When it comes to modernization within the business world, digital transformation plays a significant role. The problem is that, in 2019, many businesses are finding digital transformation to be an insurmountable challenge that holds them back from future growth. To a large extent, the future of these companies depends on how these underlying issues are dealt with.
As with buzzwords, it’s easy for meaning to get lost or muddled. So before digging too deep into this topic, let’s clarify what we mean by digital transformation.
Salesforce puts it best when they explain, “Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. This re-imaging of business in the digital age is digital transformation.”
Digital transformation isn’t specific to a department like sales, marketing, or IT – it cuts much deeper. It’s about engaging with customers and creating value in a way that maximizes the opportunities created by evolving technology. But as with any technology issue, it comes with unique challenges that must be dealt with in a very direct, head-on manner.
Here are some of the biggest digital transformation challenges businesses currently face:
- Poor Collaboration
According to a research study summarized by Mandel, companies are finding that the greatest barriers to digital transformation success are IT culture and business alignment. In particular, 50 percent say culture and collaboration are greater barriers than technology or cost, while 27 percent believe a lack of collaboration between IT and LOB is the top roadblock.Improved collaboration is both a strategic challenge and a ground-floor issue. In other words, not only do businesses need to develop better communication funnels and processes, but they need to be hiring IT professionals with the right soft skills. Characteristics like communication, empathy, problem-solving, and collaboration are just as important as technical competencies.
- Resistance to Change
Humans seem to be biologically hardwired to resist change. At the very least, most people would prefer things to remain relatively consistent from week-to-week and month-to-month. Digital transformation spits in the face of predictability – so people naturally resist. Unfortunately, the consequences of resisting change are manifested in many ways.As CIO contributor Howard Tiersky explains, “Digital projects vital to a company’s future success can have trouble getting funded, resourced, or marketed. These projects may be modified so as not to threaten retail or partner brands. They are held back by concerns about cannibalizing other revenue sources. They are asked to justify ROI to an unreasonable level of certainty. They are sent through endless legal reviews.”Everyone in the organization doesn’t have to be thrilled about the prospect of change, but there does need to be trust and cooperation in order to make digital transformation work. This takes time to address and requires business leaders to acknowledge and work through the dissonance employees feel.
- Lack of Vision
It’s astonishing how many businesses don’t have a clear vision for how they will meet their customers’ digital needs in the future. If you look at companies that are failing with digital transformation, you can almost always pin the blame – or at least the initial blame – on poor vision. When vision is established or clarified, it becomes much easier for stakeholders to assume responsibilities and trust that everyone else is moving toward the same set of objectives.
- Poor Budgeting
The vast majority of businesses face some sort of financial constraints during the digital transformation process. When used as boundaries, these constraints can be a good thing. When viewed as excuses, budgetary limitations lead to problems. Budgeting isn’t something businesses should address after establishing digital transformation goals. It’s something that needs to be addressed during the goal-setting process in order to come up with a realistic plan for positive change.
Putting it All Together
Digital transformation is something every forward-thinking business must develop thought and movement around. However, as you’ll discover, it’s not the easiest topic to tackle. By addressing challenges like the ones outlined in this article, you can increase your chances of smooth transformation that benefits your business for years to come. Don’t discount the weight of the decisions you make here and now.