The Challenges of Digital Transformation

The COVID-19 pandemic has pushed businesses to look for more efficient ways to do business and remain profitable and future-proof for years to come. It has undeniably brought about a myriad of challenges and has drastically altered customer sentiment and expectations, and it’s in this arena in which businesses are racing to retain what customers they have and continue to acquire new ones. The rise of global online retail sales in 2020 has pushed the figure up to approximately $5.8 trillion in 2023, with projections indicating a 39% growth in the coming years.

A reliable source advocates digital transformation for businesses—and it’s a move that should be taken seriously. Not many companies today fully grasp the complexity of the concept, and this is where digital adoption platforms come in. There are many reasons why digital transformations fail, especially if organizations aren’t prepared for a cultural and foundational change. It can be a daunting venture, with challenges that need to be overcome. Business leaders should take the initiative and come up with a strategy that can accommodate hybrid or remote working arrangements and ensure minimal disruption to business operations.

Below are a few of the challenges that can hinder successful digital transformation.

Outdated Organizational Structures

The multiple data centers tech companies have today is testament to how the conventional organizational structure isn’t equipped to face the challenges of a digital-first business model. Businesses often fall into the trap of thinking that a digital transformation simply means “digitalization” or the shift to digital systems and tools, oblivious to the fact that it’s a systemic change that requires more than just an upgrade of computers and servers. A mindset shift is required for digital transformation efforts to succeed, so that employees and management can adapt properly. Without a well crafted digital transformation strategy, even the latest and greatest technologies and systems can prove ineffective, especially if organization-wide adoption isn’t achieved. 

Change, by nature, is disruptive; the goal of a digital transformation strategy is to minimize this disruption as much as possible. Transparency is vital before, during, and after the transition so resistance is addressed and every member of the organization completely understands the nature of the transformation and why it’s being done in the first place. Practical benefits should be enumerated and explained to help them see how it can help them do their jobs better and have a positive effect on the business overall. Employee challenges should be acknowledged and every effort should be done to help them acclimate to a digital culture and the tools that will help push the business into the digital age. Ultimately, the goal is not only integrating new technologies into their workflow but also achieving cultural change and organizational realignment.

Gaps in Technical Expertise 

Upskilling employees should be a continuous endeavor for any organization, especially if new technologies and systems are being adopted. Determine what IT resources you need at the onset and create a plan for proper adoption, ensuring that management teams are also part of the process. Lack of manpower with the necessary technical skills can be a hurdle; in such cases, these skill gaps should be filled. 

In the 2023 State of the CIO research, IT leaders stated that most of their work involved functional and transformational efforts. They were optimistic about IT growth as they saw more than half of companies have increased IT budgets in 2023. The rise of AI also creates an impending skills gap for businesses, and 80% IT leaders say that they will be more involved in AI and machine learning moving forward. Companies, however, should evaluate their current systems and determine what needs to be upgraded or replaced before jumping into the implementation of new technologies. Bridging skill gaps should be the goal, but companies should also leverage on their current strengths and use digital tools and systems to complement them.

Lack of Confidence in Digital Transformation Initiatives

Cybersecurity has always been a concern for businesses, more so as it becomes more valuable in today’s digital business landscape. Digital transformation programs should have cybersecurity as one of their top priorities because it’s intertwined with data-driven business processes. IT leaders and management should continuously educate IT teams on the various types of cyberattacks and systems exploits and how they evolve so they can continue to put appropriate security protocols in place. Systems and data should be analyzed regularly to identify anomalies immediately and avoid unauthorized access. As employees get more connected and handle more data, cybersecurity should become a natural part of their workflow to promote a truly collaborative environment that will help encourage everyone to embrace the benefits—and potential challenges—of digital transformation.

The Complex Road to Success

Digital transformation is by no means a simple process, and it’s the reason why many businesses find it a challenge. The transition doesn’t need to be a rough one, though; keeping an open mind and having a broader perspective about data management and digital strategies will go a long way into creating a digital transformation program that won’t be too hard to swallow. 

Ultimately, combining the old with the new will help your organization determine what it truly needs to succeed in a digital-first landscape. It may be an uphill battle, but transparency, a solid strategy, and aligned expectations will help ensure that the transformation applies to every aspect of your business, most especially to the people behind it.