In the past, digital transformation was an optional luxury – now it’s a necessity. Most digital transformations are designed to increase efficiency, streamline operations, and automate manual processes. While this is all great for productivity, there are plenty of digital transformation challenges for businesses to overcome.
In a recent study, 71% of business decision-makers reported that their company failed to deliver on the promises in project briefs, and 69% felt overwhelmed by the volume of new technology solutions being introduced.
So, what are the biggest digital transformation challenges that businesses need to consider? Let’s dive in and find out!
What are the biggest digital transformation challenges?
Before you start trying to solve digital transformation challenges, you need to identify them. Digital transformation doesn’t just mean adopting new technologies – it’s also about adopting a new business model and, more dauntingly, creating a new company culture.
1. Employee resistance
One of the biggest problems accompanying any digital transformation process isn’t a technology challenge, it’s a people challenge. Many employees will, quite naturally, resist any change in their working practices. They might feel worried about losing their job or feel daunted about using the new technology.
While it’s tempting to assume that everybody in the company will be excited and motivated about the transformation, this might not be the case. Come prepared for employee resistance, and then you can be pleasantly surprised if everyone’s onboard.
2. Integration issues
Bringing in new technology means ensuring it works alongside old systems and processes. This is rarely a problem-free experience.
For true digital transformation, different systems and applications need to work seamlessly together. However, you’ll probably find that you have data stored in different systems or departments, making it tricky to integrate the new systems fully.
3. Cybersecurity concerns
The more aspects of your business that are digitised, the higher your risk of cyber threats. Increased reliance on digital technologies, interconnected systems, and the expansion of online activities all contribute to cybersecurity concerns during digital transformation.
Increasing your use of technology increases your ‘attack surface.’ Every added component creates a potential entry point for a cyber attack. It’s also inevitable that managing and securing complex, interconnected systems becomes more challenging which then allows more room for vulnerabilities.
The migration to cloud-based services is a common aspect of digital transformation, which means you need to maintain compliance and know the regulations around cybersecurity inside and out!
4. Skills gaps
When you introduce new technologies, there’s bound to be a skill gap. After all, your team probably hasn’t used the systems before, so there’s going to be some teething issues, slowing down progress.
Digital transformation relies heavily on data-driven decision-making. If your employees lack the skills to analyse insights from data, you might miss out on opportunities for optimisation.
Without upskilling your team and taking advantage of new technology, you risk being left behind by your competitors.
5. Cost constraints
Digital transformation projects are expensive. Overhauling and modernising your organisation’s technological infrastructure and processes is no small task. Just purchasing the tools you need is expensive. AI, cloud computing, and data analytics platforms cost a lot on their own before you add in implementation costs and ongoing subscription fees.
You’ll need to invest significantly in employee training and upskilling to ensure the workforce can effectively use the new digital tools. It’s also worth budgeting for the potential productivity losses during the learning curve.
6. Changing customer needs
One of the key reasons why organisations undertake digital transformation is to better serve our customer’s needs. Now, everything you need is at our fingertips. Delivery is faster, information is more accessible, and everyone is more tech-savvy than ever.
Trying to keep up with the changing customer needs is a huge task. Digital transformation doesn’t happen overnight, so you need to be ahead of the curve to make sure you stay relevant.
7. Measuring ROI
It’s often difficult to work out the ROI of a digital transformation. When every purchasing decision has to benefit the bottom line, investing in a huge project like this with a hazy return is a daunting prospect.
While you might have an idea of what the potential ROI could be if everything goes well, it can often be a ballpark figure. This means it can be challenging to convince bosses and finance departments in the first place.
8. Poor management strategies
With digital transformations being huge projects, you need a leader who can weather any storm. Essentially, you need someone who can handle all the challenges on this list and that’s no small feat.
If you have poor management strategies, everything is going to be more of a challenge. You need a plan, you need buy-in from middle management, stakeholders, and bosses, and you need someone to keep everything on track.
How to overcome digital transformation challenges
Now that you know the five key digital transformation challenges, you can come up with a solution. While the list of challenges may seem extreme, businesses overcome them every, single day.
Here’s what you can do to overcome these digital transformation challenges:
1. Establish clear leadership
Strong leadership is essential in guiding digital transformation. It’s no small feat to keep a project like this on track and keep people happy.
You need to be able to:
- Communicate effectively
- Motivate your team
- Break down silos
- Keep the project on track
- Encourage innovation
- Drive cultural change
- Share your vision
Successful transformation project leaders can bring to life a shared vision unique to their business and rally every employee, investor, and stakeholder to the cause.
2. Create a comprehensive strategy
Without a comprehensive strategy for your digital transformation, it’s going to be a nightmare. There are so many plates to keep spinning, so a clear plan of action will make everything easier. Normally, this is done through a Digital Transformation Roadmap which takes you through everything step-by-step.
To measure success you need to know the intended impact on your customer and quantify the overall ROI. For example, will it reduce operating costs or make it easier for new products to reach the market? Once you know what you’re trying to achieve, you can pick KPIs that track progress easily.
Best practice says to focus on a few key strategic priorities. Don’t be swayed by fads and make the digital transformation process more complicated than it needs to be. Remember, this isn’t purely about technology – it’s about people.
3. Empower your employees
Cultural change is a huge part of digital transformation, so you have to empower your employees. If employees don’t feel empowered and involved, you’re going to face an uphill battle.
It’s important to connect with employees and explain the transformation process so they can understand where the company is going and how the industry is changing. This will show employees how they can contribute to that transformation on an individual level, making them feel involved in the decision-making process.
Some ways to explain this include:
- Sharing how the new technology will change the lives of customers.
- How the digital transformation is going to generate financial returns for the company and staff.
- Will make everyone more skilled and competitive.
- Increased innovation and acclaim.
Final Thoughts on Digital Transformation Challenges and Solutions
The accelerated adoption of new technologies isn’t anticipated to slow down any time soon. The shift to digital technologies makes sense for both businesses and customers. It’s more efficient and innovative, all while improving customer services. So, despite the challenges, digital transformation is vital for future growth and sustainability.
The right digital technology can enable your business to respond more quickly to market conditions. It can also help you understand more fully what your customers want and need, improving your overall offering.
Embracing digital technology can only truly happen when we understand the potential risks and challenges we’re likely to encounter along the way. By equipping ourselves with practical solutions, we can ensure a successful digital transformation.
To learn more about how Omniplex Guide can help support your digital transformation project, get in touch or book a free product tour.
