For successfully executing digital transformation (DX) projects in a company, collaboration among various internal and external stakeholders is intrinsically crucial and key to success. However, there are various factors that can impede such collaborations, six of which were identified in this paper based on interviews with DX project stakeholders. Six impeding factors include information gap, experience gap, perception gap of the future, incompatible evaluation criteria, conflict of interest, and lack of mutual trust. Although previous studies have discussed superficial factors which directly explain the success or failure of such projects, this paper isolates and explores them in greater depth than the traditional ones. These essential impeding factors are helpful to find solutions to eliminate them and lead DX projects to success.

1. Copyright 2021, JAIST Naoshi Uchihira.
KICSS 2021
Session : Creativity Support and Collaborative III
The Nature of Digital Transformation Project
Failures: Impeding Factors to Stakeholder
Collaboration
1
Oct 25, 2021 14:45-15:10 (Thailand)
Naoshi Uchihira, Tatsuya Eimura
Japan Advanced Institute of Science &
Technology
uchihira@jaist.ac.jp 20 minutes
presentation

2. 2
Outline
The need for DX projects has
been widely recognized.
However, many DX projects
(84%) fail.
Stakeholder collaborations are
necessary for DX project
success. There are various
difficulties to stakeholder
collaborations.
We find 7 typical difficulty
patterns by interviews for six
experts involved in DX projects
We have identified six essential
impeding factors that cause these
difficulty patterns
We examine these impeding
factors and suggest possible
solutions to eliminate them.
Information Gap
Experience Gap
Perception of the
Future
Incompatible
Evaluation Criteria
Conflict of Interest
Lack of Mutual Trust
1. Current business takes priority and there
is no time for DX.
2. Return on investment cannot be explained.
3. The business operation division is not
aware of the intentions of top management
and the DX promotion division.
4. Data scientists don't know what's going
on in business operations.
5. Customers don't want to give their data to
IT vendors.
6. The business operation division is
satisfied with the current process.
7. Unclear purpose of AI implementation
triggered by the AI boom.
Impeding Factors Difficulty Patterns
Factorization is useful for
problem solving.
New Findings
DX: Digital Transformation

3. 3
Many DX projects fail!
Rogers, B.: Why 84% Of
Companies Fail at Digital
Transformation.
DX Projects Success
Failure
Unknown
Japanese Companies (IPA DX Report)
49.5
22.6
27.9

4. 4
Why DX fail? Gaps among Stakeholders
Executives
DX Promotion Div.
Operation Managers
Operation Staffs
Sense of
crisis
Discussion
with outside.
DX???
QCD is the
important.
No Concrete Image
Immediate Results
Different Priorities
No Motivation
Consultants
IT Venders
Imposing
solutions.
Less Operation Knowledge
Company

5. 5
Literature Review (1)
Success and failure factors of DX:
• [3] Davenport and Westerman (2018), Why so many high-profile
digital transformations fail.
• [4] Osmundsen et al. (2018), Digital Transformation: Drivers,
Success Factors, and Implications.
• [6] Mhlungu et al. (2019), The underlying factors of a successful
organisational digital transformation.
• [9] Stief et al. (2016), Transform to succeed: An empirical analysis
of digital transformation in firms.
Gaps and Impediments to stakeholder collaborations are
seldom discussed.

6. 6
Literature Review (2)
•Ikegami and Iijima [10] identified challenges in DX
promotion, which include the siloed nature of DX and lack
of an overall strategy.
•Bilgeri et al. [11] mentioned the difficulty of collaboration
between business units in large manufacturing companies.
•These studies mentioned that difficulties in stakeholder
collaboration are one of the primary factors of DX failures.
However, its root cause has not been comprehensively
analyzed.
This paper focuses on and analyzes the essential factors
impeding stakeholder collaborations.

7. 7
Research Method: Expert Interview and Qualitative Analysis
Company Attribute Division
A Electric Appliance
Manufacturer
DX Promotion Division
B Electric Appliance
Manufacturer
R&D Division
C Materials Manufacturer DX Promotion Division
D E-commerce Company In-house Systems Development
Division
E AI System Vender Executive
F Medical Outsourcing
Company
In-house Systems Development
Division
We classified and analyzed the impediments of DX projects
through semi-structured 1-2 hour online interviews for six experts
involved in DX projects at six Japanese companies.

8. 8
C
1
A F
A
2
B E
D
C
2
Code System
DX (Data Infrastructure)
DX (Business)
Organization
Top Management
Customer/User
Corporate Culture
Knowledge/Education
DX Challenges
Executive vs DX Promotion
DX Promotion vs Field
Field
DX Promotion
IT Venders
Sense of Urgency
Mission
Interviewees
Qualitative Analysis: Code Matrix (MAXQDA)

9. 9
7 Typical Difficulty Patterns
1. Current business takes priority and there is no time for DX.
(Business operations division and DX promotion division)
2. Return on investment cannot be explained.
(Business operations division and DX promotion division)
3. The business operations division is not aware of the intentions of top
management and the DX promotion division.
(Executives, DX promotion division, and business operations division)
4. Data scientists do not know what is going on in business operations.
(DX-related technology division and business operations division)
5. Customers do not want to give their data to IT vendors.
(IT vendor and business operations division)
6. The business operations division is satisfied with the current process.
(DX promotion division and business operations division)
7. Unclear purpose of AI implementation triggered by the AI boom.
(IT vendor and business operations division)

10. 10
7 Typical Difficulty Patterns
Executives
DX Promotion Div.
Operation Managers
Operation Staffs
Consultants
IT Venders
Company
①
②
④
⑥
③
⑤⑦

