Biggest Challenges Companies Face in Implementing Digital Transformation
Companies that have undergone digital transformation have the advantage of enhanced productivity and record a higher rate of customer satisfaction. The process presents companies with chances for re-invention and re-imagination by the use of modernized digital processes and tools.
While the companies may have access to all forms of technological capabilities, the path of digital transformation is not always smooth. Some companies have to deal with multiple complex challenges, but they eventually find a way to overcome them. The benefits received are better by far compared to the biggest digital transformation challenges.
Poor data management strategies
One of the main pillars of digital transformation is data management. Companies rely on data to get deep insights into customer needs and to make critical business decisions. In today’s business field, a lot of data is generated daily. No matter how big the information can be, it cannot be useful to a company if it doesn’t provide insights.
The business person needs to know the changing customer behavior, buying preferences, and the future decisions they are likely to make. This is possible when generated data is stored in a central place where it can be easily accessed. It makes it possible to retrieve and process the information when needed.
Since handling big data is not easy, companies require advanced technology that can allow data to be stored and easily accessed from a centralized place. Integrating a digital integration hub architecture into a business system provides a solution to modernized data management strategies. The DIH architecture is used to decouple digital applications and aggregate operational data, making it available all the time it is needed.
Highly evolving customer needs
The main purpose of every business is to serve customer needs effectively. Unfortunately, these needs keep evolving all the time. Sometimes the time taken by customers to evolve from one need to the next is too short. A company might be in the middle of its digital transformation aimed to meet specific customer needs.
If the needs suddenly change, the company is left with limited options to either abandon the process or upgrade. Due to this, many business people must consider adopting digital transformation initiatives built on strong customer engagement systems. These are resilient systems that consistently meet customer needs no matter how fast the needs evolve.
Many things affect customer buying behavior. They can range from personal factors such as age, lifestyle, and economic stability. They progress further to psychological factors such as attitude, motivation, belief, and perception. Social factors such as customer status in society, family, and roles make significant contributions to buying behavior. Some business people may prefer to delay their digital transformation processes to study how the market will likely behave in the future.
Shortage of skilled workers
The main aim of digital transformation is to create a new business environment through modern technologies. By leveraging technology, a company enhances productivity, effectiveness, and efficiency. Artificial intelligence plays a significant role in the processes of digital transformation. It is the key technology behind other technologies such as NLP, deep learning, and predictive analytics.
Many companies that started over two decades ago have to deal with a talent challenge. Most of their workers were employed when technological changes were not moving at high speeds like it is today. They are knowledgeable in business operations but not in modern AI technologies that are critical in a digitally transformed business environment.
The solutions such companies adopt are to either reskill/upskill their workers, hire new talent, or outsource skills. Even if they succeed in outsourcing, the current workers need to be trained in using the new technologies. The entire process increases budget allocations which can affect profits.
Dealing with organizational culture
A company’s digital transformation process is multifaceted. It involves not only an upgrade of technologies and tools but also changing the business culture. Employees at all levels must be ready to adapt to changes without resisting them. Resistance is likely to happen in companies where implementers of change do not create seamless communication strategies across the entire company.
Due to this, employees fail to understand the benefits they will get from a transformed business environment. They begin to resist change based on misconceived ideas that can affect the expected digitalization outcomes. Correct communication should be started at the inception phase and continually communicated until the implementation phase is complete. The implementers need to communicate a new business culture.
They should enlighten workers on the new tools, technologies, and solutions they are expected to bring into the business. This will help workers to embrace the transformed way of working, which makes it easy for them to adapt and have a new mindset. The entire process benefits both the workers and customers, and every worker should form part of the process.
Handling online security challenges
A digitally transformed company does most of its transactions online. It creates applications that make it easy for customers to interact with the company’s products remotely. The applications directly connect with the company’s frontend and backend. Requests from the front end must pass through the public space to get to the backend and vice versa. This is the point where most data breaches occur.
To solve this problem, companies require another technology, such as headless architecture, that separates the front-end from the backend through an API. The company can also adopt a distributed architecture such as Hadoop, Spark, in-memory computing solutions, and DIH architecture. During a company’s digital transformation phase, one of the solutions that require attention is online security.
The company needs to rise beyond the common solutions such as VPNs, passwords, and antivirus installations. The business requires modern solutions that are dependable, agile, and resilient. Adopting modern online security transformations will help the company achieve a smooth digital transformation process. If necessary, the company should hire a consultant to lead the process.
Every business goes through different challenges in its digital transformation processes. Some lack skills, while others experience resistance from workers. Each challenge has unique solutions that ensure a smooth transformation process. The company should ensure it prepares adequately for the process. The key people to involve are the workers by creating a strong change leadership team.