5 Digital Transformation Challenges Facing the Enterprise
5 Digital Transformation Challenges Facing the Enterprise
Going digital is becoming a non-optional implementation strategy for businesses that are striving to maximize revenue, productivity, and customer experiences. Enterprise business leaders are fighting to stay ahead of their competition and implementing digital technologies to improve and transform the way we live and work. According to Thomas H. Davenport and George Westerman, the digital transformation is an open change in all areas of business processing.
This change involves the integration of digital technology into all business operations and the blending of people and machines. Thus, setting clear benchmarks and understanding the issues will enable the successful implementation of digital transformation.
Transforming an enterprise in this digital era becomes harder and harder as many issues arise in doing so.
Lack of a clear vision and plan
Going digital is often difficult for any firm. More at stake than a simple move, it is the combination of different jobs, skills, and competencies inside and outside the company.
Without a clear picture of process execution, leaders have been unable to answer vital business questions due to the high levels of variability in the ways processes and business operations function. How do they ensure processes are being followed according to plan? How do they even know what those processes are and how they operate?
Starting a transformation journey without benchmarking and then forming a plan for each step will result in failure. To prevent the digital transformation from becoming a simple project task and to keep in mind the reasons for exiting the project, long-term planning for the adoption of digital intelligence is necessary.
Accordingly, companies need to determine the steps in the transformation process, what is needed before committing to it and rethink the company’s design and strategy. The overall success of the project also depends on how quickly end-users adapt to the changes when a company successfully completes its digital transformation.
Adequate resources will, therefore, need to be put in place from the outset so that they are well seasoned prior to commissioning to ensure that users are properly equipped.
Organizational resistance to change
Digital transformation means a change in the way a company operates and organizes its employees. By influencing the company’s organizational culture, it can challenge the role of every employee within the company.
The company’s organizational culture, which is critical to the success of the transformation, requires teams to coordinate and collaborate throughout the process. As a result, it is imperative to proactively address and introduce the necessary changes to digital culture.
There is also management support for cross-functional execution in each component of the business, human resources, marketing, and IT. Collaboration between stakeholders must be intentional in building a digital culture, including modifying existing technologies and structures that could be the barrier to successful transformation.
Having a vision will help to meet the digital needs of customers, set objectives based on need, and implement them over the long term.
Lack of expertise
Even after making a detailed plan to move steadily towards digital transformation, it takes a combination of expertise and technology to get through it. A company that is new to the digitization processes should then seek out the people with the skills needed to cope with the challenge.
A Jabil study revealed that only 23% of manufacturers admit to having an enterprise-wide strategy for their digital transformation. That leaves a whopping 77% with no enterprisewide strategy, focus, or implementation plan.
As with any other part of your business, you need to clarify a vision, set goals to achieve it, and give your entire team a purpose. Without a strategy and a goal, you probably have been able to have your head above water, but don’t count on it for long.
Surprisingly, 38% of the companies surveyed have an individual business section or product line driving the digital transformation of their enterprise or vertical.
But as Jabil says, “the journey of digital transformation does not belong to a single individual or department”.
Departments may be responsible for executing part of the strategy, but the entire company must work towards the common goal.
And whenever you’re wondering where to start, always start by thinking about the stakeholders that keep your business alive: your customers. Your business was created to meet an unmet need. Let that need guide you in knowing who you are, what you do, and why you do it as part of the digital transformation as well.
The Data Challenge — Ineffective use of data
Another challenge facing companies is data management. Successful digital transformation depends on efficiently managing the collection, storage, and exploitation of the abundance of data available.
In the modern enterprise, every action, event, or transaction is recorded in a log along with many other important attributes describing who did what, where they did it, and lots of other information about things happening operationally. These workflows typically span across different systems that do not all link together perfectly, thus creating silos of information and an incomplete picture of the business’ operations.
The integration of technologies such as Artificial Intelligence, cloud computing, flow analysis, etc. is imperative for the effective use of data, as well as in customization efforts.
The amount of data to be collected and analyzed is enormous and misuse would result in failure of the process. Better customer experience and profit margin are the results of better decision making based on accurate data.
Lack of budget
Budgetary constraints are another challenge that can prevent any digital transformation.
As businesses lack inexhaustible financial resources, they may find it difficult to finance their own digital transformation. Indeed, when they have not anticipated such an investment, they fear that they will have to draw on resources destined to be used for other projects.
While the digital transformation may need new and sometimes significant investments in your business, your employees, and your customers, remember that it’s not a race.
When developing your strategy, you can your budget as a reality check to know what your business can handle. You can also develop a plan that includes several phases over several years if that’s what’s needed. Don’t put your business at risk over budget issues.
While these are the most common challenges shared by survey participants, there are many others. Basically, remember to build a solid foundation first. One that delivers a wide range of results for your business, your customers, and your employees.
With a spirit of continuous progress and innovation, all the profits of a digital transformation are within reach. Make sure you meet challenges as they arise and do your best to prepare in advance.
Discover Past Posts