Six Challenges of Digital Transformation

Around 47% of the 388 business leaders surveyed by Gartner said that they had an increased pressure from the Board of Directors to move forward in the digital business. And, as much as it sounds exhausting, the approach pays off quite well. As a companion to our older blog highlighting the questions you must consider before taking the road to DXP, we thought it is essential to also talk about the common barriers or challenges of digital transformation.

Lack of courage to experiment

According to the former CEO and Chairman of Intel, Andrew S. Grove, “A strategic inflection point is a time in the life of a business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights.” And yet, 53% of the senior executives maintain that lack of courage to experiment or business inability in that direction is a major barrier in their journey towards digital transformation. Most businesses find it hard to adapt to the changing landscape, because they’re “secure and comfortable” in technologies that they know, or find the change technically complex and expensive.

Legacy Systems

Old practices cannot function in the new digital space. Digital evolution process will always be hindered by slow and hierarchical processes. According to the Harvard Business Review and Scout RFP, 52% of the executives feel that a predefined notion and legacy systems are a major blocker to their road towards digitization.

Siloed Systems

Some 51% of the surveyed executives think that siloes are among the biggest barriers. Working in segregation and competing amongst teams or departments within an organization leads to a mayhem that blocks digital transformation of an enterprise. Jabil, in its survey of the manufacturing industry found that just 23% of them have a cohesive digital strategy across the organization. A company-wide transformation is required to break the siloed system because digital transformation is not department-specific.

Lack of change management capabilities

About 46% senior executives believe this to be the major blocker of digital transformation. The message for strategy change must be communicated commonly across the entire organization, because the digital transformation doesn’t belong to a single team. The change must be managed, and should be gradual with a layer of confidence and security amongst the organization. The reasons and benefits for change must flow down from the C-suite, while also addressing the employees’ reservation, fears and insecurity. Digital transformation requires a change in traditional approach, and when the question sticks to machine learning or AI, employees feel the job risks. Therefore, the change management must be gradual, confident, and must involve all stakeholders by addressing their concerns in open forum Q&As.

Inability to find digitization expert

Digital transformation requires a co-ordination of technology and talent. It is essential that if the present technology an enterprise is using is stale, there must be a relevant restructuring. Workforce digital literacy and early investments in the right talent can help enterprises in making the first cut. If a business lacks internal digitalization experts, they must be willing to look beyond the internal pool. Finding digital journey partners or tech vendors with a digitization expertise can help organizations.

Lack of resources/ budgetary concerns

Insufficient budget is cited as a major factor by leaders (37%) in their digitization journey. According to one IDC report, the investment on digital transformation projects reached $1.7 trillion by the end of 2019, when compared with 2017. That’s the data of the time when the COVID-19 pandemic had still not made its way to the world. Most companies are still in the digital impasse stage, which is still the early stage of digital maturity. The hard fact is that digitization is an expensive process, and the organizations must be willing to invest the resources. Sometimes lack of sufficient resources is a genuine reason. However, senior management’s unwillingness to re-invest the company’s budget into the initiatives of digitalization is another key reason.

Remaining conservative in the process of digital transformation doesn’t allow enterprises to reap full benefits of digitalization. Businesses must have the vision to adapt to the change and invest in innovation that can ensure survival and thriving in the new age of creating digital experience.