How much did DX failure cost in 2020?

Despite a renewed drive to get DX over the line, four in five projects faced failure, delays, or scaled back plans.
6 January 2021 | 1 Shares
  • Businesses across industries accelerated digital transformation efforts in 2020
  • But that didn’t come without challenges. Projects faced setbacks and failures at great expense
  • With hard lessons learned and investments made, 2021 should see businesses settling into new ways of operating

The pandemic knocked the throttle forward on digital transformation projects for businesses, but it didn’t make it any easier. 

According to research by Couchbase, remote working demands served to catalyze DX projects that were previously dragging. The rate of innovation, or the number of projects driven by an original idea within a business, almost doubled from 8% in 2019 to 14% in 2020. 

During this time, more than three-quarters of businesses had to make noticeable or major changes to their existing DX plans, or start afresh entirely. 

And even in the face of all the challenges thrown at them amid the pandemic last year, businesses were still able to make significant improvements to end-user experiences.

But despite a renewed drive to get DX projects over the line, nearly four in five (79%) faced failure, delays, or scaled back plans.

The cost of this overall failure to launch the first time? A staggering US$5.5 million per enterprise, according to Couchbase.

That’s a hefty figure, but the cost isn’t just financial. According to the report, 72% of organizations had to push their strategic goals back by more than a month, or reset them completely because of issues with digital transformation. 

It’s not all bad, though. While it may have been a costly one for many reasons, 2020 could have been the year that slow-off-the-mark DX projects were finally ditched in favor of workable projects, albeit following some hard lessons. 

“COVID-19 was a unique event: many of the challenges organizations face are far more deep-seated,” said Ravi Mayuram, SVP of Engineering and CTO at Couchbase

“Organizations that have worked so hard to adapt and succeed in 2020 should not see their gains lost because of issues that have been known for years. Instead, they should make sure they have the resources they need to build upon their experiences and truly succeed in digital transformation. This means having the technology, the skills, and the investment that will help drive innovation to new heights.”

Last year, the average digital transformation spend grew from US$27 million per organization in 2019 to US$27.5 million in 2020, despite budgets being cut amid the economic uncertainty. If 2020 was an inflection point for business digitization, 2021 will be the first step forward.

“Enterprises understand that the real test will be in how they adapt to life and business in 2021 and beyond,” said Mayuram.

“The underlying issues that were preventing modernization of an aging digital stack have been brought to the forefront by the pandemic, and there is now even greater impetus to accelerate digital transformation.”

The world of business has faced a realization that aging infrastructure will not serve new post-pandemic needs, where we all live, work, and play remotely, Mayuram added, tipping the scales in favor of new investments in innovation and modernization.