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How to Overcome Challenges in Digital Transformation

  • Edward Nick 

Digital transformation isn’t just about technology. 

It’s the holistic approach to developing better processes, improving employee engagement, and optimizing your business for long-term growth by adopting the proper technology. 

Complex endeavor, you should expect some resistance along the way and be prepared to overcome challenges. 

What is digital transformation? 

Let’s start with the basics. 

A digital transformation uses technology to help improve business operations and customer relationships. 

It can be as simple as ensuring your website works properly on all devices or as complex as using artificial intelligence to automate specific tasks. 

Digital transformation affects almost every aspect of your business and involves multiple teams working together to facilitate change.

The stages of digital transformation

The only constant with technology is change. Something better or faster is now available. 

Technology becomes obsolete in the blink of an eye. And companies often struggle to keep up. 

According to research by Prophet, six distinct phases make up the blueprint for a digital transformation.

  1. Business as usual 
  2. Present and active
  3. Formalized
  4. Strategic
  5. Converged
  6. Innovative and adaptive
How to Overcome Challenges in Digital Transformation

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Each stage makes up the areas of growth that’ll advance companies toward a more agile, innovative, and digitally competitive state.

6 challenges with digital transformation

A successful digital transformation is easier to be done.

Let’s dive into the primary challenges companies face during digital transformation

1. Lack of understanding

Some people just don’t see why a digital transformation is essential. 

They don’t want to prioritize it or don’t know what steps need to happen to achieve your goals. 

In certain industries, it can even be a challenge for your customers. For example, stock brokers with older clients may find it difficult to adapt to a digital system that goes paperless. 

Humans are creatures of habit. We often don’t like to change what we know if it isn’t the most efficient way to do something. 

To transform your organization and create a new way of doing things, you need motivated employees and get everyone on board.

2. Poor strategic vision

A well-articulated strategic vision communicates an organization’s purpose and meaning to its employees, customers, and stakeholders.

Creating a solid strategic vision is no small feat. 

It involves collaboration between all departments of your organization — and it often takes years to build up enough momentum for people to buy into it fully. 

When the right strategic visions help your business forward by keeping everyone on the same page. It provides a roadmap of how they can contribute individually toward a shared goal that matters most to your company.

3. Inefficient processes and workflows

An essential part of any digital transformation is the process and workflow. Identifying, improving, and ensuring efficient workflows is crucial to success.

It’s easy to get comfortable in your daily workflows. You know exactly what to do and how to do it. 

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Taking the time to slow down, step back and identify inefficient processes can be challenging. 

There’s no need to fix something that isn’t broken, right? Well, think again. 

4. Lack of organizational agility

Organizational agility is the ability to adapt to change quickly and efficiently. 

It allows your organization to move faster than your competitors and react in a manner that gives you a competitive advantage

5. Overdependence on legacy systems

Legacy systems are a nightmare and often difficult to integrate with new systems. 

Outdated technology can be a significant challenge because legacy systems are expensive to maintain and difficult to scale upgrade or innovate.

The longer you wait to make this change, the more challenging it’ll be to make a complete transition. 

Not only are you using resources to maintain the legacy system you rely on you also need to deploy resources to build and integrate the new system — a double whammy. 

Legacy systems often present a variety of cybersecurity threats which are better addressed by more advanced systems and softwares.

Therefore, it becomes essential to regularly update company systems to keep data secure and protect your business from data breaches. 

6. Underestimating certain challenges

One monumental challenge to overcome in digital transformation is underestimating the amount of time and effort it’ll take. It could be a long-term journey, so you’ll need an effective plan.

The last thing you want is to run into further frustrations down the road when goals are missed or things take longer than expected.

6 tips for overcoming challenges of digital transformation

Don’t fret. With a few pointers, a successful digital transformation is achievable. 

MOS is a great example of a bank that tackled the many challenges of digital transformation head-on and came out stronger on the other side.

They started by helping students learn about college scholarships via digital resources.

They’re helping students save their own money for college with dedicated bank accounts for students and fee-free debit cards. 

Their digital transformation wasn’t easy, but MOS accomplished its goals by following these six great tips for overcoming the challenges of digital transformation.

1. Identify the business need

Identifying your business’ needs is the first step to determining how you’ll proceed through your digital transformation journey. 

Your business needs can differ from others in your industry, and it may take some time to figure out precisely what it is for your organization. Finding this out is essential to developing a successful strategy.

