When Digital Transformation Meets Reality: Lessons Learned over 25 years of experience

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Digital transformation has become a buzzword for businesses aspiring to stay competitive in a fast-evolving landscape. Yet, 70% of digital transformation projects fail, leaving organizations with wasted resources, missed opportunities, and frustration. This staggering statistic becomes even more critical when examining its impact on manufacturing and supply chains, where inefficiencies can cascade into significant financial and operational losses.

A closer look reveals that the consulting industry—dominated by Big firms—plays a significant role in these failures. Despite their size and reputation, these firms often perpetuate the very inefficiencies they claim to solve. Drawing from personal experiences, this article explores how large consulting firms contribute to these failures, why their strategies fall short, and how smaller, agile firms paired with powerful technology providers like AWS can drive real results.

The 70% Failure Rate we all know: A Wake-Up Call just connect the dots
When digital transformations fail, the consequences are not confined to delayed timelines or inflated budgets. In manufacturing and supply chains, failure can disrupt production schedules, create bottlenecks, and erode customer trust. Despite ambitious goals, many companies fall short due to:

• Unrealistic Expectations: Projects kick off with grandiose promises but lack a clear, actionable plan.
• Poor Execution: The gap between strategy and operational realities is often ignored.
• Resistance to Change: Employees, left out of the process, resist adopting new technologies.
• Bloated Project Teams: Overstaffed consulting teams create inefficiencies and inflate costs.
• Disconnected Leadership: Executives often sign off on plans without engaging those who truly understand the day-to-day complexities.

This failure rate is especially damaging in manufacturing and supply chains, where precision, cost control, and responsiveness are paramount.

Big Consulting Firms: Part of the Problem or part of the solution?

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Early in my career, I learned the invaluable saying, "You're either part of the problem or part of the solution." This wisdom shaped my approach to transformation, teaching me to quickly assess not only my own role but also the alignment of consultants, teams, and stakeholders. Connecting the dots—understanding motives, challenges, and dynamics—has been crucial in driving successful outcomes. Transformation efforts demand clarity on where everyone stands, as misalignment can derail even the best intentions. By identifying problem-solvers and barriers early, I’ve been able to foster collaboration and ensure that everyone contributes to a shared vision of meaningful change.

Large consulting firms present themselves as the ultimate solution to digital transformation challenges, but their approach often exacerbates the problem. They arrive with dazzling presentations, colorful charts, and promises of intergalactic savings—but these rarely materialize.

The “Army in the Room” Problem
In one project, a Big firm was hired to optimize a supply chain. What should have been a lean, expert-led initiative instead became an overstaffed circus. The firm deployed an “army” of consultants—six to ten people for a relatively straightforward engagement. Most sat silently in meetings, contributing little beyond their hefty billable rates.

The Monday Morning Anecdote
One particularly egregious case involved a senior consultant who arrived late to a critical Monday morning meeting—well after discussions had begun. She arrived like dressed to kill, with the Grande coffee on her hand from the brand you imagine now, speaking like that, like the world does not deserve her magnificent presence because she is so executive and everyone else is just a mortal. She contributed very little, adding minimal or no value, often repeating points already addressed in prior not those successful interactions, and left by lunchtime to catch a flight to another client site. Despite her lackluster performance, her travel and living expenses were charged to the project, adding unnecessary costs and compounding frustrations.

These inefficiencies drive up costs and derail progress, leaving organizations no closer to achieving their transformation goals.

C-Level Hostage-Taking: Selling them Illusions, Not Solutions
Big consulting firms excel at captivating C-level executives with flashy PowerPoint slides and promises of spectacular savings. These proposals, however, often highlight benefits that are disconnected from operational realities.

In one anecdote, a Big firm sold a multimillion-dollar “transformation” initiative that promised groundbreaking innovation and savings. However, when the plan failed to deliver, the consultants deftly blamed internal teams for resistance to change, leaving the executives to clean up the mess. This “strategic-only” approach creates a dangerous dynamic: consultants isolate leadership from operational teams, controlling the narrative while ignoring the voices of those who understand the company’s day-to-day complexities.

When Big Consultants Play Builders: Shoemaker, stick to your shoes!
In Spanish, we have a saying, "Zapatero a tus zapatos," which translates to "Shoemaker, stick to your shoes." It means that people should focus on what they know best and not venture into areas outside their expertise. This phrase has guided my approach in transformation projects, reminding me of the importance of relying on true subject matter experts and recognizing the limits of one’s knowledge. It underscores the value of respecting specialized skills, ensuring that each person or team contributes where they add the most value, rather than overreaching and risking inefficiencies or failure.

Some Big firms have attempted to expand their offerings by not just recommending solutions but also building them. One such effort involved a firm pitching itself as both strategist and software developer for a large-scale project. Despite their confidence, the results were disastrous. The firm struggled to meet deadlines, delivered a clunky, inefficient system, and ultimately failed to deploy a functional solution. Their lack of real-world experience in software development became painfully clear. The company eventually replaced them with a dedicated tech provider, but not before wasting millions on an unusable system.

The Case for Smaller Consulting Firms
Unlike their larger counterparts, smaller consulting firms don’t rely on brand recognition to secure clients. Their success depends on delivering real results—and fast.

Why Smaller Firms Succeed

• Expert-Led Engagements: Lean teams of hands-on experts actively contribute in every meeting.
• Agility: They adapt quickly to changes, avoiding bureaucratic delays.
• Cost-Effectiveness: With minimal overhead, they focus on value over billable hours.
• Real Collaboration: Smaller firms integrate with internal teams, valuing operational insights and fostering collaboration.

Their survival hinges on their reputation for delivering measurable results.

The Role of Technology: AWS as a Game-Changer
The efforts of smaller firms are amplified by leveraging powerful technologies like AWS Cloud. AWS provides the infrastructure, scalability, and tools necessary to execute digital transformations effectively.

Key Benefits of AWS

• Scalability: Handles large datasets and simulations with ease.
• Speed: Reduces deployment timelines, delivering faster results.
• Expert Advisory Services: AWS offers hands-on guidance, ensuring solutions align with organizational goals.

By combining the expertise of smaller firms with the technological might of AWS, businesses can achieve real, tangible outcomes.

Avoiding the 70% Trap: A Balanced Approach
To escape the cycle of failed digital transformations, organizations must rethink their approach:

• Engage Smaller Firms: Choose consulting partners who prioritize results over spectacle.
• Keep Internal Voices in the Room: Value the insights of operational experts.
• Leverage Cloud Technology: Use scalable solutions like AWS to support agile execution.
• Stay Involved as a Leader: C-level executives must maintain balance, listening to both consultants and internal teams.

Conclusion: Smarter Choices for Smarter Transformations
Digital transformation failures often stem from choosing the wrong execution partners. Large consulting firms may dazzle with their presentations, but their inefficiencies and disconnect from operational realities often lead to failure.

By partnering with smaller, agile firms and leveraging robust technologies like AWS, organizations can break free from the 70% failure rate. Real transformation happens when strategy meets execution, and when operational voices are valued alongside strategic visions.

The lesson? Success doesn’t come from dazzling presentations but from grounded execution. Transformation, when done right, becomes an opportunity—not a statistic.