agility. Organizations must continuously increase their ability to absorb and adapt to technological change.
Digitalize a well-designed process, support it with aligned leadership, and develop the people who run it, and technology finally delivers what it promised.
The honest conversation we need to have
Digital transformation has often been presented as a technology challenge. In reality, it is an organizational challenge enabled by technology.
Successful digital transformation projects are rarely distinguished by having the most advanced technology stacks. Instead, they are the ones that invested as seriously in people, process, leadership, and culture as they did in platforms and applications. Their leaders understood something fundamental: transformation is not a software project. It is an organizational capability.
Before every technology investment, leaders should ask a different question. Not “What technology should we deploy?”, but “Are our people, processes, leadership systems, and culture ready to absorb and sustain this change?”
The answer to that question will determine success far more than the technology selected. Because the real reason most digital transformations stall has nothing to do with technology.
It never did.
Mithi Sandalo is a Director for the Advisory Services Practice Area at P&A Grant Thornton. One of the leading audit, tax, advisory, and outsourcing firms in the Philippines, P&A Grant Thornton is composed of 29 Partners and 1,500 staff members. We’d like to hear from you! Connect with us on LinkedIn and like us on Facebook: P&A Grant Thornton and email your comments to business.development@ph.gt.com. For more information, visit our website: www.grantthornton.com.ph.
