How to triumph over your digital transformation challenges

With investments of $1.3 trillion in 2019, it’s clear that many companies took the leap to speed up their digitalisation efforts.¹ Yet, according to Forbes, 70% of these initiatives never reach their goals.² This high percentage shows the real extent of digital transformation challenges facing businesses today. And while some companies have taken advantage of their digital transformation strategy, others are still lagging behind.

This article explains what is at stake for companies when tackling digitalisation. It also presents four ways that leaders can triumph over digital transformation challenges.

Benefits and challenges of digital transformation

At the beginning of 2020, FinancesOnline published statistics on the benefits of digital transformation for companies.³ Their research shows that the top three are:

• An improvement in operational efficiency (40%)
• A response to changing consumer expectations (35%)
• A bettering in the quality of new products (26%)

Beyond any doubt, technology is at the service of businesses, enabling them to achieve higher productivity at lower costs. When technology and businesses come together, there are many benefits which can be seen at all levels of an organisation: 

• Businesses are more efficient: new technologies like the latest applications, software, sensors, analytics, and smart devices can improve performance. 
• Productivity increases: with the rise of Big Data, and predictions related to the analysis of collected data, companies are spending less and achieving more. There is a need for fewer human resources and better control over assets. This results in fewer losses and increased gains.
• The return on investment is quick: findings show that it takes only five years to see the ROI in digital.⁴ 
• Employees’ sense of security increases: by using robotics and automation, employees are enabled to work more efficiently. This is a decisive factor in increasing motivation and optimising performance.  

As well as the numerous benefits, digital transformation brings a lot of challenges, too. Let's take a closer look at five key challenges of enterprise digital transformation.

1. Moving forward blindly

A common error that defeats the purpose of digitalisation is not having a clear digital transformation strategy in place. To get off to a good start, you first need to understand your company's level of digital maturity and its specific needs. Secondly, you need to establish a roadmap of the customer journey, based on data collection, research, and other methods. This help is invaluable in organising the digital strategy of your company.

2. Having a short-term vision

Despite its innumerable benefits, digital transformation is still seen by many leaders as being too risky. This fear of uncertainty results in decisions to deploy short-term plans. More often than not, these do not bring about the expected results. Studies reveal that a company can expect to reduce 30% to 99% of the total costs of service in the long-run if it goes through a process of transformation.⁵ While this range is still quite broad, companies can expect, at the very least, a 30% reduction in their total costs. Still, these benefits will not be visible in a few months, but in several years, so long-term thinking is required.

3. Keeping the same corporate culture

In overcoming digital transformation challenges, redefining your company's corporate culture is key. Yet, this challenge is often underestimated. McKinsey published a study that confirms this.⁶ It reveals that modifying an organisation's culture is more difficult than adopting new technology.

4. Separating business and IT

One of the biggest digital transformation challenges is connecting business and IT. In today's digital age, the two have become inseparable. The question is no longer whether to involve technology in your business model. But rather 'when', 'how' and 'how quickly' this can happen at scale. John Mullen, CEO of North America at Capgemini explains that ‘no digital transformation will be successful if business and IT are not on the same wavelength’.⁷

5. Lacking leadership skills

Any digital transformation process requires strong leadership. Its purpose is to guide the implementation of both decisions and digital strategy. Some leaders may lack an overview of the variety of digital transformation challenges, so it is common that many are hesitant to embrace change. When this happens, it can cause serious problems and delays in completing the company's digital transformation. Some of the pitfalls that leaders should avoid are an overall lack of clarity and communication with teams, as well as implementing new technologies without making sure that they are the most suitable solutions.

Without question, there are many challenges associated with digital transformation. Now, it is important to see how organisations can triumph over these challenges and reap the benefits.

Four ways to overcome digital transformation challenges

1. Develop a long-term vision

Investing in a multi-year plan with a clear digital strategy helps you to set precise goals. Taking the versatility of the market into account, it is also important to develop a transformation roadmap. This way, your company is more adaptable. Testing it on a large scale, both in-and-outside of the company, can get you the feedback you need to make the right adjustments. Moreover, studying consumer expectations needs to become a core priority in order for you to reach your goals.

2. Show ambition

The right combination of innovation and transformation often leads to a successful digitalisation. That is why it's necessary to distinguish between the two. Transformation involves adapting to novelty, whilst innovation involves taking risks. However, no company should limit itself to taking half measures if it aims at achieving its goals. To overcome the challenges of digital transformation, companies should take risks. To get you inspired by successful digital transformation, we have gathered some of the top digital transformation examples.

3. Evangelise a strong digital culture

It goes without saying that digital transformation happens because of the people involved. Thus, to overcome your digital transformation challenges, you should:

• rethink your company's structure, and the way your teams work
• introduce new, intuitive solutions that ease teamwork and communication
• invest in digital training, and hire digital talent

4. Leverage data

Some view data as one of the main challenges of digital transformation. The reason being that decisions are now made on the basis of collected data. Companies that utilised Big Data before other players in the market are now proving to be a strong competition.

To help overcome digital transformation challenges, your company’s approach requires: 

• The implementation of infrastructure based on the Cloud, AI (artificial intelligence) or data. Without dedicated infrastructure, it will be difficult to succeed in your digitalisation. This requires a specific budget for investments in technology. The benefits by far exceed the costs and are proven to bring a considerable return on investment.
• Information management and security: as your company moves forward with its digital transformation, the centralisation of data is key. This will guarantee a scalable digital foundation while ensuring safe information management and robust data security.

Therefore, as we have seen, digital transformation has many benefits, but it is not without challenges. Strong leadership, with the ability to lead and convert teams to digital, is crucial for any business transformation. In addition to this, you will also need to adopt best practices such as: 

• implementing a clear digital transformation strategy 
• having precise goals and objectives 
• transforming your company culture 
• defining new, agile ways of working

These are all part of the challenges of digital transformation. If tacked well, you might just shape your company into the next successful digital transformation case study.

¹ 'Why do companies struggle with digital transformation', Celerity, January, 2020.

² 'Why digital transformations fail: closing the $900 billion hole in enterprise strategy', Forbes, March, 2018.

³ '50 vital digital transformation statistics: 2020 spending, adoption, analysis & data', financesonline.com.

⁴ '5 proven benefits of digital transformation', CNBC, January, 2019.

⁵ 'How you handle digital transformation challenges matters', Forbes, February, 2019.

⁶ 'Unlocking success in digital transformations', McKinsey, October, 2018.

⁷ '6 digital transformation challenges enterprises need to overcome', Reworked, June 2020.

Ioana Bota

About the author

Ioana's journalistic background and experience as a digital marketer fuel her curiosity to know more about digitalisation, meeting management and business agility.