11. 11
Difficulty Pattern 1
Business operations div. ⇔ DX promotion div.
Current business takes priority and there is no
time for DX in business operations division.
“If you’re an IT engineer, you’re probably aware of AI.
However, I have the impression that the section of the
information system division I belong to has its hands full
with the work, rather than thinking about how to utilize AI.
They have an awareness of AI, but the word AI is almost
never mentioned in their work routine.” (Interviewee F)

12. 12
Difficulty Pattern 3
Executives+DX promotion div.⇔ Business
operations div.
The business operations division is not aware
of the intentions of top management and the
DX promotion division.
“Although the DX is being envisioned by the top
management and the DX promoters, it is not being
communicated well to the business operations division.
Also, there is an atmosphere that says why don’t we just
introduce it anyway?” (Interviewee A)

13. 13
Factorization
Difficulty
Pattern
Difficulty
Pattern
Difficulty
Pattern
Difficulty
Pattern
Difficulty
Pattern
Difficulty
Pattern
Difficulty
Pattern
There is a complex interplay of these difficulty types. It
is necessary to break them down into their more
fundamental elements in order to solve them.
Fundamental Elements

14. 14
Impeding Factors in Stakeholder Collaborations
•Group1: Knowledge Gap
–(1) information gap (explicit knowledge)
–(2) experience gap (tacit knowledge)
•Group2: Profit-loss Gap
–(3) incompatible evaluation criteria
–(4) conflict of interest
•Group3: Perception Gap
–(5) perception of the future
–(6) lack of mutual trust

15. 15
Knowledge Gap
Impediments Example
Information Gap
(Explicit
Knowledge)
The business operations division
is not aware of the latest AI
technology held by the DX
promotion division.
Experience Gap
(Tacit
Knowledge)
DX promotion division and IT
vendors try to promote DX with
idealism without knowing the
actual business operation.

16. 16
Profit-loss Gap
Impediments Example
Incompatible
Evaluation Criteria
The DX promotion division
wants to promote DX, but the
front line prioritizes the steady
execution of the current work.
Conflict of Interest IT vendors want all of
customers’ data, but
customers do not want to
provide their know-how to IT
vendors.

17. 17
Perception Gap
Impediments Example
Perception Gap of
the Future
The executives thinks that there
is no future if DX is not
promoted, but the front line
thinks that the current
extension is sufficient.
Lack of Mutual
Trust
Members may wonder if DX is
really going to work, but they
can go along with it if they trust
a leader in the DX project.

18. 18
Information Gap
(Explicit Knowledge)
Experience Gap
(Tacit Knowledge)
Perception of the
Future
Incompatible
Evaluation Criteria
Conflict of Interest
Lack of Mutual Trust
1. Current business takes priority and there
is no time for DX.
2. Return on investment cannot be explained.
3. The business operation division is not
aware of the intentions of top management
and the DX promotion division.
4. Data scientists don't know what's going on
in business operations.
5. Customers don't want to give their data to
IT vendors.
6. The business operation division is
satisfied with the current process.
7. Unclear purpose of AI implementation
triggered by the AI boom.
Impeding Factors Difficulty Patterns
Impeding Factors and Difficulty Patterns

19. 19
Discussion: How to Remove Impediments
(1) Information (Explicit Knowledge) Gap
It is unrealistic for people in the business operations division
to learn the latest AI. The poor absorptive capacity is one of
the causes of this gap. To bridge it, it is necessary to
translate the information appropriately.
(2) Experience (Tacit Knowledge) Gap
The experience knowledge has information stickiness. Close
interaction and mutual empathy can bridge this gap.
Personnel exchange is effective (veterans of the business
operations division move to the DX promotion division).
Business ethnography may also be an effective method.

20. 20
Discussion: How to Remove Impediments
(3) Incompatible Evaluation Criteria
If an organization’s existing evaluation criteria are not
compatible with DX promotion. The evaluation criteria need
to be changed.
(4) Conflict of Interest
An appropriate contract can make the promotion of DX
beneficial for both parties. A guideline authorized by the
government about a contract about data and AI model is
helpful.

21. 21
Discussion: How to Remove Impediments
(5) Perception Gap of the Future
It is critically important to develop and share a digital vision.
Digital leadership is required for its steady implementation.
Roadmapping is an effective dialog tool for filling recognition
gaps among the stakeholders.
(6) Lack of Mutual Trust
Mutual trust is formed on past achievements and
relationships. It is also important to implement “NEMAWASHI
(informal negotiation)” to gain trust of stakeholders.

22. 22
Difficulty
Pattern
Difficulty
Pattern
Difficulty
Pattern
Difficulty
Pattern
Difficulty
Pattern
Difficulty
Pattern
Difficulty
Pattern
Information Gap
(Explicit Knowledge)
Experience Gap
(Tacit Knowledge)
Perception of the
Future
Incompatible
Evaluation Criteria
Conflict of Interest Lack of Mutual Trust
Superficial Difficulty Patterns of Stakeholder Collaboration
Essential Impeding Factors
Measures and tools to remove impediments
Information
Translation
Business
Ethnography
Discussion: How to Remove Impediments
Evaluation
Criteria
Government
Guideline
Road-
mapping
NEMAWASHI

23. 23
Conclusion
Contribution
Although many previous studies have discussed the superficial
factors directly explaining the success or failure of DX, this
paper is unique in giving a new perspective on six essential
impeding factors to stakeholder collaboration. Factorization is
useful for problem solving.
limitation
There were only six interviewees in Japanese large companies.
In the future, we will increase the number of interviews and
expand the target companies (small and medium-sized
enterprises, companies in Europe, the U.S. and Asia).

24. 24
Thank you for your attention.