Adopting new technologies that can be used to generate commercial value can help an organization’s success. However, the path to digital transformation requires both technological and cultural transformation. The route to transformation can be complicated because it necessitates changes in technology, procedures, and human resources.
As a result, many businesses’ efforts at digital transformation may fail. There are no quick fixes when it comes to digital transformation. According to API thought leader and author Amancio Bouza, digital transformation is driven by more than just technology. It’s not just about putting in place the new tools that are available today to maximize these benefits.
Digital Transformation in a Nutshell
To summarize, digital transformation refers to the application of digital technologies to the development of new business models. The goal is to ease company pain points, increase efficiency, and enhance customer service experience.
ERP solutions, for example, are at the heart of digital transformation since they can help every part of a company. These technologies can help firms improve their processes and culture so that they can remain competitive and relevant.
A competitive market necessitates that many businesses undergo a digital business transformation. Companies are getting increasingly data-rich and interconnected over time. You can reap the following advantages if you move in this direction:
- Customer satisfaction that’s higher quality
- Data that is more useful and actionable
- Improved adaptability, agility, and creativity.
Seven Challenges of Digital Transformation
It became commonplace in 2020 for firms to upgrade their processes and install new technology. Although many of these companies had grand ambitions in mind, they were forced into making these modifications to keep their operations running throughout the pandemic.
In this article, you will learn the benefits and challenges of digital transformation. As they look to the future in 2021, these companies’ new digital strategy is unclear. Other challenges include the following:
1. Processes that are too burdensome
Can you tell if your current business procedures are in line with the level of growth you want your company to achieve? What level of capability does your current roadmap have in terms of assisting you in achieving your long-term company goals?
You might come across a difficult situation. You have to make adjustments to your current method or procedure. You can also change the business rules. Lastly, learn to exploit data in ways that were not initially anticipated when you established your old systems. Business process reengineering is a standard method of accomplishing this.
2. Absence of IT Expertise
Behind every successful digital transformation is a team of IT professionals who are motivated and highly competent. But, putting together this group of experts is becoming more complex. An increasing number of organizations are pursuing new technologies, resulting in a workforce shortage.
A recent survey found that 54% of companies said a lack of trained people hampered their transformation efforts. They lacked knowledge in the following areas, in particular:
- Enterprise architecture is a subset of technical architecture
- Data analytics that is cutting-edge
Is there a way to address this? Consider bringing in outside specialists and software consultants to support your current in-house workforce. Better understanding your customers should be one of your top priorities. They are forming service provider alliances and lowering development costs through the use of no-code/low-code platforms, among other things.
3. Data management that isn’t working
One of the foundations of digital transformation is the use of customer data. The data provided by this tool can provide you with valuable insights into your buyers’ tastes, actions, and potentially critical future decisions.
As you might see, the way you collect and organize this information is critical. If you’re still using disparate systems, it can be tough to bring all this information together and make it readily available from one location. If everything is kept in a single data center, the same thing may happen.
It’s critical to start from the beginning to solve these problems. What information do you need to know about your customers in order to provide them with good service? Please create a list and use it as a guide to help you in developing your data strategy.
4. A deficiency in organizational change management
Outdated organizational structures, inefficient workflows, and restrictive leadership styles can be barriers to successful digital transformation. This was never more evident in 2020 when businesses struggled to transition from a traditional office setting to a remote working environment. Simply navigating new technologies can be challenging enough. Still, when you add change resistance to the mix, transformation can appear to be impossible to do.
Fortunately, putting a strong emphasis on organizational change management can assist your company in preparing its personnel for what is ahead in the future instead of concentrating just on the technical aspects of digital transformation. By creating a comprehensive change in management plan, you should consider the people who will be directly affected by the transformation.
5. Budgetary Issues and Limitations
Another issue that arises when there is no defined approach is the inability to set or stay to a budget. As you respond to modification requests, know that changing customer needs often happens. Suppose you don’t have a plan in place. In that case, you’re likely to make selections that provide little to no advantage, while also increasing your budget and timetable.
We recommend looking at your transformation’s long-term goals and using these milestones to create a realistic project plan. To do so, you’ll need a thorough understanding of both the digital solutions you’re deploying and the culture into which they’ll be integrated.
6. An ever-changing customer base
In the last year, people have only understood how much they can do using their laptops and smartphones. As a result, clients are more discriminating and demanding than they have ever been. Resources such as touchless checkout alternatives, for example, are no longer considered optional extras. Expectations are rising as a result of their increasing prevalence.
We recommend conducting market research rather than assuming that you already know what technologies your customers want you to give. You will be able to observe what customers desire and what the competition is doing to get their business in this manner.
7. An Undefined Plan of Action
Digital transformation is much more than a trendy phrase. Despite this, the term is frequently used without providing a clear definition. Because of this, businesses surge ahead in choppy waters, convinced that they must move forward, but unsure of where they are heading.
The implementation of your change may be hindered if you do not have a strategy in place. So, ask yourself: What are the objectives and priorities of my company? Are they consistent across the board, or are some stakeholders on different wavelengths in your organization?
Take it from us: a little business-information-technology alignment may go a long way.
Although the seven previously mentioned digital transformation challenges may appear daunting, they do not have to hamper you in actualizing your plans. It is critical to understand how to anticipate, recognize, and deal with these issues.
Many problems begin with people entering the project with their eyes wide open, enthralled by the glitzy new technologies touted by ERP vendors. By taking your time, evaluating your options, and preparing your staff, you can achieve all of the benefits you hoped for.