Summary: Digital transformation–the reinvention of an organization through the use of digital technology to improve performance–is a priority for many businesses these days. However, it’s no easy task. Businesses will encounter many hurdles on their digital transformation journey. In this article, we explore 6 such roadblocks and explain ways around them.
The world is going digital. From shopping to banking to communication–and everything in between–many of our daily tasks are now digitized.
The problem is, many businesses are not prepared for this new reality. The technologies, processes, and skills they have in place do not translate to a digital world.
This is where the concept of “digital transformation” comes into play. The modern company must transform itself and adopt the technology and processes needed to operate in today’s digital world.
How important is digital transformation to the modern business? A recent survey found that 80 percent of businesses view it as a priority. Business leaders clearly see the need to adapt to the new, digital reality.
However, this doesn’t mean that everyone is taking action. That same survey found that only 35% of respondents actually had a digital transformation strategy.
In short, most businesses recognize the importance of digital transformation. But few are actually moving forward.
What’s holding them back? Today, let’s explore that question. What roadblocks will you encounter on your digital transformation journey, and how can you move past them? While the list could certainly be longer, here are 6 common roadblocks to plan for:
1. Fear of Change
Digital transformation isn’t a small change. In many companies, it requires that employees operate differently. It means they must learn new technology. It means they must change.
The problem: People hate change. They get comfortable doing things a certain way. When they hear that they have to learn new skills or processes, many will fight it.
That’s why the first step towards digital transformation must start with the employees. As explained below, this fear of change must be addressed with education. Your employees must understand the reasoning, and the benefits behind these changes.
“While there is a lot of talk about the technical aspects of a digital transformation and these are important, the hardest hurdle is usually the organizational change required to make it happen,” says Nic Grange, CTO of Retriever Communications. “Digital transformations typically require significant organizational changes that include bringing in new skills, changing processes and creating new teams or even whole new departments. Like any significant change, the organization has to plan the transition. Major changes can be unsettling for employees which is why it is so important to ensure that staff are included and informed throughout the process. People need time to get use to the changes. They need to understand why the change is happening and how it will affect them. How hard the transition is will often depend on the company culture and how much it embraces change.”
2. Lack of education
It’s not always fear of change that leads to employees ignoring technology. Oftentimes, the technology is implemented without their input or knowledge. They have no idea what it is, or how it helps them in their job.
Unfortunately, this happens far too often. Employees are told to use a new tool, without any explanation behind the change. If you want to eliminate this roadblock, involve the users. Ask for their input, and educate them on the ways the new technology will help them in their day-to-day job.
“People will almost always actively reject (or at least delay implementing as long as possible) a tool that they had no hand in choosing, that they haven’t had the chance to see used in context, and that they’re expected to use for the first time in front of a client or a boss,” says Wayne Turmel, Product Line Manager, Remote Leadership Institute. “The three things that will help people overcome what Gartner calls, “The Hype Cycle” are:
- Not only the logic behind the new tool, but is the pain of using the old one sufficient to seek solutions (if it ain’t broke, no one’s in a hurry to fix it)?
- Have we seen the tool used in context, solving OUR problem, not some generic discussion of features?
- Do we have the time to get trained on it, use it and practice in a safe environment before we are expected to “go live”? And no, YouTube videos and “online tutorials” are not enough for most people, despite what vendors and IT people think.
In short, in order to truly change the way a company uses technology, the organization must position the tool in terms of the work people do, give them a chance to experience it in as close to real-world conditions as possible, and let them get their hands on it with no one watching.”
3. The talent gap
Digital transformation requires modern skills–which is something that far too few businesses possess. As explained in this article:
“The central importance of talent reflects a broader issue in the IT field today: a structural mismatch between in-demand roles and the skills and experience of the talent available in the marketplace.”
How bad is the talent gap right now? According to the survey mentioned above, only 17 percent of businesses have the right skills to tackle digital transformation. As explained below, this is a challenge facing nearly every business these days.
“A digital transformation normally requires a significant number of new skills and knowledge to be acquired by the organization,” says Grange. “That may come in the form of new hires, external consulting or training existing staff. Organizations look to new technologies to give them a competitive advantage. These new technologies require new skills which are often software related and range from infrastructure automation to creating mobile applications. Automating processes that can scale and be done frequently at little-to-no extra cost is often a focus. So is trying to mobilize the distribution of your content or services and engaging with customers.Many organizations look to leverage cloud services to fast track these but even they require new knowledge and processes. The problem is that many organizations are going through the same digital transformation process which has caused a shortage of people with the skills required. This means that companies will likely need to invest more in external cloud services, external consulting and re-training their staff.”
How can you address this skills gap? While we won’t get into all of the ways in this article, it’s a topic that’s covered in more detail here: 6 ways to bridge the IT skills gap.
4. Data accuracy
Digital transformation requires new technology and processes. But, what lies at the core of the new digital ecosystem? Data.
At its roots, digital transformation is all about data accessibility. It’s about putting data at your fingertips. It’s about capitalizing on the increasing flow of information.
The problem is, data exists in many places (and formats) across a business. Before you can embark on any digital transformation project, you must ensure that data is accurate, and in the correct formats.
“One of the biggest roadblocks to the “digital transformation” is the issue with parsing old data versus new data,” says Matthew Mercuri, Digital Marketing Specialist for ERA Environmental Solutions. “Questions of accuracy and reliability really come into play. Which data do you use to implement new processes for the future? Which data set is used to make impactful business decisions? You need salient, parallel and equal data to make informed decisions.”
5. The starting point
Digital transformation can be an overwhelming job. The problem is, the size of the project often keeps businesses from making the first step. They see all the work required for this project…and put it off.
However, ignoring digital transformation only hurts the business. The longer they wait, the farther behind they fall.
How can you get past this hurdle? Start small. As explained below, pick a process that provides the most value to your business, and work on that first. This not only gets the ball rolling, it demonstrates value that will bring other business leaders on board.
“Research analysts highlight the importance of a long term strategy and leadership,” says Neetika Khanna, Marketing Manager at Data Capture Solutions. “However, most of our customers struggle to translate the strategy to implementation plans and often ask the question “where do we start?” To decide a starting point businesses need to identify a business process which would benefit most from digital technology and also evaluate the effort required to transform the process. Dependencies on other business processes is an important consideration which is another roadblock explained below.”
6. Legacy Integration
In most cases, digital transformation isn’t a complete overhaul. Sure, you’re bringing in digital technology and removing outdated processes, but you’re not throwing everything out. Rather, you’re picking and choosing which pieces of your existing technology can stay, and which should go.
The problems arise when integrating the old technology with the new. As explained below, this can create roadblocks and unexpected costs.
“Although budgets are being set aside for digital transformation projects for new technologies to be implemented, they often don’t integrate with legacy line of business applications,” says Khanna. “That’s where organisations hit a roadblock and are forced to free up more budget to either upgrade legacy systems or to spend on IT effort and develop custom integrations.”
If you’re stuck with legacy systems, what are your options? We won’t get into every option here, but you can read more about the topic in this article: 5 ways to rejuvenate your legacy applications.
These are just 6 of the roadblocks to digital transformation, but the list could certainly be longer. Would you add anything to this list? If you would like to add anything to this list, I’d love to hear it. Feel free to share in the comments.