When should you pull the plug on a digital transformation project?

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Digital transformation is all the rage, with boardroom executives citing it as a priority. It’s particularly pertinent as they see their competitors ‘transform’ and fear being left behind. There’s a sense of urgency that isn’t always positive, though, with many projects a product of leaping on the bandwagon; digital transformation without giving thought to what they want to achieve and how best to do so. 

Many digital transformations come to an end when the core aims have been achieved. These may include instilling new skills, ways of working, or technological capabilities. But there are times when a project doesn’t go to plan and the best move is to cut it short.

Ending a failing digital transformation project prematurely isn’t an easy decision to make, as the sunk cost fallacy can be a huge issue, “but so is the fact the people at the top could feel like they’re also fighting for their jobs and influence”, notes Simon Cook, UK&I MD of Slalom Build.

Canceling should always be an option, however, as it’s pointless to waste time, manpower, and money continuing a project that simply won’t provide the outcomes it was designed to deliver.

The digital transformation warning signs

There are many warning signs to look for and the more you find, the more likely the project is doomed to fail. Examples include when the company strategy and focus have changed and the digital transformation initiative deviates from this; when a project is driven by a vendor; or “when the business case is littered with buzzwords and the project sponsor leaves or finds a shiny new headline to chase”, says BML Digital CTO Jaco Vermeulen.

One major red flag is a lack of buy-in from staff and/or executives. Resistance to change is normal, but if staff aren’t on board with a project, it’s pretty much doomed to fail.

“If staff don’t want to behave differently that’s a sign your organization doesn’t have the right mindset for change and no matter what processes or technology you introduce, the project is going to fail,” says Mark Sharp, organizational change consultant at consultancy firm Code Computerlove.


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“You need to see whether staff are excited by the change or resistant as that’s a signal whether the project will successfully embed in the organization.”

A growing number of roadblocks is another sign to watch for, as is when a project grows to become out of control. 

“If there is a sense of loss of control with no clear guidelines or checkpoints for stage delivery and review of achievements, or it no longer becomes clear as to what goal they are looking to achieve and key personnel has changed, then organizations need to press the pause or halt button to recentre the focus and goals,” says Bola Rotibi, chief of enterprise research at CCS Insight.

Have you underscoped or overscoped? 


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1. The company strategy and focus has changed dramatically

2. When a project is driven by the vendor

3. The business case is littered with meaningless buzzwords

4. The project sponsor abandons ship

5. Staff or executives don't buy into it

6. More and more roadblocks form

7. You feel the sense of losing control

Most red flags can be explained by a project that’s been underscoped or overscoped, explains Dale Vile, CEO of research and analyst firm Freeform Dynamics. 

“It’s all well and good being part of an organization coming up with a great idea, but there’s always a knock-on effect on other areas,” Vile explains. “If other departments can’t follow through on what the project’s instigators are doing – whether that’s down to bandwidth, tools or processes – then the project has been underscoped and is likely to fail, as you end up making compromises and shortcuts. 

“Too often digital transformation projects are approached as departmental incentives. These end up discovering dependencies as they go, leading to resource problems and political wrangling.”

At the other end of the spectrum, overly broad project scopes can be just as problematic. These often come from the top, when a boardroom decides that the organization needs to ‘digitally transform’ and tries to do everything, all at once. 

“These kinds of projects have never been deliverable,” Vile notes. “If you’re getting bogged down in politics, commitment issues, or you can’t get all the moving parts to behave, that’s probably a sign you’ve over-scoped and need to pause and consider killing the project.”

Assess the project and adapt accordingly

If you’ve spotted red flags such as these, it’s time to assess whether the project should be canceled. Laurence Buchanan, partner and global customer and growth leader at EY, recommends making this decision based on a comprehensive assessment of the project’s alignment with strategic objectives, measurable impact, stakeholder engagement, and the organization’s evolving needs. 

“It’s crucial to approach the decision with careful consideration,” says Bauchanan. “Conduct a detailed cost-benefit analysis to understand the financial implications of ending a project early, engage key stakeholders to gather perspectives and insights and explore alternative options to salvage or redirect the existing investment.”

Take time out to discuss what is and isn’t working, and why, notes Jessica Sherratt, head of user experience at Code Computerlove.

“If you’re already down the rabbit hole then pause, go back to the business and communicate that it’s not going as planned – and ask for feedback,” she says. “As a project leader, it's okay to be vulnerable. You’re likely to get more people on board and feel they have a stake in its success next time around.”

Indeed, you can often reshape a project rather than kill it entirely, Cook adds. “In a prior role, I worked on a project that was canceled when it became evident the digital transformation put in place wasn’t going to deliver enough benefits, and that there was a decreasing level of trust between different teams’ ability to deliver on their commitments. 

“To remedy the problem, we switched our approach from one big project to a smaller, nimble set of micro-projects that would deliver value incrementally instead of rewriting the core IT with one huge digital refresh,” he explains. “Essentially the business pivoted from a ‘big bang’ overhaul that would have aimed to deliver all the value in one go, to a set of smaller workstreams that would deliver smaller slices of value over time, but was much more manageable and actionable.”

But there are occasions when a digital transformation project needs to be canceled entirely, and that’s also okay. In these scenarios, the best thing is to learn from the experience. “Conducting a thorough analysis to identify the root causes of the project’s challenges or shortcomings can inform future projects, improve decision-making and mitigate similar risks in subsequent initiatives”, Buchanan concludes.

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Keri Allan

Keri Allan is a freelancer with 20 years of experience writing about technology and has written for publications including the Guardian, the Sunday Times, CIO, E&T and Arabian Computer News. She specialises in areas including the cloud, IoT, AI, machine learning and digital transformation.