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Challenges of Digital Transformation

5 Common Challenges Of Digital Transformation

Digital transformation has taken over the business world. Companies everywhere are evolving to keep up with constantly changing customer expectations. And while digital transformation is absolutely necessary, nobody said it would be easy. And it definitely isn’t. There are lots of challenges of digital transformation that organizations must face and overcome. And these obstacles surface regardless of whether organizations are undergoing their initial transformation, or are consistently working towards achieving digital maturity.
 
But fret not.
 
Michael Gale (founder of Strategic Oxygen and a partner at PulsePoint Group) says:

“One of the most basic impediments to moving forward on the road to digital transformation is whether or not enough people within the organization are aware of the challenges…Basic awareness about those challenges is probably the key indication of how well the process will be successful.”

 
In the spirit of being aware, here are some of the most common challenges of digital transformation that organizations encounter.
 

Resistance to Change

Change is hard, regardless of the circumstances. In terms of digital transformation, it isn’t just a one off event, changing one element of the company and being done with it. Digital transformation is a change of lifestyle. Organizations evolve their company culture to reflect the digital world. According to a study done on the state of digital transformation, changing company culture was the top challenge with 63% of participants listing it as their number one issue.  Without willingness to change, digital transformation fails miserably.
 
There are multiple layers to changing company culture during an organizations digital transformation, including revising work systems, utilizing new technology, and altering mindsets. And this is, of course, easier said than done. Workers become accustomed to certain processes and tools, and don’t respond well to having those systems switched out for unfamiliar technologies. Especially if the change is sudden, without any input from the workers themselves, and without any training on the new systems. Leadership is resistant to change too, unwilling to change their business models to a more flexible, digital one. And of course they are often opposed to spending more money or changing the budget as necessary.
 

Lack of Clear Vision

Read any article out there on digital transformation, and they will stress the importance of a digital strategy. However, implementing a long term digital strategy is more complicated than it seems. A BT CIO Report found that 39% of organizations report implementing a digital strategy across the organization as their biggest digital transformation challenge.
 
One of the reasons implementing a digital strategy is difficult is because there is a lack of a clear vision. Objectives need to be set and timelines need to be established. But this often is neglected, with only 25% of CEO’s having a clear plan in place and less than 15% funding and executing that plan (MIT Sloan and Capgemini). Without a clear roadmap guiding your digital transformation, projects will fall off track or end disastrously. And your organization’s transformation may not be aligned with your overall company message.
 

Lack of Knowledge

Organizations often face the challenge of having to undergo digital transformation without the knowledge and context necessary to achieve it successfully. This could be for a number of reasons. The most likely one however, is that companies lack the full support of upper management. So they rush the process to make it a more desirable option. Or they cannot secure the time or resources required to gather information.
 
It is difficult, if not impossible, to engage in digital transformation without knowing all the factors. How does a company know what to change, address, etc. without knowledge of their current systems, customer expectations, employee needs, industry trends and available technologies. All of these aspects need to be fully understood in order to make your digital transformation successful and on track with what the digital world expects.
 

Lack of Resources

Another one of the challenges of digital transformation is the difficulty acquiring resources for the process. An Adobe Digital Marketing Survey found that 41% of companies report gathering the resources needed to advance digital maturity as very challenging. And only 25 percent of organizations say they have the “necessary internal resources and competencies to support digital initiatives” (The Hackett Group).
 
Resources in this case could mean a number of things, budget, tools, people, time, etc. Regardless, your digital transformation journey will be doomed if it isn’t set up for success from the beginning.
 

Too Much Complexity

This is where all of the challenges overlap into one. With so many obstacles to overcome while undergoing digital transformation, deciding which challenges to prioritize has become it’s own challenge. According to a study done by MIT Sloan Management Review, 43% of executives see too many competing priorities as one of the top five barriers keeping their organization from taking advantage of digital trends.
 
Another layer to this is the fact that digital transformation initiatives are led by different individuals: CMOs (34%), CEOs (27%), CIOs/CTOs (19%), CDOs (15%), CXOs (5%) (Altimeter Group). There can absolutely be multiple people involved in the process. But if there isn’t a clear person in charge it can cause chaos and slow things down. The bottom line is that any unnecessary complexity (with leadership, priorities, etc.) takes up energy, time and other resources that could be used elsewhere.
 

Conclusion

If after reading this post listing the challenges of digital transformation you feel discouraged, don’t despair. Take this knowledge and use it for motivation. You are not the only one who will experience challenges during digital transformation. And companies are successfully engaging in digital transformation despite these obstacles, which means you can too.
 
Remember, digital transformation isn’t a one off event. Facing these challenges and failing doesn’t mean you are out for the count. A common expression in the world of digital transformation is to fail fast and learn from your mistakes. Take this list of challenges and use them to prepare. And if you fail the first time, dust yourself off and try again.
 
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