Digital Transformation: 5 Common Pitfalls and How to Avoid Them
Undergoing a digital transformation (DX) has been a top business objective for many organisations over the last decade. With the availability of a wide range of technological tools and processes these days, it’s only natural for companies to want to leverage these tools to promote business growth. Despite the efforts, investment, and time that enterprises channel into a digital strategy however, the reality is that a good portion of digital transformation projects fail.
There are many factors that can contribute to DX failure. In this post, we discuss the 5 key reasons why success could be out of reach, and how you can counter these challenges so your company can forge a better path. But first what is digital transformation?
Digital Transformation Defined
Digital transformation is the process by which an organisation implements digital technologies throughout their operations and business processes to establish fundamental change. The primary goals of this digital-first approach to all aspects of the company is to improve efficiency, boost innovation, promote customer-driven services, and in general, create new business opportunities, which in turn, drives value for all stakeholders.
Applying digital transformation across the enterprise may come in varying stages for different organisations, often with the ultimate goal of becoming a fully digital enterprise. It may start with experimenting with the use of tech to solve common operational pain points, evolve to delivering personalised experiences for customers, and then move to creating new business models such as introducing digital products and IT services.
DX projects generally utilise artificial intelligence and its subfields, cloud technology, big data, and other digital technologies that leverage data and boost insightful decision making—all important tools that help enterprises remain competitive in an evolving business landscape.
5 Top Reasons Why Digital Transformation Fails
The digital solutions are there and leadership is on board. So why are many companies failing to achieve the targeted outcomes with their digital transformation efforts? Here are 5 common pitfalls you should understand before commencing your DX journey.
Starting without a clear digital transformation strategy is one surefire way to fail
In their enthusiasm to maximise the current technologies, many companies make the mistake of going headlong into digitalisation without a clear plan in place. For instance, if you are considering deploying new digital solutions in place of legacy systems, what is the main objective for doing so? Are the affected departments prepared enough for the potential disruption when the migration begins?
It’s important that needs are first identified and objectives are prioritised, before the team can even begin plotting the initial steps, along with specific and actionable plans. Focusing on the areas that need upgrading to boost efficiency or improve customer service can be a good place to start. In addition, having a sound strategy from the get go would ensure that the digital transformation process is a concerted effort within the enterprise and would not lead to isolation and siloing of the DX team.
New technologies don’t blend well with old systems
Legacy systems in a company are among the hardest to let go of. After all, significant resources have been invested into these systems, they’ve been in service for decades usually, and there’s always that why-fix-what-ain’t-broke mentality that’s difficult to get rid of. This is why these legacy systems are often the biggest setbacks in a company’s DX initiatives. Most are difficult to integrate with the current crop of technologies, and leaving them completely behind is an option that many executives are loath to take.
When there are legacy systems to consider, stop for a moment and think about whether the new and old technologies can work together. If not, weigh the pros and cons of upgrading and/or automating versus sticking with the current setup for a few more years. While adopting the latest technologies is never a bad idea, sometimes getting “shiny toys” prematurely or without a solid business case can spell disaster.
Not everyone is aware and/or accepting of the change
Just because the IT organisation has managed to convince the higher-ups of the need for digital transformation doesn’t mean all employees are happy with it too. For many, it would mean adjusting to novel technologies and learning newly-deployed solutions—activities that would take them out of their comfort zone. To get a DX initiative to succeed, a company must undergo not only technological change but also a resetting of the cultural mindset of its employees.
The challenge of educating employees and helping them understand the benefits of adopting enterprise-wide digitalisation falls jointly on leadership and the DX team. Both IT implementers and the management should use clear, non-technical language that employees can relate to easily: i.e., more compelling user experience, better customer service, faster IT services, and (hopefully down the road) greater financial incentives.
The lack of IT expertise can seriously derail efforts
Digital transformation requires proficient technical skills that unfortunately, many organisations lack. To boost chances of success, a highly-qualified, experienced IT team is a must, and even non-technical positions will have to be filled with people who have more than a basic tech know-how. The scarcity of IT talent is no secret, and thus, putting together the right DX team is far from easy.
If your company is facing a serious shortage in the required core competencies, you’re certainly not alone. One way to address this issue is to outsource the work to, or—if you have some inhouse talent—augment your team with experts in the areas of IT, cybersecurity, analytics, cloud, data migration, and other relevant fields. As mentioned earlier, this will necessitate considerable investment (depending on project scope), and that’s why careful planning must have been applied beforehand.
Cybersecurity concerns should be addressed at the outset
Any business strategy that an organisation implements has a security component to it. With digital transformation, privacy and cybersecurity concerns have become a major hurdle especially for companies belonging to data-sensitive industries such as healthcare and financial services.
In a DX initiative involving migrating on-premise solutions to the cloud for instance, the increased vulnerability to cyberattacks should be seriously evaluated, and risk mitigation strategies need to be put in place. The key to nipping this problem in the bud is to partner with third-party IT services providers whose solutions you have vetted and have full confidence on.
Overcoming Setbacks in Digital Transformation
Implementing digital transformation in your organisation can be daunting, but with the right planning and proper execution, the benefits are well worth it. Don’t let potential DX challenges stop you from reaping the rewards. Start preparing for your priority DX project by consulting with a reliable IT managed services provider.