According to the State of Enterprise IT 2018 survey, about 98% of enterprises are already involved in digital transformation initiatives. Also, CEOs and other senior-level executives have increased the IT digital transformation budgets in the past few years.
However, enterprises with grand digital transformation goals must take caution: The road to successful digital transformation will not always be smooth. You will have to face a number of challenges that will block your way.
Here are the 5 key challenges that may arise during digital transformation projects and tips to get rid of them.
1. Organizational Culture
Gartner’s research reveals that ‘Organizational Culture’ is one of the biggest impediments to successful digital transformation projects. Even if you come up with a robust digital transformation strategy, governing organization-wide change can be a huge challenge.
Failing to communicate the importance of digital transformation across the enterprise might lead to resistance amongst the employees to change. Employees usually resist any change until they are made aware of the real impact the change will bring in their work life.
Company culture and good communication paves the way for a successful digital transformation. It is important to encourage employees and other stakeholders to get accustomed to the digital culture, tools, technology, and solutions. It will help your business to persuade the workforce during the transformation phase.
Be involved in the ‘Active Communication’ of the vision: why the digital transformation is necessary and how it will affect the organization. It is important that you intertwine your digital strategy into the business strategy. Successful digital transformation needs the whole organization to be involved in making it work. Thus, approach this transformation program as a product and brand it.
2. Lack of IT Resources and Management
Poor resource management planning and lack of IT resources are some of the critical challenges that could hurt the success of your digital transformation journey. In terms of IT resources, lack of manpower and talent war are two aspects that act as a hurdle to a successful digital transformation.
There is a clear shortage of digital workforce and without them, you can never succeed in your digital transformation efforts. Thus, it is important to take this challenge seriously and get rid of it prior to embarking upon a digital transformation journey.
Digital transformation requires a careful approach and having an inefficient team and a weak strategic plan can make the job difficult during the transition phase. Thus, invest in digital talent and build a pool of talents with strong prowess on technology and solutions. Make sure, your HR department is equipped and skilled to bring innovative solutions to bridge the digital skills gap.
Have a clear plan for the resources available and the need for further digital talent to take the digital transformation forward.
3. Lack of Clarity on the Digital Transformation Budget
A capital plan for the digital transformation process is one of the biggest hurdles that could hamper the entire project. Setting up a limited budget for building digital solutions and transformation process can be bewildering for most business heads.
To undergo a digital transformation, an organization needs to make an investment in acquiring the right technology and the right digital experience team to execute it. European insurer Axa, for example, invested €950 million over just two years.
Thus, the whole process requires a good amount of capital, which may initially lead to lower profits, but in the long run, this investment will become one of the primary reasons for your business success.
This lack of clarity on budget affects the decision making and forces the leaders to step back when it comes to digital transformation funding.
Have a strategy in place for the long-term with a budget in mind. Organizations that are firm on its foundation and have a good capital plan on its table, are ready to embark upon their digital transformation journey.
One of the key components of a good capital plan includes the CEO’s allocation process in the digital transformation journey and the tempo at which it should operate.
4. Digital Security
Data security is a concern for most visionaries as cybersecurity is complex, dynamic, and fast-changing. The latest reports from industry research experts like Forrester and Gartner are pointing towards the same concerns.
Thus, successful digital transformation requires a transformation of security as well, which is a top-most challenge faced by a number of organizations when embarked upon a digital transformation journey.
Follow a security-first approach. Security must be embedded into all applications as the first line of defense. Start to deploy security controls across many different internal, public, and cloud environments. A good ‘organization security’ strategy as mentioned in one of our previous blogs should include the following features:
The organization’s employees are getting the tools more connected, engaged, and mobile.
Nonstop connectivity, rich collaboration to support deeper engagement, and security everywhere.
Deploying an end-to-end, policy-driven security approach to better secure every aspect of our value chain.
Even CEOs rate security as the top-most characteristic that enables the organization to become a digitally transformed organization.
5. The Agility Challenge
Agile Transformation is at the heart of Digital and scaling is important for any successful Digital Transformation in large enterprises. Even a study reveals that 68% of companies identified agility as one of their most important initiatives of digital transformation.
However, becoming agile prior to embarking upon a successful digital transformation journey is a challenge and many organizations fail in their agile transformation process.
The parameters that play an indispensable role in laying the foundation for scaling agile capabilities and approach at the enterprise level are Agile teams, flexible architecture, and efficient release management.
a) Flexible Architecture is aligned to create releases. Micro-services and open APIs create a flexible, extensible architecture that can manage diverse technologies while reducing costs at the same time.
b) Agile Teams (both onshore and offshore) are utilized to support these efforts. By establishing offshore-capable development and test environments, firms can leverage different time zones to accelerate development cycles.
c) A dedicated release management function facilitates ongoing management, verification, and communication about the scope of releases in multiple iterations. Application release automation tools should be applied to support continuous delivery.
Digital transformation is a complex process and considering its complexity, it is vital for organizations to create a substantial ecosystem to seamlessly drive change. Prior to embarking upon a digital transformation journey, build a strategy that will eliminate the roadblocks to DX, thereby ensuring a digital success.
Note, investing in emerging technologies won’t equate to complete successful digital transformation. People, Process, and Technology move hand-in-hand to form the foundational elements while strategizing DX efforts. Make informed technology investments, it will deliver real value both to the organization and your customers.