Digital transformation
7 min read
22 August 2023

Biggest Digital Transformation Challenges

Kelly van der Horst
digital transformation

Ignoring how modern technology is changing the way in which businesses deal with traditional matters could be detrimental for the advancement of the company.

Digital transformation affects things at every business stage. This may bring challenges, but it’s about how you’re able to address these challenges and turn them into opportunities that matters the most.

Digital transformation opportunities pave the way for innovative IT systems, upskilling of talent and infrastructure investments. You can also get the best of both worlds when you find a way to successfully integrate people with technology.

The challenges and solutions of digital transformation

Let’s dive into the biggest digital transformation challenges and how you can tackle them.

Challenge 1: Organisational Culture

The people who make the company function on a daily basis are going to need your attention. Change is hard, and you can be sure that workflow changes will be met with resistance by some – especially those who are risk-averse, or due to the beloved corporate politics.

Forget about thinking that employees will just wake up one day ready to embrace change. There needs to be a transitional plan in place to manage the change throughout the process and ensure that you do not overwhelm your employees.

Challenge 2: Lack Of Expertise

Technology is necessary for digital transformation, but so is talent. One of the biggest digital transformation challenges is the lack of expertise to implement and oversee the transformation. Especially because it requires a more mixed skillset than was the standard before, with a mix of both hard and soft skills and innovative ability. But, this is what will be necessary to carry you through digital transformation successfully.

While it may come at an added cost, it’s important to invest in training your workforce on how to work with the new systems. Even if you have to hire some new employees or partner with other businesses with the necessary expertise, this will only benefit you in the long-run.

Challenge 3: The Structure Of The Organisation

Daily routines are constantly changing and your organisation needs to be agile, so that transformation can run its course. You may need a complete organisational makeover and it might just require more makeup than you anticipated. It may mean changing roles, even considering whether you still need certain departments, breaking down company silos and complicated hierarchies.

So, how are you able to do this in the most effective way?

Well, there needs to be enough breathing room so that processes and changes take place in a way that flows. Doing things the way they’ve always been done before might not work effectively anymore, because what’s ahead is going to require you to adapt.

Challenge 4: Where’s The Digital Transformation Strategy?

One of the biggest digital transformation challenges comes with planning. So, it’s probably a good idea to backtrack a few steps and think about whether you even have a concise strategy or if you just make it up as you go along. Proper digital transformation requires clarity with your vision, goals and purpose. Progression will require you to do more than just survive. You’ll need to thrive so that you constantly stay ahead.

Everyone in the organisation has a role to play, as digital transformation requires input and effort from everyone. There’s no one-sided story here because that will not allow for a common goal and purpose.

Challenge 5: Is There A Budget?

Budgetary constraints play a big role in hampering digital transformation. The reality is that money does not grow on trees. This means that you always need to be well prepared and looking out for changes that may arise. Then, you need to ensure that your budget is sufficient enough to deal with those changes. Especially since many organisations are trying to maintain their legacy systems at the same time they’re trying to transform, putting a strain on the budget – which we’ll get into later on in this article.

Be realistic in terms of the budget for what you can afford as a business. Digital transformation is an ongoing, gradual process. It requires fluidity and flexibility within your organisation. This needs to apply to your budget allocations as well to prevent you from being ill-prepared.

Challenge 6: Company Siloes

Traditional business models are more siloed, leading to another one of the main digital transformation challenges that companies face.

Digital transformation requires information to flow free through an organisation and collaboration to happen across teams and departments. However, company siloes get in the way of this.

Company silos refer to separate divisions in your organisation, often based on teams or departments, that work independently from others. For example, when your Sales team only collaborates and communicates among itself, they (and of course the other departments) lose out on valuable collaboration and information-sharing, for instance by not sharing important customer insights through Sales conversations with the Marketing team.

It also hinders the ability to offer customers an omni-channel experience. Early on in their journey, customers will probably jump around from channel to channel, from the app to the website and perhaps even in-store. With the rising importance of the customer experience, it’s imperative to offer them a seamless experience across all channels. The only way to do this, is if all people responsible for those channels are informed and aligned.

Although company siloes can stand in the way of a successful digital transformation, it’s important to note that the breaking down of these company siloes are an important element of the digital transformation process itself; by transforming your organisational structure and creating a digital culture.

Challenge 7: Optimal Use of Analytics

Another one of the biggest digital transformation challenges is how to monitor and use collected data. Gone are the days when analytics was simply nice to have. Nowadays, monitoring analytics is imperative and something a lot of organisations struggle with.

With Artificial Intelligence (A.I.) and sophisticated analytics platforms, it has become easier to track trends and gain deeper insights from data. However, nowadays there’s so much data to collect in so many different ways, it may be difficult to filter out, organise and utilise the data that is valuable to you.

It’s therefore important to have a dedicated strategy when it comes to data. Instead of it being a task that you would much rather avoid, up-to-date analytics systems allow for better, easier data collection and personalisation. Make sure you have the right systems and people in place dedicated to do so, whether it’s internal or external. This means that your organisation can easily monitor data and make better, more informed decisions.

Challenge 8: Legacy Systems and Software

Lastly, companies face digital transformation challenges when they do not want to try new systems. Many organisations feel stuck because of legacy issues coupled with a short term view. Perhaps you’re holding on because this is all you know. But, doing this leads to many missed opportunities due to outdated systems.

Oftentimes, insecurity about the transformation also causes people to want to hold on to their legacy systems and transform on top of them. Resulting in, for one, a bad transformation foundation, as well as causing big constraints on resources such as budget and man hours.

Another common pitfall when it comes to legacy systems in digital transformation is that people try to get rid of all their legacy systems at once, not only creating one huge transition project, but again putting huge constraints on resources.

Digital transformation won’t take kindly to lagging legacy models because it needs to be solution-oriented and innovative. It’ll require all hands on deck to avoid being stuck in the dark ages.

Final Thoughts

Besides its challenges, above all digital transformation brings about endless opportunities. From here on out, it’s about making strides to move forward – not backward. Digital transformation is not just something that’s “good to do” anymore, it has become essential to the long-term survival of your business.

Digital transformation challenges and opportunities almost come wrapped as one package, allowing organisations to establish solutions to problems that may arise.

Using a platform like Workspace 365 can help address many digital transformation challenges you may face. You can create an all-in-one, adaptive workspace where your employees can easily access anything they need, so that your business can function and adapt to changing digital environments seamlessly.

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