Why Digitalization Projects Fail In 50% Of Cases?

According to the Gartner CIO Outlook 2025, digitalization projects fail in 50% of cases!

This is a key finding of Gartner’s CIO outlook for 2025, and it made me reflect.

According to Gartner, the turnaround can be made if the entire CxO Team works together on digitalization topics.

The issue of failing digitalization projects gets more severe as AI evolves, and Gartner also elaborates that 50% of CIOs are left alone with topics around AI.

Why are digitalization projects failing at 50%?

Digitalization and AI in particular are topics spanning over the entire organization, and for quite some time, I postulate that they should be directly involved when defining strategy, business model, and offerings.

Let’s have a look at the different CxO roles directly involved with technology, providing an idea of a modern setup.

CDO – Chief Digital Officer

I suggest that the Chief Digital Officer is responsible for the hightest level view on digitalization.

I would position him as a visionary and researcher.

He and his team should coach the C-Level about general trends and trends relevant to the business while also elaborating on scenarios within new biz topics.

His duty is to make sure the company does not miss out on new trends.

Besides focusing on the outside world, he should be provided with company internal data about available skills of the workforce to understand the need for reskilling or hiring/firing in case of strategic initiatives.

CIO – Chief Information Officer

In comparison to the CDO, the CIO should focus on the internal part of digitalization in the company.

He should take the lead on all concrete digitalization topics inside the organization and concerning serving clients to harmonize the infrastructure and used techniques and make sure state-of-the-art is implemented.

He should be coordinating projects over the entire organization, and it would make sense to have project managers of technical projects report to him.

CTO – Chief Technical Officer

The CTO should be a specialist, deeply involved in all technological topics between code base, tech stack selection, and interface engineering. He should act as an advisor to the CIO and be consulted for detailed implementation questions.

He should also be directly involved with the skill distribution of the technically oriented workforce and coach tech leads.

CSIO – Chief Security Information Officer

As security has to be one of the top concerns of organizations, the CSIO becomes highly relevant in a modern setup.

He needs to make sure IT governance is established, constantly screened/updated, and harmonized over the entire organization.

Additionally, he has to ensure security standards are implemented, and his team can support when the organization is attacked.

Backup scenarios, insurance contracts, and continuance plans in case of attacks have to be elaborated to minimize financial- and reputational damage.

COO – Chief Operation Officer

The COO is involved in the digitalization topic, as he is responsible for running the entire infrastructure of the organization, from user laptops to servers to facility management.

These roles actually run the show concerning digitalization and serve the other units.

Depending on the size of the organization, it can be required that several of these roles be covered by a single person. In this case, the different perspectives still have to be covered as well to ensure building a culture of digitalization.

Gartner’s data-based conclusion is that digitalization projects succeed at more than 70% if the entire CxO team works together!

It can make sense to have technical specialists directly attached to other departments to ensure speed of implementation. Still, the technical CxOs need to be involved to avoid disharmonization and security risks.

Marketing CMO

Modern marketing is more and more driven by data topics, and technical projects need to be implemented fast to position and anchor the brand and offering in the market.

Risk CRO

Besides classical risks where AI, depending on the business model and its data intensity, should be involved, ongoing digitalization requires elaborating on technical risks through system failures and attacks.

Finances CFO

The financial department is a consumer of the ERP data, and a modern organization needs strong tools to understand the figures in detail, so AI on the ERP level will be highly relevant.

In many companies, ERP systems are far from integrated into the processes, and data reporting is still handled in spreadsheets with a lot of manual activity.

Reporting is one side of the coin, but if the data is not available, prognostics of the future to anticipate actions and risks are completely out of reach.

Business Units

Depending on the business model of an organization, specialized digital infrastructure is required to provide services and products, so business units as classical Profit Centers need to build and maintain relevant technical infrastructures together with the technical CxO departments, also relying on their expertise. I am convinced that for most Business Units, it is crucial to go digital first to be able to compete.

Specialists might have a practical view on technological topics, but it is a high risk if they don’t interact with the technical CxO departments.
Especially the CDO should be involved in new business initiatives to ensure the right focus and include the bigger picture of the digitalization context.

Involving the CIO is crucial to make sure initiatives are doable, and resource planning is involved.

Culture and Education

Many digitalization projects focus strongly on the culture inside the organization. Employees are busy with daily business, and if the organization doesn’t prioritize education, the workforce will not dedicate their time to reskill. It is crucial to implement a culture of exchange and establish leadership to streamline education and avoid losing focus.

Conclusion

Digitalization and AI spread into every part of the company!

To centralize the gathering of know-how and experience in the technical departments is highly recommended, but it has to be ensured that this knowledge is spread within all other departments and business units.

Just setting up a team inside business units and non-technical departments to cover the implementation is not enough. The strategists and top management layer have to push and prioritize digitalization and AI to support the digitalization projects of the organization.