Despite the importance of digital transformation, there is still an alarmingly high failure rate of 70%. Because there is a disconnect in the process, it is extremely difficult to get right. You’re told it’s necessary to stay competitive, and the next step is to be sold on it by a slew of savvy new automated tools.
What exactly is digital transformation?
Digital transformation is a cultural and business shift within your organization. It is a business change because it reimagines how your company’s operations can function. It implements new technology across your organization in an effort to speed up processes, streamline operations, and improve customer and employee experiences.
Digital transformation can frequently change the way you work, but its ultimate goal is to use technology to deliver more profitable value to your entire business. Because it is driven by your organization’s people and stakeholders, digital transformation is considered a company culture change. It looks to the leadership team for direction, change management, budgeting, and other functions.
It is dependent on line employees for requirement development, successful implementation, and adoption. Digital transformations fail in the absence of a mindset shift and acceptance of the business’s evolution.
Common Challenges to Digital Transformation
No Vision for the Future
The majority of businesses are well aware that digital transformation is the way of the future. The issue is that this comprehension isn’t nearly nuanced enough. Different companies and industries interpret digital transformations differently. It is critical to understand what it means for you and what you hope to achieve.
Considerations for your vision of digital transformation
- What are you hoping to achieve with your digital transformation?
- Are you attempting to upgrade and maintain your market share?
- Are you planning to expand in a competitive manner?
- Are you willing to completely redesign your current operations?
- What does success entail, and why is it so important?
Having a clear digital transformation vision keeps you from being constantly reactive to competitor innovations and guides decisions for all stakeholders. If you’re having trouble, you might be a digital laggard in need of a jumpstart.
Starting the technology evaluation process in the incorrect location
CIOs and digital transformation leaders are under pressure from CEOs, competitors, and even suppliers to replace legacy software, processes, and systems. It frequently leads to rash decisions. You determine which technologies must be replaced. You scour the market for alternatives. You present them to the team and decide.
Aversion to Change and Risk
A fundamental aspect of digital transformation that CIOs must understand is that risk is not experienced in the same way by all stakeholders. Senior executives recognize the financial and reputational risks. Management perceives a risk of incompetence. Line employees are concerned about redundancy and obsolescence. 47% of stakeholders are afraid of change and risk because they believe digital transformation will jeopardize their current job or business security. Implementation rarely goes smoothly without a welcoming attitude and active change management strategies.
Technology Costs
Different costs are associated with digital transformation. There is a time-consuming software selection process to go through before you even purchase a piece of software. You must engage and solicit feedback from stakeholders across the organization, sort through and rank the requirements, speak with potential vendors, and discuss options with senior management. Then there are the training expenses.
It gets worse if you put it off because of these costs. In your market, the competition establishes an unassailable lead. The cost of inadequate budgeting is reputational damage to customers and even employees. In any case, cost, financial, human, and time, is a significant barrier to digital transformation, especially when there is such a high likelihood of failure.
Being a Digital Slacker
Companies that embrace digital transformation are considered digital leaders. They allow new technologies to reshape how they conduct business and fundamentally alter the structure of their organization. It’s not just about new tools to them; it’s about employees using technology to improve their services and processes and deliver more value.
Digital laggards regard DX as an extension of what they already do. Because the mindset is limited to upgrading rather than disruption, there is no room for widespread operational change. This limited perspective limits the opportunity for innovation and fails to prepare your company to compete with a reimagined, digitally transformed model.
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