Six Digital Transformation Challenges

It is vital that all businesses, large or small, take on the challenge of digital transformation in today’s world. The COVID-19 pandemic has ushered in a new urgency to speed up digital transformation activities. However, many business leaders are not clear on just what digital transformation entails. 

Does it simply mean that everything needs to be moved to the cloud?

Are the services of a consulting company required?

Do new jobs need to be created to help deploy the transformation?

What parts of a business strategy need to be changed?

This article aims to familiarize readers with some of the  key challenges involved with digitally transforming an enterprise. But first, let’s start with some basics.

What is digital transformation? 

The term “digital transformation” is often used so broadly that it is hard to pinpoint its exact meaning. However, this idea does have certain mandates, such as:

• Rethinking outdated operating models
• Experimentation and creativity
• More agility when responding to customers and competitors
• Richer, more actionable data
• Improved flexibility, agility, and innovation 

Digital transformation is the process of implementing digital technologies to modify or create new business operation procedures, company culture, and responses to customers to meet changing market expectations. It is changing how a company engages with its customers. Digital transformation is the reimaging of business.

Common Digital Challenges

While digital transformation will look different from company to company, there are some common networking challenges that will be encountered by most organizations engaging in this momentous undertaking. In this article, we will look at six of the key challenges of a digital transformation.

1) Lack IT Skills

To make digital transformation work, a company needs employees with the IT skills to carry it out successfully. According to Gartner, 53 percent of companies that responded to a recent survey said that “the inability to identify needed skills was the No. 1 impediment to workforce transformation.” Gartner further states: “Most companies are flying ‘data blind’ with regard to the skills they need for transformation and the supply, demand, availability, and location of those skills.”

In particular, skill shortages are most felt in the following areas:

• Advanced data analytics 
• Cybersecurity
• Enterprise architecture
• Technical architecture

There are several ways to meet this challenge. Consider the following:

• Engage IT experts and software consultants to assist your current IT team
• Develop strong service provider partnerships
• Pursue the use of no-code/low-code platforms 

2) Outdated Organizational Structures

Due to COVID-19, things like inefficient workflows and rigid leadership styles came into view as companies struggled to survive this cataclysmic event. Making sweeping and rapid technology changes is hard enough; however, when ignorance of or resistance to change is in the mix, it can bring disaster to a business. Company leaders and employees alike need to be prepared for the future. They need to see and embrace the big picture and understand their role in the changes to come.

An organization will not survive if they just focus on the technical side of things. They also need to consider the people involved. A strong effort must be made to inform all employees at every level of the goals for change and how it will affect them. A company’s biggest asset is always its people, and they should be a significant focus when undertaking a comprehensive management change plan. This is called building a company culture.

3) Evolving Customer Expectations

For enterprises to survive post-COVID, they must adapt to new customer expectations. It is important to realize how much of a person’s everyday life is now conducted on smartphones and laptops. 

User experience is everything. Recent statistics show that 88 percent of users are less likely to return to a website if they have had a bad experience. Only one out of 26 customers complain to the company, while 91 percent of those unsatisfied customers who do not complain, simply leave.

So, what do customers expect these days? Here’s a list:

• Good website design
• Easy to use website
• Secure website
• Personalized marketing with useful content
• Seamless integration between online and offline services
• Excellent customer service

Food for thought: It may make sense to do some market research to see what your particular customer base wants and what your competitors are doing to win business.

4) A Well-Defined Strategy

There can be a tendency to forge ahead without taking the time to set well-defined goals and priorities. Planning is essential. Not only does the workforce need to be prepped and onboard, but it is also essential to explore things like:

• Bandwidth availability
• Latency requirements
• Availability of communications service providers
• Adequate network reach

Without a well-thought-out strategy in place, a digital transformation is sure to fail. This is a huge undertaking, so make sure all bases are covered—from workforce preparation to technical issues.

5) Creating and Sticking to a Budget

Money is always a concern. What is important here is that a budget for a digital transformation project be realistic and adhered to. There needs to be long-term budget planning that can be divided into attainable mini-steps along the way. Here’s where prioritizing should shine. Start with the changes that will give you the most bang for your buck. A pragmatic budget that is strictly followed is paramount to a successful transformation.

6) Data Management

One of the primary reasons to consider a digital transformation strategy is to gather customer data. This type of data, properly managed, can give an invaluable understanding of customer preferences, behaviors, and even predictions for the future. Determine what type of data will be most helpful to your business and how it will be captured and organized. Then, think about what you need to know about your customers to help serve them more effectively. 

Final Thoughts

When you take into account all the digital transformation challenges we have listed above, it may seem a bit daunting. And it will be overwhelming if you try to tackle a project like this without taking the time to research your business needs and options and prepare your employees. However, by making steady, planned steps, you can begin this exciting and profitable journey—one footstep at a time.

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