Change is good: 7 top digital transformation challenges

by Maarten Jansen
Digital transformation and launching new digital products helps companies adapt their businesses to a changing world. It calls for a re-imagination of every aspect of the business, as well as adopting new models, processes and tools. This is more easily said than done! Managing large-scale change and adopting new approaches is challenging. Here are seven of the main digital transformation challenges companies face, and how to address them:   

1. Creating a clear strategy

Since digital transformations involve all parts of the organization, focusing on the launch of the digital product alone will not guarantee a successful transformation. Creating a strategy that incorporates why the change is necessary and how the organization plans to incorporate it is essential to help create a strong culture of change involving stakeholders, customers and employees. It’s important to get to the bottom of any issues and address them when planning the next steps.

There are resources to support a strong plan, from change management plan templates to digital transformation consultants. A good change management strategy is followed by a strong implementation plan built on actionable and realistic steps to execute the strategy.

2. Complex technology

New technologies tend to put people out of their comfort zones. Enterprise software is complex, and challenging to integrate into an organization and introduce to end-users. Not all tech is created equal when it comes to introducing change however, and managers can select more intuitive and user friendly systems.

Digital tools should help create transparency and make information more accessible across the organization. The more information employees and partners can access directly without going through another layer, the better. Operating procedures must be adjusted to include these new technologies. It’s important that digital products are scalable and future-proof, and that decisions are data-driven. The DevOps approach helps incorporate feedback and support continuous improvement.

3. An agile approach to customer needs

The pace of change has been dizzying, and consumer behaviour is constantly adapting in unforeseen ways. While business processes are being adapted along the lines of the digital transformation strategy, things can shift in unexpected ways. It’s crucial to have the mechanisms in place to be able to pivot at short notice to meet customer needs. Applying agile methodologies to customer service helps keep companies nimble while creating continuity.

This includes using short feedback loops to make changes to offerings quickly while testing and iterating processes. Strong processes must be in place to digest feedback and measure success. While working on a long-term transformation, it may also be necessary to shift gears in the short term. Both can happen on parallel tracks: having a vision for the future and meeting the needs of the moment.

4. Having the right skills on board

In order to innovate a business and seize the opportunities of the digital era, skilled strategic thinkers and developers are key. Getting the right people on board is no easy feat these days, considering current labour shortages. The demand for certain skills is high, onboarding can be a lengthy process, and the costs put businesses under a lot of pressure. At the same time, expertise on issues like cybersecurity and data migration can make or break the success of a digital product.

Luckily not every skill needs to be brought in-house. Finding the right partners and outsourcing to the right experts can help solidify a company’s success. When choosing a partner, it’s important to look at their track record as well as to make sure visions and ways of working align. The framework of the collaboration in terms of timeframes, capabilities and limitations should also be crystal clear.

5. Getting security covered

Cybersecurity is more important than ever, and should be built into digital transformation strategies from Day One. The aim of digital transformation in more resiliency, efficiency and agility, and cybersecurity is essential to all of that. Change can create blind spots and vulnerabilities that can leave data exposed to attacks. Centralizing data or moving to the cloud have the potential to raise the threat level. Creating resiliency also means creating business continuity, and cyber threats can trigger service disruption. But remember, change is good: we just need to make sure we cover our backs.

The massive shift of data to the cloud requires a new way of approaching cybersecurity beyond the typical prevention and response. Having a cybersecurity expert on board from the beginning to proactively address potential threats makes a huge difference in lowering risk and creating successful change.

6. Keeping the budget under control

Digital transformation means investing in new technology, new expertise, and new processes. With so many new plans and projects, unforeseen costs can pile up and put budgets under pressure. There also needs to be a little space for trial and error, and shifting direction when necessary. Taking a lean approach when necessary can help things from getting out of control. At the same time, being less than ambitious can leave you with a half-baked transformation that leaves you less cost-effective over the long term.

Consulting people from across the organization helps create a broader picture that ensures all elements are factored into the budget. It’s also important to be aware of what the expected return on investment is from every spending item: it’s OK if things cost a lot, if you know that the investment will more than pay for itself. Digital product pricing depends on a lot of factors, but it’s always a good idea to start with a priced plan before exploring how to develop it.

7. A culture of change

The difference between simply digitizing processes and actual transformation is a change of mindset. A legacy mentality can create resistance to change and to new technologies. Leading for change takes empathy, and an understanding of how the change is going to impact everybody involved. Employees should be supported in navigating the change and updating their hard and soft skills.

However, it’s important to realize that a culture of change goes way beyond creating openness to new technologies. Team members must understand the Why, not just the How. Company leaders should cultivate a sense of ownership and engagement with a new customer-centric vision. Collaboration and transparency are key to breaking through old siloes and creating a culture of trust and a willingness to problem-solve. Getting everybody ready to embrace change is the number one requirement for transforming to meet the needs of the future.  

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