Having looked at what digital transformation means and some of the digital transformation initiatives that companies wish to implement, we will now look at the challenges that most companies face with digital transformation.
Challenges of Digital Transformation
Lack of Tech Skills
According to a KPMG survey, 54 per cent of companies felt they lacked the skills that would enable seamless digital transformation. The skill shortages were notably largest in the areas of cybersecurity, technical architecture, enterprise architecture, and advanced data analytics. A few ways this challenge can be overcome is by relying on outsourced services of IT experts and software service providers who can offer consultation and solutions in the form of resources that can fill in the gaps with knowledge and technical expertise.
Inadequate Organizational Change Management
Organizations caught in old ways prefer antiquated and rigid leadership styles that impede progress with digital transformation initiatives. Effective change management increases the likelihood of meeting project objectives. Change management starts from the top with leaders and managers accepting the need for change and bringing their colleagues, subordinates, and other stakeholders outside the organization (such as suppliers and customers) on board. Change management is not just the pursuit of organization-wide training, but also the effective handling of any employee grievances and resistance.
Slow or No Adaptation to Customer Needs
It is crucial to listen to customers on social media and conduct marketing surveys to ascertain their needs and wants. Most marketing departments do not determine shifting customer needs and wants fast enough and end up seeing a lot of wasted opportunities and slow responses as a result. To overcome this challenge, market research can be automated — this may seem paradoxical given that it wouldn’t make sense for firms that are not digitally-transformed yet to automate, but automation is a prerequisite that can kickstart digital transformation implementation.
Lack of Data Management
Another challenge that hinders digital transformation initiatives from taking hold is lack of data management. Data is one of the foundations of digital transformation: it provides powerful insights about customers and products that allow companies to make smart decisions about marketing and steer operations and supply chains accordingly. One of the biggest data management issues is not having consolidated data structured around centres. Without consolidation, a lot of data tends to go unused.
Scope creep, which is the unaccounted-for expansion of the scope of any project in the implementation stage, usually drives project costs up. While a company may budget for lower expenses in digital transformation projects, the actual costs may end up delaying the implementation. It is therefore necessary to be anticipate what the different project requirements can be and account for those in the planning phase, especially when predicting the aspects that could lead to scope creep.
Having looked at digital transformation challenges, we will discuss how digital transformation can be undertaken in businesses in the next article.
Arslan Ahmed | Staff Writer