In the early days of Covid-19, companies were preoccupied with enabling remote work, maintaining the digital infrastructure to support taxed supply chains and keeping business systems humming along. Yet, as they begin to stabilize new ways of working, they’re shifting their focus back to more strategic, long-term digital transformation initiatives that leverage changing markets and new opportunities. While the pandemic caused companies to tighten their belts in 2020, in 2021, that trend is reversing, with the understanding that technology is the way forward. In fact, according to Gartner, worldwide IT spending in 2021 is expected to grow by 4% in 2021, totaling $3.8 trillion.
Yet, while it’s clear for many companies that digital transformation is the way forward, it’s not always easy. According to a Boston Consulting Group study, only 30% of digital transformation efforts meet expectations, with the vast majority of them falling short
There are many things that can stand in the way and impede digital progress. Consider the following five roadblocks:
Not Understanding The Problem
Companies may be experiencing declining sales, customer churn or disgruntled employees—they often know they have a problem that could be addressed with a digital transformation of some sort, but have no idea how to solve it. Before beginning any type of digital transformation—or any major company change for that matter—you should begin by gathering all stakeholders guided by design experience professionals, to get input into desires, goals, fears and frustrations. By getting to the root cause of the problem and hearing about it from each stakeholder’s perspective, you can design a solution that is wrapped around the specific business problem. You may even realize that the problem cannot be solved digitally, and that’s okay, too, since it can save lots of money in the long run.
It’s difficult to begin a digital transformation journey and convince others in your organization that it’s the right approach when there is so much confusion around what it even means. Digital transformation is often confused with digital modernization, but the two could never be more different. If you are opening up new digital channels and revenue streams through the initiative, or if you undertake a robotic process automation (RPA) project or integrate AI into your systems to automate processes, then that is a true digital transformation. On the other hand, if you take your same existing software and move it to the cloud or a mobile app, or update it with new features, it’s most likely modernization. As a good rule of thumb, AI or RPA almost always leads to digital transformation.
It’s important to explain exactly what digital transformation is and what it is not before you unleash it on your organization.
One of the biggest barriers to true digital transformation success is change management. The benefits of and reasons for the initiative need to be owned and communicated from the C-suite and address the fears, concerns and reservations of all employees. Digital transformation can be disruptive; it changes traditional processes, roles and expectations, and it can cause corporate mayhem before it becomes operationalized. When it comes to AI or RPA, employees often fear that it will take away their jobs, and companies are often reluctant to put corporate decision-making into the hands of a machine. For these reasons, it’s necessary to implement change gradually, involve all stakeholders, clearly articulate the benefits and reasons for the initiative and provide an open forum for questions and concerns.
Another thing many larger enterprises do is establish a center of excellence (COE), where you essentially train the trainers, who can take the body of knowledge about the project to the group and ultimately across the organization.
Lack Of Resources
It’s interesting to note that most digital transformation directives don’t come from the CIO, but the CEO. Often, it’s not a technology problem that needs to be solved, but a business one. While the CIO will certainly have some say in the digital strategy that will be implemented and how it fits in with the existing tech stack, it falls on the line of business execs to champion it. The problem is, however, that those execs need to stay focused on the core business, and they lack the technical expertise required to put technology to work to improve it.
Many companies leverage external partners to help them with their digital transformation projects. Working closely with line-of-business, they can provide them with the technical expertise, data scientists (who can be in short supply) and outside perspective that can shape digital strategy attuned to specific companies’ needs.
Trying To Boil The Ocean
Most digital transformation projects can be quite expensive and require lots of internal and external resources, so it’s quite natural that there should be some evidence that it will be successful. By taking an incremental approach that starts with an innovation sprint, companies can minimize the risk of failure. This is a proof-of-concept, often conducted with AI projects, where small pieces of the project are tested to determine their accuracy. By taking baby steps—testing, reworking and testing again until desired results are met—companies can be more successful in the long run.
The fact that companies are resurrecting their digital transformation projects, which may have been on the back burner during the early days of Covid-19, is a good thing—it means that we’re turning the corner toward the next normal in business. By anticipating the barriers to adoption and taking a strategic approach to implementation, you can ensure that digital transformation truly brings about the change you’re looking for to drive your business forward.
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