Overcoming 7 Digital Transformation Challenges

Posted on August 2, 2018

Digital transformation challengesConsumers expect brands to provide a flawless digital experience in all customer engagements. Across all industries, it rings true that companies delivering a robust and digitally-centric value proposition are seeing dramatic growth and disrupting the markets. Meanwhile, legacy brands are shrinking or going out of business. The bottom line is that companies in the digital age must transform to survive.

However, even visionary executives face massive challenges when it comes to enacting the kinds of change that are necessary. Below you will find advice on overcoming 7 digital transformation challenges.

Resistance to Change

Most people are resistant to change. Consistency makes people feel safe and comfortable. When routines change and uncertainty (especially from an outside force) enters a business, employees often have a grim outlook on the future. Enterprises experience sweeping modifications across departments and role when undergoing a digital transformation. As a result, employees often feel threatened. Nervous employees or business leaders have the power and ability to stall critical digital projects.

It is essential to keep in mind that in today’s businesses change is a requirement for survival. Digital transformation is vital to the success of a company.

It might be impossible to erase doubt completely. However, consistency and transparency can help alleviate concerns. Business leaders will respond to data and analysis explaining the need for change. Informed and involved employees feel empowered to help create the future and play their role. When resistant team members understand what is at stake, they feel a renewed energy to help.

Lack of Communicated Vision

Businesses with a clear vision are more likely to succeed at digital transformation. That vision must be clearly communicated with goals and objectives for each team member. With the shared purpose in mind, employees can execute the plan over multiple years.

For many companies, failure to achieve digital goals can be traced to a lack of defined purpose. The digital transformation process does not belong to any one department. However, when businesses do not create a strategy, it often falls to one department or individual to lead the charge. Or, worse yet, there might be competing initiatives. Instead, business leaders should task departments with executing part of the strategy while the whole business works toward the common goal.

Legacy Technology Stack and Development Process

Iteration is essential to achieving a well-designed digital experience. Digital tools are in a constant state of evolution via the “test and learn” approach. This approach allows new features to be regularly added, measured, adjusted, and pruned based on feedback and data. However, it is impossible to use this approach with traditional development cycles. Agile development techniques allow innovative companies to try new strategies, quickly assess their outcomes, and adjust based on the results.

This process also involves adjusting workflows, rules, content, and data in ways that stakeholders could not envision when establishing the original system. Building flexible and responsive digital experiences requires modern technology that allows for robust and secure APIs and provides access to business logic independent of presentation layers. Legacy systems do not need to be thrown out, but they likely need significant refactoring to support effective digital journeys.

Lack of Security & Compliance

By their very nature, digital businesses are subject to the risk of cybercrime. Even as security systems evolve, hackers are also becoming more sophisticated. As a result, cyber attacks can compromise even the newest systems, software, and apps. Businesses preparing to digitize should consider potential threats and work to revise or update security strategies. IT security must continuously evolve with technology.

Governments have a vested interest in protecting their citizens’ data. To provide that security, they create a variety of regulations. As was the case with GDPR, policies may impact businesses outside of the regulating country. Maintaining compliance requires a focus on process, retention, and technology. Failure to comply could result in substantial fines.

Lack of Budget

Even organizations with large budgets allocated to digital transformation will likely experience budget constraints that may limit some or all of the process. It is essential to be aware of and prepared for budgetary challenges.

While digital transformation requires new investments in the company, people, and customers, it is not a race. A well-built strategy uses the budget as a reality check to plan phases and objectives. The plan can be spread out over several years if that is what is necessary.

Furthermore, a keen assessment of potential and actual ROI helps businesses determine the best allocation of budget. When business leaders hold technology, people, and processes to a high success standard, enterprises see a positive return on the investment in digital transformation.

Failure to Keep Up

Just as the Internet has disrupted businesses across all industries, the evolution of big data, IoT, and AI are set to disrupt the market once again. Technology is more than just an application or product. New, technology-forward companies are revolutionizing entire business models, and legacy businesses that fail to move quickly will not survive.

This perilous end is nearly inevitable for businesses that do not adopt digital strategies. It is also a threat to businesses undergoing digital transformation. Even as legacy businesses work to incorporate new approaches, disruptive companies are creating different ways of conducting business, and customers are growing accustomed to improved service and products. These businesses might look innocent in the beginning, but they can be a direct threat to enterprises.

To compete with these disruptors, stakeholders must keep a sharp focus on new and upcoming businesses and business models. Furthermore, successful businesses leaders will hire innovators who work to change the way their industry operates.

Wrong Digital Tools for the Business

Even when employees are on board and customers’ needs are identified and addressed, digital tools often fail to provide the desired outcomes. In these moments, many stakeholders might believe that the entire process has failed. However, more likely the issue is that the digital ecosystem is not aligned.

Designing an ecosystem before investing in technology can help alleviate this problem. The interactions between customers, employees, suppliers, distributors, partners, agencies, and competitors define the digital customer experience ecosystem. When the business meets the customer expectations, the ecosystem is considered successful.

When business leaders think holistically about the tools required to create the desired outcome, they can enhance the customer experience and reap the rewards of the transformation efforts. The digital age has simultaneously grown customer expectations and allowed for the enhancement of technology to meet customer demands. Stakeholders must carefully choose the technology necessary to create an integrated and useful ecosystem.

To learn more about digital transformation, check out our Digital Transformation Roadmap.

Download the Digital Transformation Roadmap

This entry was posted in customer experience, technology, today's customers, customer engagement, digital transformation

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