The need for digital transformation is more urgent than ever. In a recent survey of leading international executives, Forbes Insights and Hitachi Data Systems found that half of the 573 respondents had pinpointed digital transformation as their top strategic priority for the upcoming year. Further studies suggest that the number of companies aggressively pursuing digital transformation is growing especially rapidly in sectors such as retail and healthcare.
As the pace of digital industry disruption ramps up, companies who fail to prioritize digital transformation run the risk of being left behind the competition. However, even organizations that recognize digital innovation as a crucial strategic consideration are likely to encounter obstacles along the way. Transforming a digital vision into a reality requires the involvement of all levels of an organization and can often necessitate changes to the very foundation of business operations. The following are some of the most common challenges encountered by companies on the path to digital transformation, as well as the strategies to surmount them:
1. Envisioning the customer journey
Lack of vision constitutes one of the most common roadblocks to successful digital transformation. It can delay project development, generate internal confusion, and ultimately result in a slew of digital initiatives that are disconnected and collectively inefficient.
As technology continues to support, simplify, and enhance various aspects of daily life, it should come as no surprise that the majority of customers now expect to enjoy seamless digital interactions with businesses. With this in mind, companies seeking to develop their digital transformation roadmaps should carefully consider how each leg of the journey will impact the customer experience. Organizations should have a firm idea of the digitally enhanced value proposition they hope to offer consumers, ensuring that their digital efforts are rooted in the way customers experience their brand.
By analyzing how every aspect of the company will operate once it has reached digital maturity and how this will look to consumers, digital change leaders can form a comprehensive vision for digital transformation. This requires an up-to-date knowledge of technology trends and their impact on consumer behavior, as well as how competing firms are rising to these challenges. An understanding of these factors can go a long way in helping companies tie their digital strategies to the needs of their customers.
2. Gathering the necessary resources
In a recent study by the Economist Intelligence Unit, 88 percent of surveyed companies did not believe that they had sufficient technology resources to pursue new digital initiatives. Legacy systems and the cost required to update them stand as a significant barrier to digital transformation for many companies.
Before setting out to make innovative digital ideas a reality, organizations must ensure that their current IT systems can support the changes to workflow, content sharing, and data collection that often accompany digital transformation. Although new digital strategies often exceed the capabilities of older IT systems, it may not be necessary to completely overhaul a company’s technology infrastructure to pursue digital transformation. Most importantly, leaders should ensure that these systems are accessible and adaptable, with robust APIs and streamlined flows of information that allow everyone in the organization to work toward the shared goal of digital transformation.
3. Compiling sufficient data
A lack of data can be nearly as harmful as a lack of resources, as it can prevent proponents of digital change from garnering the support necessary to launch transformative initiatives. Business leaders must have the tools to make a data-based argument for digital investments and to assess the return on these investments.
When launching a digital transformation, it is important that companies have systems in place to collect data on customer behavior and the success of digital initiatives. They must also consolidate this data in a centrally accessible location. In doing so, they allow innovators to more easily synthesize data to glean insight into digital endeavors, the customer experience, and how both can be improved.
4. Fostering an agile company culture
In order to stay afloat amid the often-tumultuous tides of digital transformation, companies must have a culture that welcomes innovation and accommodates fast-paced change. Budding digital initiatives often benefit most from a “test and learn”strategy in which features are added, altered, or removed based on customer data and feedback. For this reason, organizations engaged in digital transformation must operate with a sense of urgency toward technological innovation and maintain development cycles that allow for ongoing optimization, free from significant delays related to funding, leadership, or compliance.
Even with efficient development frameworks firmly in place, many organizations will still experience cultural resistance to change. Employees at all levels of the organization may balk at the uncertainty presented by organizational change, worrying about its eventual impact on their responsibilities and authority within the company. While these concerns are natural, the reality of digital disruption often makes resistance to change far riskier than change itself. Leaders should work to create a company culture in which this is understood and in which employees can approach change with confidence. They can accomplish this by maintaining frequent, transparent lines of communication and by providing a clear mission for all team members to rally around, encouraging unity and stability even during times of uncertainty.