Why I Believe Digital Transformation Is Dying in 2025

As someone who has spent decades helping organizations navigate the complexities of digital transformation, it may sound strange to hear me say this: digital transformation is dying. Yes, you read that right. Even as the market continues to pour trillions into new technology, software, and cloud migrations, the reality is that traditional digital transformation as we’ve known it is fading away.

In fact, here in 2025, the term "digital transformation" has become more of a buzzword than a meaningful initiative. And despite the fact that Third Stage Consulting is squarely in the business of helping clients through their transformations, I believe the way we talk about and execute digital transformation needs to fundamentally change.

Let me explain why. You can also hear more in my new video below:

The Myth of “Digital” in Digital Transformation

The first sign that digital transformation is dying lies in the name itself. “Digital” is wildly overrated.

When organizations hear the term "digital transformation," they often default to thinking about software, cloud platforms, or AI. Technology becomes the star of the show. But this is a fundamental misunderstanding of what true transformation is about.

Digital transformation should never be about the technology itself. It should be about how your organization operates, how your people work, how your business processes evolve, and how your customers are served. Technology is merely a tool—a means to an end, not the end itself.

This misconception is one of the main reasons so many transformations are failing. Organizations are pouring millions—or even billions—into new technology, only to discover that nothing really changed. The business didn’t improve. The ROI didn’t materialize. The workforce is confused or resistant. And most of all, no one thought to change the human and process side of the equation.

We’ve Been Here Before

This current wave of hype reminds me of the late 1990s, when companies scrambled to upgrade systems for Y2K. Back then, the IT industry created a perfect storm of fear—warning that systems would fail and business would come to a grinding halt when the year 2000 hit. Organizations rushed to implement new systems, often without a clear business reason, and the result? Not much happened when the clock struck midnight.

Fast forward to today. Big software vendors are using the same fear-based playbook. This time, it’s the supposed urgency of moving to the cloud. They’re forcing clients into cloud migrations under the guise of staying modern and relevant, yet the business case for doing so is often weak or even nonexistent.

Too many organizations are making massive investments in cloud technologies without stopping to ask: Do we really need this? Will this actually make our business better? And most importantly: Are our people and processes ready for this change?

The truth is, many organizations could drive significant performance improvements simply by better leveraging the technology they already have. They don’t need the latest and greatest—at least not yet. What they need is better adoption, better training, and more focus on how the technology enables their people to work smarter and more effectively.

People and Process are the Real Drivers of Transformation

Let’s be clear—yes, technology matters. But it’s the people and the business processes that make or break a transformation.

One of the biggest sources of untapped value in any organization is the ability to fine-tune existing processes and elevate human performance. I've worked with companies who achieved massive performance gains simply by aligning their teams, removing manual inefficiencies, and optimizing workflows—without ever changing their core systems.

Digital transformation, at its heart, should be about creating better ways of working. That may involve new tools, sure. But without clear alignment around people, process, and purpose, the technology becomes a very expensive distraction.

Let’s look at just a few of the people- and process-related efforts that can deliver real transformation:

• Business process improvement: Eliminating bottlenecks, manual tasks, and redundant activities

• Organizational change management: Guiding teams through the journey of change, with clear communication and engagement

• Training and enablement: Helping users truly understand and embrace the tools at their disposal

• Performance optimization: Creating a culture of continuous improvement where people feel empowered to challenge the status quo

These aren't tech investments. They're human investments. And they’re often far more powerful than any new software release or system upgrade.

The Futility of Long-Term, Big-Bang Transformations

Another reason I believe digital transformation is dying has to do with the way most organizations still approach it.

For decades, companies have built massive multi-year transformation plans—big-bang programs where everything changes over a three- to five-year timeline. But in today’s rapidly changing world, that’s simply not realistic.

Here’s the problem: you can’t predict what your business will look like five years from now. You don’t know what market conditions will be. You can’t anticipate mergers, acquisitions, leadership changes, or economic disruptions. If we’ve learned anything from events like COVID, it’s that agility beats rigidity every time.

Too many transformation projects are derailed by unexpected changes. I’ve seen clients completely upend their roadmap mid-project because of things like:

• A corporate acquisition or merger

• A leadership change or strategic pivot

• Financial pressures that force budget cuts

• Global events or supply chain disruptions

These shifts happen constantly, and they throw traditional transformation plans into chaos. That’s why organizations need a new model—one that embraces agility, incrementalism, and composability.

AI and Composable ERP Are Changing the Game

Ironically, it’s two of the most hyped technologies of 2025—AI and composable ERP—that are also contributing to the death of traditional digital transformation.

Instead of relying on a monolithic ERP system rolled out over several years, more and more organizations are adopting composable ERP strategies. This means selecting modular, best-of-breed solutions that integrate into a flexible ecosystem. Companies are no longer locked into a single vendor or a single technology platform—they can build the stack that best supports their unique business needs.

Meanwhile, AI is enabling smart automation, predictive insights, and decision support across the enterprise. These capabilities can be layered onto existing systems, enhancing performance without requiring a rip-and-replace approach.

Both AI and composable ERP encourage a new mindset—one that values quick wins, iterative improvements, and scalable change. They allow organizations to test, learn, and evolve without betting the farm on a single transformation initiative.

This shift is long overdue. The old approach of “let’s transform everything at once” is no longer sustainable—or necessary.

So What Comes Next?

If digital transformation is dying, what takes its place?

I believe we’re entering an era of continuous transformation. This means:

• Letting go of the idea that transformation has a clear beginning and end

• Moving away from massive capital-intensive projects toward smaller, faster, and more frequent improvements

• Centering transformation around people, not technology

• Using technology strategically—as a tool to support business goals, not drive them

• Building flexible roadmaps that evolve as your business evolves

This isn’t just a new strategy—it’s a new mindset. And it’s the only way to thrive in a world where change is the only constant.

At Third Stage Consulting, we’ve already started helping clients adopt this new approach. We still work on technology implementations, of course. But we lead with strategy, governance, change, process, and architecture. We build transformations that are resilient, adaptive, and human-centered. And we measure success not by go-lives, but by business outcomes.

In Conclusion

Digital transformation as we’ve known it is dying—and that’s a good thing. The world has changed. Business has changed. Technology has changed. Now it’s time for our approach to change, too.

The future isn’t about digital. It’s about transformation—real, lasting transformation that starts with people, is powered by process, and is supported (not driven) by technology.

As we move forward into this new era, I encourage you to rethink your transformation strategy. Ask yourself:

• Are we chasing shiny objects, or are we solving real problems?

• Are we focused on people and process, or are we letting vendors and software dictate our future?

• Are we building agility into our transformation, or locking ourselves into outdated plans?

These are the questions that will define the next generation of transformation leaders.

And if you want a place to start, I invite you to check out our Digital Transformation Report—a comprehensive guide to the best technologies, strategies, and practices for success in today’s fast-changing landscape. You’ll find software rankings, independent reviews, case studies, and best practices for leading your organization through meaningful change.

The era of flashy tech-driven transformation is over. The era of smart, strategic, and human-centered transformation is just beginning.

Let’s embrace it—together.