Answer these questions to determine if you have a strong enough business case for digital transformation:

  1. What are your future goals?
  2. Are you losing revenue due to inefficient processes? 
  3. How do you compare against industry benchmarks?
  4. Is there an increase in competition due to advances made by other companies or technologies like artificial intelligence (AI)? 
  5. Are you falling behind your competition?

Once you understand what your goals are — and why they matter — you’ll have a much clearer picture of how to proceed with your change management plan and make sure that everyone involved understands their role in making those changes happen.

2. Develop a strategy

Now that you understand the business need for digital transformation, it’s time to create a well-thought-out strategy. How will you achieve your goals? 

Without a vision or an endgame for your digital transformation, it’d be like trying to build an airplane without knowing what kind of plane you want or where you plan on taking it.

If you don’t have a destination in mind, how will you realize it when you get there?

Ask yourself: 

  • Do you want my product or service delivered more quickly? 
  • Do you want fewer steps between the customer and the transaction? 
  • Do you want more customers altogether? 
  • Would affiliate marketing help me reach my goals? 

These questions will help define what type of platform is needed and how much time and effort will go into achieving them. 

You should also keep in mind that the key to expanding your reach while transforming is to use a suitable communication language that people all over the world can appreciate

3. Create a solid governance structure

The governance board is responsible for setting and managing strategic direction and priorities, approving projects and initiatives — providing oversight to support quality assurance, and making critical decisions that affect the company’s future success. 

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It typically consists of C-level executives tasked with overseeing the organization’s digital transformation efforts. In addition to their other responsibilities.

These executives will receive regular updates from senior managers involved in implementing digital projects across the company. 

The governance board also provides resource allocation decisions. Anything from how much funding should be granted towards the IT investment or what percentage of revenue should be devoted to R&D expenses. 

4. Establish a budget

Before you can move forward with your project, it’s essential to have a budget approved by the executive team. 

A budget is a vital part of the project plan and plays a significant role in what your digital transformation will look like.

It also helps make sure that you don’t run into any problems by not having enough funding when you need it.

Work with the project manager to determine how much money to allocate for each stage of your transformation. 

Make sure everyone involved understands any costs associated with implementing technologies and services and try your best to stay below budget where possible. 

5. Align leadership and executive teams

The alignment of leadership and executive teams is essential to any digital transformation initiative. This can be a challenge because of the sheer number of people involved.

It’s not just the top executives who need to buy into the project but also other employees whose work will be impacted by it.

To successfully lead this stage of your digital transformation, you’ll want to make sure that there are plenty of opportunities for input from leadership.

Stakeholders before making decisions. It’s also vital that they’re involved in all stages: initiating, planning, and executing.

For example, the last thing the finance department wants is a new reporting software that didn’t go through testing or feedback from the users themselves. 

6. Build a robust project team and delegate responsibilities

The project team needs the right mix of business, technology, and user experience skills.

Don’t forget to consider investing in a robust project management platform to help those team members communicate and collaborate effectively

Your team should work well together to achieve their goals as a group while still respecting each other’s opinions and involvement in the decision-making process.

It’s crucial that your project teams have access to expertise in whatever areas they require — whether it be business acumen or technical know-how — to do their jobs well. 

Take the example of American Trucks which sells truck engine parts, tires and rims, suspensions, exhausts and much more.

Due to their perfect project strategy, they successfully transitioned into the billion dollar truck industry from just a small Mustang website started in the early 2000’s.

If your company doesn’t already have someone who can step up as a leader on this initiative, then consider finding someone who’s capable of leading it from outside of your organization (such as an external consultant).

Acknowledge the challenges associated with digital transformation

Plan for those don’t be afraid to change course during the process.

  • Build a culture that supports innovation, creativity, and learning by encouraging curiosity, feedback, and collaboration among employees at all levels of an organization.
  • Create an environment where employees feel valued, so they’re willing to share their ideas and work collaboratively with others across departments or divisions.

Wrapping up

There’s no one-size-fits-all solution for digital transformation. 

Every company is different, and every situation is unique. 

While digital transformation is a long-term process, it requires a team effort. You can’t transform your business alone — it takes everyone in your organization to get on board and commit to the change. 

From senior leadership down to each employee, a buy-in at every level of your company is required if your digital transformation is going to succeed.

There are a few key factors that play into getting buy-in from your team:

  • A clear strategy for how you plan on implementing digital transformation (and why)
  • A project plan outlining who’ll do what at which stages (and in what order)
  • A budget for allocating resources

With the right people and a solid plan, you can successfully navigate your digital transformation journey for long-term business success.